Maharashtra govt’s stamp duty on ad contracts: Supreme Court stays Bombay HC ruling

Court asks IBF to keep accounts of revenue earned via ads.

By: Express News Service | New Delhi | Published: March 28, 2017 1:11 am
ad contracts, ad contracts duty, maharashtra government, supreme court, bombay high court, indian express news, business news The Supreme Court. (File Photo)

The Supreme Court on Monday stayed a Bombay High Court judgment, which had upheld a legal provision empowering the Maharashtra government to impose stamp duty on contracts entered into by advertising agencies with their clients and with media companies.

“We are of the considered opinion that the matter requires to be debated, especially keeping in view the sanctity of the freedom of speech and expression and the involvement of electronic and print media and, therefore, we direct that there shall be stay of the operation of the judgment of the High Court,” said a bench led by Justice Dipak Misra.

Admitting an appeal by the Indian Broadcasting Foundation, the court asked the group to keep accounts of revenue earned through advertisements and share details of revenue as well as contracts with the state government.

The High Court had affirmed the constitutionality of the amendment to the Maharashtra Stamp Act which levied stamp duty on the execution of the document pertaining to advertisements.

Senior advocate Arvind P Datar, appearing for Indian Broadcasting Foundation, submitted that the State Legislature cannot impose tax on anything shown on electronic and print media, that is to say, on the television, radio and newspaper. He added that that the expression “through an electronic and print media” has to be given appropriate and adequate emphasis so that the freedom of speech and expression is sustained in a democratic body polity and no attempt should be made to scuttle their progress and smother their effective sustenance.

On the other hand, senior lawyer K K venugopal, representing Maharashtra government, a State Legislature can legislate touching the aspects of stamp duty for the purpose of revenue generation and it cannot be called a colorable exercise of power. He pointed out that duty is to be paid by the advertising agency or persons and, thereby, neither the electronic media nor the print media is affected.

The bench, however, deemed it appropriate to stay the operation of the HC judgment and fixed the matter for hearing in September.

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  1. G
    Gopal
    Mar 28, 2017 at 12:48 pm
    notice how our legal system is manited. a law ped by legislature is sta and then hearings are scheduled 6 months later. during this period, the judges will go off on vacations, many to cooler European locations. In the western countries that these judges will spend their summer, this behavior would never be tolerated, nor would stays be granted in such cases.
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    1. R
      raj
      Mar 29, 2017 at 12:03 pm
      Casting aspersions on the integrity of the courts. You may be held liable for contempt proceedings. If law ped by legislature is malafide in nature, it can be declared as ultra vires by a competent court.
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