Eden Gardens Not A 'Public Street', Imposing Ad Tax Without Regulations Violates Rule Of Law: Calcutta High Court Quashes Demand Notice

The Calcutta High Court has ruled that a municipal corporation cannot levy a tax on advertisements without first framing the appropriate regulations that authorize and govern such a levy. The court held that while a municipality may have the general power under the law to impose taxes, this power must be exercised through specific and well-defined rules or by-laws. These regulations must clearly lay down the scope of the tax, the rate, the method of assessment, and the procedure for collection. In the absence of such a regulatory framework, any attempt to collect an advertisement tax is arbitrary and lacks the necessary legal authority. This judgment upholds the principle that there can be no taxation without a clear and specific law, providing relief to businesses and individuals from ad-hoc tax demands by local bodies.