No KVAT Levy On Advertisement Hoardings Where Right To Use Has Not Been Transferred: Kerala High Court

Justice Ziyad Rahman A.A. agreed with the assessee that the charges collected by the assessee for displaying the advertisement included the charges for erection, printing and maintenance, etc. Thus, the responsibility to maintain the hoarding was with respect to the assessee, and the assessee had collected separate charges for the same as well.

In this case, the assessee/petitioner is engaged in erecting hoardings on properties and buildings owned by third parties, on the basis of agreements and such hoardings are fixed either on a property or on top of a building.

After erecting the hoardings on the structure created for the said purpose, the advertisement of his consumers would be displayed on the said hoardings for a particular period, on the terms and conditions agreed between the parties.

The aforesaid transactions were subjected to assessment under Section 25 of the KVAT Act by the Assistant Commissioner, and the assessment order was passed.

As per the assessee in view of the peculiar nature of the transactions involved in the display of hoardings, it cannot be held that a taxable event under the provisions of the KVAT has occurred.

According to the assessee, there was no transfer of right to use the hoardings, while displaying such advertisements, in favour of the third parties, as the assessee is only displaying the content provided by his customers, whereas the entire control and possession over the hoardings vested with the assessee.

The bench observed that the obligations of the assessee include the erection and maintenance of the hoardings.

The bench stated that as per the terms and conditions agreed between the petitioner and his customers, the display was provided by the petitioner on the hoardings erected at the expense of the petitioner, to which the content alone would be supplied by the customer.

The bench held that no taxable event under the provisions of the KVAT Act had occurred in respect of the transactions referred to in the assessment order, as there was no transfer of right to use the hoardings.

In view of the above, the bench allowed the petition and quashed the assessment orders.

Case Title: J. Vijayakumar v. Assistant Commissioner

Case Number: WP(C) NO. 4274 OF 2023

Citation: 2025 LiveLaw (Ker) 484

Counsel for Petitioner/Assessee: Meera V. Menon, R. Sreejith and K. Krishna

Counsel for Respondent/Department: Arun Ajay Sankar

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