Supreme Court Rules: Eden Gardens Stadium Is Not a “Public Place” for Advertisement Tax Purposes

The Supreme Court has delivered a significant judgment in a long-running dispute originating from advertisements displayed during the 1996 Wills World Cup. By affirming the 2025 Calcutta High Court order, the Court has clarified the meaning of “public place” under municipal taxation law and set important procedural standards for local authorities.

Background of the Dispute

The controversy dates back to advertisements displayed inside Eden Gardens Stadium during two major World Cup events:

  • Inaugural ceremony on 11 February 1996

  • Semi-final match on 13 March 1996

On 27 March 1996, the Kolkata Municipal Corporation (KMC) issued a tax demand of ₹51,18,450 to the Cricket Association of Bengal (CAB) under Section 204 of the Kolkata Municipal Corporation Act, 1980, alleging that advertisements displayed inside the stadium attracted advertisement tax.

CAB challenged the tax demand before the Calcutta High Court, ultimately resulting in a litigation battle that lasted nearly three decades.

Supreme Court Verdict: Eden Gardens Is Not a “Public Place”

A bench of Justices Vikram Nath and Sandeep Mehta dismissed KMC’s appeal and upheld the Calcutta High Court judgment. The Supreme Court held that Eden Gardens stadium cannot be considered a “public place” under the unamended Section 204 of the KMC Act because:

  • There is no unrestricted public access to the stadium.

  • Entry is granted only to ticket-holding spectators.

  • Controlled, capacity-regulated, ticket-based admission negates the concept of an open public place.

The Court rejected KMC’s argument that the stadium should be treated as a public place merely because the public can enter on purchasing a ticket. It posed a rhetorical question:

“If advertisements are displayed inside a hotel or a house, would that also constitute a public property?”

Statutory Framework: Section 204 of the KMC Act, 1980 (Unamended)

The old Section 204 governed advertisement tax and permitted a levy only if:

  1. The advertisement was displayed,

  2. And was visible from a public street or public place.

In this case, KMC did not dispute that the advertisements were visible only from inside the stadium. Since spectators inside the stadium do not constitute “public” in the statutory sense, the essential condition for imposing tax was missing.

Thus, the stadium interior did not qualify under Section 204 as a taxable location.

Key Legal Principle: Requirement of Visibility from Public Streets or Places

The Calcutta High Court had previously held that:

  • “Public place” requires unrestricted public access.

  • Eden Gardens’ entry system defeats this requirement.

  • Therefore, Section 204 cannot be triggered when the advertisement is visible only from private, access-controlled premises.

The Supreme Court fully affirmed these findings.

Procedural Violations by KMC

The High Court found — and the Supreme Court agreed — that KMC committed multiple procedural improprieties:

  1. No Show-Cause Notice Issued
    CAB was not given an opportunity to be heard, violating principles of natural justice.

  2. No Computation Method or Regulation
    KMC failed to provide any statutory basis or formula for calculating the ₹51-lakh demand.

  3. Simultaneous Criminal Proceedings
    Initiating criminal action while ignoring CAB’s representations amounted to procedural unfairness.

  4. Absence of Regulations Under Section 204
    At the time, no regulations existed prescribing the method of calculating advertisement tax.
    Without statutory regulations, the tax levy became ultra vires.

These findings made the entire demand legally unsustainable.

Constitutional Protection: Article 285(1)

CAB had also argued — and the High Court agreed — that:

  • Eden Gardens is Union Government property.

  • Under Article 285(1) of the Constitution, Union property is exempt from all state and municipal taxes.

Article 285(1) states:

“Property of the Union shall, save insofar as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.”

Since Eden Gardens is owned by the Union of India and leased to CAB, the immunity still applies. Leasehold status does not extinguish constitutional tax immunity.

The Supreme Court did not disturb this finding.

Judicial Precedents and Constitutional Principles Relevant to the Case

Although the Supreme Court did not rely extensively on additional precedents in the final order, the following constitutional and jurisprudential principles are at the core:

1. Article 265 — No Tax Without Authority of Law

A tax cannot be imposed without:

  • Statutory backing,

  • Regulatory mechanism,

  • And procedural fairness.

The absence of regulations under Section 204 strengthened CAB’s challenge.

2. Article 285(1) — Union Property Immune from Local Taxation

The precedent in New Delhi Municipal Council v. State of Punjab (1997) supports the principle that Union property enjoys immunity unless Parliament specifies otherwise.

3. Natural Justice

A fundamental administrative law principle established through cases such as:

  • A.K. Kraipak v. Union of India (1969)

  • Maneka Gandhi v. Union of India (1978)

  • Mohinder Singh Gill v. Chief Election Commissioner (1978)

KMC’s failure to issue a show-cause notice violated the audi alteram partem rule.

4. Interpretation of “Public Place”

Judicial precedents often interpret “public place” based on:

  • Unrestricted public access,

  • Ownership not being determinative,

  • Functional public character.

The Court applied this principle strictly to hold that ticketed premises are not public places.

Why the Supreme Court Rejected KMC’s Request to Keep Issues Open

KMC requested the Supreme Court to leave legal questions open for future adjudication, but the Court refused. The issues were fully adjudicated:

  • No factual dispute existed.

  • No interpretative ambiguity remained under the unamended Section 204.

The Court found no reason to keep matters unresolved.

Conclusion: A Landmark Clarification on Advertisement Tax and Public Place Doctrine

This judgment settles key legal issues:

  1. Eden Gardens is not a “public place” for advertisement tax under the old Section 204.

  2. A municipal body cannot levy tax without statutory authority or regulatory framework.

  3. Union-owned property retains immunity from municipal taxation.

  4. Procedural fairness is mandatory in all tax proceedings.

The ruling strengthens taxpayer rights, reinforces constitutional protections under Articles 265 and 285, and provides clarity on the interpretation of “public place” under municipal laws.


Location: Pune, Maharashtra, India

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