Calcutta HC Quashes ₹51 Lakh Ad Tax on Eden Gardens | Stadium Not a Public Street, Tax Without Regulation Violates Rule of Law
Safiya Malik
The High Court of Calcutta Division Bench of Justice Arijit Banerjee and Justice Kausik Chanda, by judgment dated June 19, 2025, affirmed the quashing of a demand notice issued by the Kolkata Municipal Corporation (KMC) demanding advertisement tax from the Cricket Association of Bengal (CAB). The court held that the interior of Eden Gardens Stadium does not qualify as a "public place" under the applicable legal framework and found the demand unsustainable. The court dismissed the appeal filed by the municipal authority and concluded that no further legal action against the CAB was warranted in this regard. The demand was found to have violated statutory requirements and fundamental principles of natural justice. No costs were awarded to either party, and the court ordered the supply of certified copies of the judgment upon compliance with required formalities.
The Cricket Association of Bengal (CAB), which holds a lease over the Eden Gardens Stadium in Kolkata from the Ministry of Defence, Government of India, became subject to a demand notice from the Kolkata Municipal Corporation (KMC) dated March 27, 1996. This notice claimed a sum of Rs. 51,18,450/- as advertisement tax under Section 204(1) of the Calcutta Municipal Corporation Act, 1980, pertaining to advertisements displayed during the inaugural ceremony and semifinal match of the Wills World Cup on February 11, 1996, and March 13, 1996, respectively.
CAB challenged the demand through a writ petition, primarily on three grounds. First, it argued that the advertisements were displayed within the confines of Eden Gardens Stadium, which was not a "public place" as per the statute. Secondly, CAB contended that the demand notice was arbitrary, lacked transparency, and violated principles of natural justice. Thirdly, invoking Article 285 of the Constitution, CAB argued that the land was owned by the Union of India, rendering it immune from municipal taxation.
KMC justified the demand by stating that the stadium becomes accessible to the public upon purchase of tickets, thereby qualifying as a "restricted public place." KMC also asserted that the advertisements were visible to people inside the stadium and, through telecast, to the broader public. It relied on precedent cases such as Brihanmumbai Mahanagarpalika & Anr. v. Willingdon Sports Club & Ors., and KMC v. Calcutta Ladies Golf Club & Ors., to support its position.
In response, CAB stated that the notice lacked detailed computation or supporting rationale and that they were not afforded any hearing before issuance. They stated that the stadium's access was conditional, and therefore it could not be deemed a public place. CAB also stated that no Regulation or budgetary resolution under Section 204 had been shown to support the tax imposition.
The learned Single Judge cited in favour of CAB, quashing the demand notice. KMC appealed the decision before the Division Bench.
The Division Bench analysed the content and process of the demand notice and the legal character of the Eden Gardens premises.
Regarding the demand notice, the court observed: "Simply an amount has been quoted. We do not see how one can meaningfully respond to such a notice of demand." The court noted that no break-up or justification for the Rs. 51,18,450/- amount had been provided, and CAB’s representation was ignored by KMC.
On the limited timeframe for objections, the court recorded: "The two-day period granted for raising an objection was wholly unreasonable and inadequate... There was no grave urgency." It concluded that CAB was not granted an opportunity to be heard and held: "The demand notice is violative of the principles of natural justice."
Discussing procedural fairness, the court cited English and Indian legal precedents including Cooper v. Wandsworth Board of Works (1863), Board of Education v. Rice (1911), Ridge v. Baldwin (1963), and Mohinder Singh Gill v. Chief Election Commissioner (1978). The court observed: "Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance... where substantial rights of parties are considerably affected."
On the matter of regulation, the court found: "KMC has not been able to produce any Regulation... nor has KMC been able to indicate that the budget estimate for the relevant year prescribes the rate." The court stated: "When a statute empowers an authority to do a certain act and indicates the manner in which it must be done, then it must be done in that manner or not at all."
With regard to the character of Eden Gardens, the court found that Section 204 of the Act did not define "public place." Referring to Black's Law Dictionary and legal precedent, it held: "As soon as conditions are imposed on members of the public for having access to a place, that place ceases to be a public place." It added: "The members of the public do not have absolute or unrestricted right of access to Eden Gardens... Just because Eden Gardens Stadium can accommodate a huge number of people, maybe close to a lakh, that would not per se make the Stadium a public place."
The court also held that in the absence of a contractual agreement placing tax liability on CAB, "the liability, if at all, would rest with the advertisers." It referred to Kolkata Municipal Corporation v. Vodafone Idea Ltd. in support of this position and distinguished the cases relied upon by KMC.
Finally, the court stated: "We do not deem it necessary to consider or decide the other points agitated by the parties including whether or not KMC is entitled to levy advertisement tax on hoardings put up on land and structures owned by the Union of India."
The High Court concluded that the appeal filed by KMC and associated applications lacked merit and did not warrant interference with the earlier decision.
The court stated: "We find no reason to interfere with the impugned judgment and order passed by the learned Single Judge." Accordingly, it recorded: " The appeal and the connection application are, accordingly, dismissed."
"There shall be no order as to costs."
Advocates Representing the Parties:
For the Petitioners: Mr. Joydeep Kar, Senior Advocate; Mr. Samrat Sen, Senior Advocate; Mr. Kaushik Mandal, Advocate
For the Respondents: Mr. Alak Kr. Ghosh, Advocate; Mr. Swapan Kr. Debnath, Advocate; Ms. Sima Chakraborty, Advocate; Ms. Susmita Saha Dutta, Advocate
Case Title: The Calcutta Municipal Corporation & Ors. v. The Cricket Association of Bengal & Ors.
Case Number: APO/248/2016 with WPO/2662/1996 and IA No: GA/2/2021
Bench: Justice Arijit Banerjee and Justice Kausik Chanda
