Delhi H.C : The petitioner, Delite Cinema, has sought a writ in the nature of certiorari for quashing Resolution No. 92 dt. 22nd May, 1972, passed by the Municipal Corporation of Delhi for recovering the arrears of advertisement tax due from the petitioner for the years 1968-69, 1969-70 and 1970-71.

P. K. BAHRI, J.:

The petitioner, Delite Cinema, has sought a writ in the nature of certiorari for quashing Resolution No. 92 dt. 22nd May, 1972, passed by the Municipal Corporation of Delhi for recovering the arrears of advertisement tax due from the petitioner for the years 1968-69, 1969-70 and 1970-71. By virtue of the impugned resolution, a demand for a sum of Rs. 1,36,883,55 has been raised.

The averment of the petitioner is that earlier the advertisement tax was being charged on the basis of focus area of the screen of the petitioner’s cinema and the petitioner had been paying advance advertisement tax for the relevant years and the Municipal Corporation of Delhi has been accepting the same. It was further averred that even s. 142 of the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as “the Act”), does not contemplate calculation of advertisement tax on the basis of slide or shot projected on the screen but the tax has to be paid on the basis of focus area of the screen. It was further alleged in the writ petition that the Municipal Corporation of Delhi was not having any power to realise any arrears of advertisement tax under any provision of law and once the advance tax has been accepted finally for a particular year, there could be no question of the Municipal Corporation reopening the issue and calculating the advertisement tax on the basis of each slide and shot projected on the screen for the relevant year. It was also urged in the writ petition that the Municipal Corporation had no power to issue any notice under s. 175 of the Act seeking any information from the petitioner regarding the various shots and slides displayed on the screen for the relevant years. It was also urged in the petition that by virtue of ss. 143 to 146, the Municipal Corporation could only stop the display of advertisements on the screen if those advertisements were in violation of any provision of the Act and there is no provision in the Act enabling the Corporation to create a liability to advertisement tax retrospectively. It was further mentioned in the writ petition that the petitioner had entered into an agreement with M/s Blaze Advertising (P) Ltd. for the advertisements to be displayed on the screen of the petitioner-cinema and the petitioner cannot now legally recover any additional charges from M/s Blaze Advertising (P) Ltd., on the basis of the demand now created by the Municipal Corporation retrospectively. In other words, the plea of the petitioner is that the Municipal Corporation is estopped from raising such a demand retrospectively inasmuch as earlier the Municipal Corporation had accepted the advance advertisement tax in respect of the relevant years and had granted necessary permission for displaying the advertisements on the screen of the petitioner-cinema and on such representation of the Municipal Corporation, the petitioner changed its position adversely by entering into an agreement with M/s

Blaze Advertising (P) Ltd. on the rates which were thought fit by the petitioner at that time and the Municipal Corporation now by raising additional demand had put the petitioner in a position of financial disadvantage.

In the counter filed by the Municipal Corporation, it has been averred that the liability to payment of advertisement tax is statutory as mentioned in s. 142 r/w Schedule V of the Act and any person displaying any advertisement is liable to pay the tax in accordance with the rates fixed and any miscalculations of the advertisement tax by the petitioner or by some officials of the Municipal Corporation would not wipe out the statutory liability to pay the tax. It has been mentioned in the counter that the liability has been rightly raised against the petitioner as the petitioner had displayed advertisements in the cinema and each and every advertisement is liable to tax and it is not the focus area of the screen which is to be taxed. Sec. 142 of the Act reads as follows: “142. (1) Every person, who erects, exhibits, fixes or retains upon or over any land, building, wall, hoarding, frame, post or structure or upon or in any vehicle any advertisement or, who displays any advertisement to public view in any manner whatsoever, visible from a public street or public place (including any advertisement exhibited by means of cinematograph), shall pay for every advertisement which is so erected, exhibited, fixed or retained or so displayed to public view, a tax calculated at such rates not exceeding those specified in the Fifth Schedule as the Corporation may determine: Provided that no tax shall be levied under this section on any advertisement which— (a) relates to a public meeting, or to an election to Parliament or the Corporation or to candidature in respect of such election ; or (b) is exhibited within the window of any building if the advertisement relates to the trade, profession or business carried on in that building; or (c) relates to the trade, profession or business carried on within the land or building upon or over which such advertisement is exhibited or to any sale or letting of such land or building or any effects therein or to any sale, entertainment or meeting to be held on or upon or in the same; or (d) relates to the name of the land or building upon or over which the advertisement is exhibited, or to the name of the owner or occupier of such land or building ; or (e) relates to the business of a railway administration and is exhibited within any railway station or upon any wall or other property of a railway administration ; or (f) relates to any activity of the Central Government or the Corporation. (2) The tax on any advertisement leviable under this section shall be payable in advance in such number of instalments and in such manner as may be determined by ‘bye-laws’ made in this behalf. Explanation 1.-The word ‘structure’ in this section includes any movable board on wheels used as an advertisement or an advertisement medium. Explanation 2.-The word ‘advertisement’ in relation to a tax on advertisement under this Act means any word, letter, model, sign, placard, notice, device or representation, whether illuminated or not, in the nature of any employed wholly or in part for the purposes of advertisement, announcement or direction.”

