Stamp duty on media advertisements: SC stays Bombay HC order

Bombay HC had earlier rejected plea by ad industry challenging stamp duty levy by Maharashtra govt

The Supreme Court implemented a stay on a Bombay High Court verdict that allowed the levy of stamp duty by the Maharashtra government on advertisements in print and electronic media, calling it a debatable issue. The apex court also directed that each of the members of the petitioner, Indian Broadcasting Foundation (IBF), shall give a summary of revenue earned through advertisement. 

The bench that included Justices Dipak Misra and A M Khanwilkar said, "We are of the considered opinion that the matter requires to be debated, especially keeping in view the sacrosanctity of freedom of speech and expression, and involvement of electronic and print media... Therefore, we direct that there shall be a stay of the operation of the judgement of the high court, subject to the member of the petitioner-foundation keeping accounts with itself and giving at least samples of ten agreements to the respondent state so that eventually at the time of final adjudication appropriate relief can be moulded." 

The order came as a result of IBF's plea against the high court's order dated October 27, 2016, which had upheld levy of stamp duty by the state government on advertising-related contracts. The high court had rejected the writ petition filed by the advertising fraternity challenging the decision by the Maharashtra government to levy stamp duty. 

Senior advocate Arvind Dattar, appearing for the IBF, submitted, "The state legislature cannot impose the tax on anything shown on electronic and print media, that is on the television, radio and newspaper." He added, "If a huge revenue is taken away from the members of the foundation, who are embedded to the cause of freedom of speech and expression that percolates the ethos pertaining to individual and collective expression. Inevitably, it will hamper freedom of speech and expression. That is not constitutionally permissible." 

Senior advocate K K Venugopal, appearing for Maharashtra, on the other hand, argued that the subject of levy of stamp duty comes within Lists II and III of the Constitution and the state legislature has the authority to legislate the issue making the judgment rendered by the high court valid.