The Supreme Court of India, today stayed the Bombay High Court decision dismissing the challenge against levy of stamp duty on contracts entered into by advertising agencies with their clients and with media companies.
The bench comprising of Justices Dipak Misra and A.M Khanwilkar was hearing a special leave appeal against the High Court order filed by the Indian Broadcasting Foundation.
Before the Court, the petitioners submitted that the state legislature could not impose tax on anything shown on electronic and print media and if huge revenue is taken away from the members of the Broadcasting Foundation, who are embedded to the cause of freedom of speech and expression that percolates the ethos pertaining to individual and collective expression, it inevitably hampers the freedom of speech and expression. That is not constitutionally permissible,” he told the court.
On behalf of the State, it was submitted that levy of stamp duty is contained in both the State List and the concurrent list and the levy had nothing to do with the concepts of freedom of speech and expression. He also contended a state legislature can legislate touching upon the aspects of stamp duty for the purpose of revenue generation and it cannot be called a colorable exercise of power. It was also contended 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 headed by Justice Dipak Misra observed that “The matter requires to be debated, especially keeping in view the sacrosanctity of the freedom of speech and expression and the involvement of electronic and print media.”
Staying the High Court order, the bench laid down two conditions. Firstly, Member of the foundation keeps accounts with itself and giving at least samples of 10 agreements to the state. Secondly, each member of the foundation shall give a summary of the revenue earned through the advertisement.
The case was further posted to April 13th, 2017 for final disposal.
Read the full text of the order below.