The Fifth Schedule attached to the Act at serial No. 7 refers to the rates for determining the advertisement tax with regard to the cinematograph advertisements to be displayed on the screen. A bare reading of the statutory provision makes it clear that it is the very advertisement which is liable to tax. The tax is calculated, of course, on the basis of the size of the board or screen where the advertisement is displayed. It is not the board or the screen which is liable to tax by itself. Only the advertisement displayed on such board or the screen is liable to payment of tax. This is evident from a bare reading of the statutory provision. It is really not understandable how the petitioner has been paying the advance tax only on the basis of focus area of the screen and not on the basis of every advertisement displayed on such focus area of the screen. In a Full Bench decision of this Court inMunicipal Corporation of Delhi vs. Palace Cinema, ILR (1972) 1 Delhi 163, these very provisions of the Act came up for consideration. In the cited case, the Palace Cinema was served with a notice for payment of arrears of advertisement tax but the challenge was made by the Palace Cinema that no such arrears of advertisement tax are recoverable under the provisions of the statute. This contention of the Palace Cinema was negatived. In the cited case, the Palace Cinema had not even complied with the provisions of the bye-laws 6 and 7. Bye-laws 6 and 7 read as follows: “6(1). Every person desiring to erect, exhibit, fix, retain or display an advertisement shall send or cause to be sent to the CIT, not less than ten clear days before advertisement is to be displayed and in time before printing copies of advertisements or painting advertisements or exhibiting them in any manner, a notice in duplicate in writing in such form as may be determined by the CIT with all the particulars required therein together with a copy of the matter to be advertised : Provided that the CIT may for reasons to be recorded in writing, reduce the time limit in special cases. (2) The CIT shall, within seven days from the date of receipt of the notice, intimate to the applicant the tax due on the intended advertisement provided the CIT approves of the advertisement. The CIT may disapprove of an advertisement, among others, on the ground that its contents or the manner of its display is indecent or otherwise offensive to good taste or public sentiment.

7. The tax on advertisements shall be payable in advance after the CIT has approved of the proposed advertisement.” It was held in this judgment that the liability to pay the advertisement tax is created by s. 142 of the Act which also quantifies the liability by saving that the advertisement tax is to be calculated at such rates not exceeding those specified in the Fifth Schedule as the Corporation may determine. It was observed that s. 142, therefore, not only imposes the liability but also quantifies it when r/w the Fifth Schedule and if such liability is not discharged by payment of the advertisement tax which has become payable, the 9/30/99Corporation is entitled to employ coercive processes provided by ss. 154 to 162 of the Act for recovering the arrears of advertisement tax. The recovery of such tax was held to be not barred by the period of limitation as it was held that the residuary article of limitation would cover such demand. In the unamended Indian Limitation Act, the residuary article provided for six years’ period of limitation while in the amended Limitation Act, 1963, the period provided is three years. So, the Municipal Corporation in the present case has raised the demand in respect of the previous three years and so the claim of the Municipal Corporation of Delhi is otherwise not barred by limitation.

