Statutory incentive scheme cannot be cut down by later resolution when investors relied on promised extension and benefits.

A statutory tourism incentive scheme incorporated into a notification could not be curtailed by a later Government Resolution where units had already obtained temporary registration and the scheme promised further time and recourse for extension. The Court held that Clause 10 remained operative for such units and that the later Resolution was ineffective unless the notification itself was amended or rescinded in the manner required by law. It also held that, because the units had altered their position in reliance on the promised incentives and project timetable, the State was bound by promissory estoppel and had to consider extension on the merits under the Scheme.

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Issues: (i) whether Clause 10 of the tourism incentive scheme continued to operate for units already granted temporary registration and whether the subsequent Government Resolution could curtail the time and opportunity already promised; (ii) whether the State was bound by promissory estoppel to consider extension of time and grant the consequential incentives.

Issue (i): whether Clause 10 of the tourism incentive scheme continued to operate for units already granted temporary registration and whether the subsequent Government Resolution could curtail the time and opportunity already promised.

Analysis: The Scheme envisaged staged benefits for eligible tourism units, including provisional registration, extension of time for commencement of operations, and further recourse to the Government for extension. The Court held that these stages were part of the core promise made to units that had already crossed the threshold and obtained TRCs, and therefore did not cease merely because the operative period for fresh applications had expired. The Scheme, having been incorporated into a statutory notification issued under Section 29 of the Gujarat Entertainment Tax Act, 1977, could not be diluted by a later Government Resolution unless the notification itself was amended, varied or rescinded in the manner required by law.

Conclusion: The curtailment of the period and opportunity available under Clause 10 by the subsequent Government Resolution was bad and ineffective.

Issue (ii): whether the State was bound by promissory estoppel to consider extension of time and grant the consequential incentives.

Analysis: The Scheme promised tax incentives and a structured time framework for completion of the project, and the appellants altered their position and incurred substantial investment on that basis. The Court held that the State could not resile from the promise after inducing reliance, and no inequity was shown that would justify departure from the assurance. The hardships faced by the appellants also showed that the request for extension had to be examined on merits under the Scheme rather than rejected solely on the basis of the later Resolution.

Conclusion: The State was bound by promissory estoppel and had to consider extension under Clause 10 of the Scheme.

Final Conclusion: The appeals succeeded to the extent that the rejection based on the later Government Resolution could not stand, and the matter had to be re-examined by the competent authority under the Scheme for the limited purpose of determining entitlement to extension and resulting incentives.

Ratio Decidendi: A statutory incentive scheme incorporated into a notification cannot be curtailed by a later executive resolution, and the State is bound by promissory estoppel where eligible units have altered their position in reliance on the promise embodied in the scheme.

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