Is there any way to create PDF dynamically against receiving texts and images?
You can use the iText library.
If you're generating reports then JasperReports can generate PDF output.
There's a ton of ways to generate PDFs on the fly.
In Java, you can use the iText library. If you wanted to use Jython, you could use reStructuredText and possibly rst2pdf. Or you could just generate LaTeX files on the fly and make a system call to LaTeX.
There are several libraries for working with PDF in Java, for example iText and Apache PDFBox.
iText and JasperReports are great to create pdf reports via Java.
With iReport you can easily create the jasper files needed for this. Very easy to use tool and helped me a lot when I needed to create some pdf reports.
I work with Apache FOP and it works amazingly well. It's well supported and it's based on the XSL-FO standard.
If you're doing reports based on for example SQL queries then iReport is a good choice although it's sometimes a bit heavyweight. On the other hand if you're going to produce something that's more about presentation and design, like a product sheet or a brochure then my experience is that it's alot easier to first generate html and css and then use it to generate a PDF.
A bit late but maybe useful to other searchers. Docmosis can populate templates and produce documents on the fly. Assuming you mean you need to include images and text, Docmosis can populate these on the fly from Java objects, text/image files, database queries etc. Java and Openoffice are required server-side.