Counsel for the petitioner has vehemently argued that as in the Fifth Schedule, the advertisement tax is to be calculated on the basis of the space on which the advertisement is displayed, so the tax is payable only on the space used and not on the basis of advertisements displayed on that space. The argument on the face of it is fallacious. Sec. 142 in unambiguous terms lays down that the tax has to be (levied) on each and every advertisement. The advertisement would not mean only the space on which it is depicted. The words and the figures used on a particular space would constitute advertisement. The approval of the CIT is required in respect of the advertisement meaning thereby that the contents of the advertisement must be brought to the notice of the CIT before the CIT could grant its approval. It is obvious that if an advertisement does not come up to the moral standards or is obscene, the CIT would not grant any permission for display of any such advertisement. So, it is not the board or the screen which is to be taxed. It is the advertisement which is to be projected on such screen or displayed on such board that is liable to be taxed. It is only for computing the tax that the size of the board or the screen comes into play. If on a particular board, one after another, advertisement are displayed, it is evident that such advertisement would be liable to payment of tax. Counsel for the petitioner has referred to CST vs. Jaswant Singh Charan Singh (1967) 19 STC 469 (SC), wherein it has been observed that while interpreting items in statutes like the ST Act, resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense. I do not understand how this particular ratio is of any help in interpreting s. 142 of the Act which in its plain meaning makes it clear as to what is liable to tax is every advertisement and nothing more and nothing less. He has also cited CIT vs. National Taj Traders (1980) 121 ITR 535 (SC), in which it has been laid down that the principle that a fiscal statute should be construed strictly is applicable only to taxing provisions such as a charging provision or a provision imposing penalty and not to those parts of the statute which contain machinery provisions. There is no doubt about the legal principle that taxation laws have to be interpreted strictly and if two interpretations are possible in respect of a particular tax provision imposing tax, then the interpretation which is more beneficial to the citizen has to be accepted. But in the present case, the provisions of s. 142 are not capable of two interpretations. Even if the language is liberally construed, it becomes clear that each and every advertisement has been made liable for payment of advertisement tax. So these judgments do not help the case of the petitioner in any manner.

Counsel for the petitioner also made reference to CIT of Police vs. Gordhandas Bhanji, AIR 1952 SC 16, in which it was observed that the public authorities cannot play fast and loose with the powers vested in them, and persons to whose detriment orders are made are entitled to know with exactness and precision what they are expected to do or forbear from doing and exactly what authority is making the order. It is not possible to countenance the submission of learned counsel for the petitioner that it is on account of any representation of the Municipal Corporation of Delhi that the tax has been charged wrongly. After all, the bye-laws imposed a duty on the petitioner to disclose to the Municipal Corporation as to what advertisements the petitioner was to display and then calculate the tax on that basis and then the advance tax was to be accepted by the Municipal Corporation. It is not the case of the petitioner that the petitioner had disclosed in its application for payment of advance tax that the petitioner was to display such number of slides and shots in the particular year. So, it cannot be held that the public authorities had created any confusion in the mind of the petitioner regarding the payment of advertisement tax. The mere fact that the officials of the Municipal Corporation failed to discharge their proper duties in realising the proper advertisement tax does not mean that any wrong representation has been made by the Municipal Corporation regarding the tax to be recovered from the petitioner. So, examined from any angle, it is clear that it is the liability of the petitioner to pay advertisement tax on the basis of each and every advertisement projected on the screen by the petitioner. It is only when the particular slide or the shot is focussed on the screen that the particular area on the screen on which such advertisement is focussed becomes an advertisement but the moment the slide or the shot is changed and a new slide or shot is projected, the same also becomes a separate advertisement. Hence, for each such slide and shot projected on the screen, the advertisement tax has to be calculated and paid.Lastly, learned counsel for the petitioner has vehemently contended that the principle of promissory estoppel applies to the facts of the present case and the Municipal Corporation is estopped from raising this demand retrospectively. He has cited Union of India vs. Godfrey Philips India Ltd. (1986) 158 ITR 574 (SC) I reproduce the material law laid down by the Supreme Court on this doctrine of promissory estoppel (at p. 586 of 158 ITR): “The doctrine of promissory estoppel is well established in the administrative law of India. It represents a principle evolved by equity to avoid injustice and though commonly named promissory estoppel, it is neither in the realm of contract nor in the realm of estoppel. The basis of this doctrine is the interposition of equity which has always, true to its form, stepped in to mitigate the rigour of strict law. This doctrine, though of ancient vintage, was rescued from obscurity by the decision of Mr. Justice Denning, as he then was, in his celebrated judgment in Central London Property Trust Ltd. vs. High Trees House Ltd. (1956) 1 All ER 256 (KB). The true principle of promissory estoppel is that where one party has by his word or conduct made to the other a clear and unequivocal promise or representation which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party, to whom the promise or representation is made and it is in fact so acted upon by the other party, the promise or representation would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings which have taken place between the parties. It has often been said in England that the doctrine of promissory estoppel cannot itself be the basis of an action: it can only be a shield and not a sword: but the law in India has gone far ahead of the narrow position adopted in England and as a result of the decision of this Court in Motilal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh (supra), it is now well settled that the doctrine of promissory estoppel is not limited in its application only to defence but it can also found a cause of action. The decision of this Court Motilal Padampat Sugar Mills’ case (1979)118 ITR 326 (SC), contains an exhaustive discussion of the doctrine of promissory estoppel and we find ourselves wholly in agreement with the various parameters of this doctrine outlined in that decision. The doctrine of promissory estoppel is also applicable against the Government and it cannot be defeated by invoking the defence of executive necessity because if a party who has, acting in reliance on a promise or representation made by the Government, altered his position, is entitled to enforce the promise or the representation against the Government, even though the promise or representation is not in the form of a formal contract as required by Art. 299 and that article does not militate against the applicability of the doctrine of promissory estoppel against the Government. The doctrine of promissory estoppel is also applicable against public authorities because there is no distinction between a private individual and a public body so far as the doctrine of promissory estoppel is concerned. The Supreme Court’s judgment in Jit Ram’s case (supra), where it was held that the doctrine of promissory estoppel is not available against the exercise of executive functions of the State and the State cannot be prevented from exercising its functions under the law, is not a correct law to that extent. However, there can be no promissory estoppel against the legislature in the exercise of its legislative functions nor can the Government or public authority be debarred by promissory estoppel from enforcing a statutory prohibition. It is equally true that promissory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. The doctrine of promissory estoppel being an equitable doctrine, it must yield when the equity so requires, if it can be shown by the Government or public authority that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation is made.”

In the cited case, the Central Board of Excise and Customs which was an authorised body had issued certain clarifications with regard to exclusion of the cost of corrugated fibre board containers from the value of cigarettes and the assessee had acted on such representation and had altered its position and the Supreme Court held that the principle of promissory estoppel applies. It is clearly laid down in this very judgment that promissory estoppel cannot be used to compel the Government or a public authority to carry out any representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority. In the present case, the officials of the Municipal Corporation were not competent to make any representation in violation of the provisions of s. 142 of the Act. Even if any such representation had been made with regard to the interpretation of s. 142 by the officials of the Corporation in accepting the advance advertisement tax calculated on the basis of focus area only, the same would not work as promissory estoppel because such interpretation is definitely against the law and beyond the authority of the said officials. Hence, the principle of promissory estoppel is, not applicable to the facts of the present case.

Counsel for the petitioner has also cited Century Spinning & Manufacturing Co. Ltd. vs. Ulhasnagar Municipal Council, AIR 1971 SC 1021. It was observed in this judgment that public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position, to their prejudice. The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promise; when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by the statute, the obligation may be enforced against it in appropriate cases in equity. It was not a case where any representation has been made against any statutory provision. It is only a case where a legal contract was not executed but certain representations were made which were acted upon by the party concerned and it was held that in equity such obligations incurred by the officials can be enforced against the municipality concerned. Recently again, the Hon’ble Supreme Court in Delhi Cloth & General Mills Ltd. vs. Union of India, (1987) 4 SC 35 ; AIR 1987 SC 2414, has reiterated the law in the following words (p. 2420 of AIR): “It is, however, quite fundamental that the doctrine of promissory estoppel cannot be used to compel the public bodies or the Government to carry out the representation or promise which is contrary to law or which is outside their authority or power.”

In the present case, the officials of the Municipal Corporation were not competent in law to give any interpretation to the provisions of the statute. If any such wrong interpretation has been given by such officials, that does not work as promissory estoppel against the right of the Municipal Corporation to recover the arrears of tax due from the petitioner.

In view of the aforesaid discussion, I conclude that there is no merit in this writ petition which I hereby dismiss and the stay already granted against recovery of tax is hereby vacated. In view of the legal question involved, I leave the parties to bear their own costs.

[Citation : 172 ITR 208]