TaxTMI 
TaxTMI 
2016 (12) TMI 1907
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....d 10.03.2015 (P17) raising the demand for payment of External Development Charges (EDC) and has further sought refund of Rs. 11,82,47,000/- paid by it in lieu of EDC and cess thereon, besides refund of Rs. 7,09,23,000/- paid towards licence fee. Both the reliefs have been sought on the premise that the petitioner has been exempted from such levies under the Industrial Policy, 2003. In the second writ petition, there is a challenge to the letters dated 14.10.2013 (P11) and 15.11.2013 (P12) requiring the petitioner-Company to obtain 'No Dues Certificate' from Greater Mohali Area Development Authority (GMADA) upon payment of External Development Charges and licence fee as a pre-condition for processing the Change of Land Use (CLU) despite exemption of Change of Land Use charges as well as other levies under the Industrial Policy, 2003. The petitioner has also assailed the letter dated 22.11.2012 (P13), asking it to obtain NDC from GMADA as a pre-condition for allowing concessions under the Punjab Apartment and Property Regulation Act, 1995 (in short, 'the PAPRA, 1995'). Similar challenge is laid to yet another letter dated 28.08.2012 (P18) requiring the petitioner to obtain NDC from G....
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....ted with the State Government under Section-44 (2) of the Act. To be entitled to avail of these benefits, the eligibility of each such park / estate / zone will be assessed and determined by the Empowered Committee for Industrial Approvals. Upon approval of the Committee, the Department of Industries will issue an eligibility certificate. 10.4.2 Change of land use Change of land use will not be required anywhere in the State except in the areas falling within the municipal limits, Chandigarh Capital periphery or planning or controlled areas and along the notified schedule roads and bye passes (as and when notified by Department of Housing & Urban Development). However, in the case of Industries being set up in the areas other than specified above, intimation by the Industries Department about the location of the proposed unit shall be sent to Chief Town Planner, Punjab, Department of Housing & Urban Development, so as to keep the data bank regarding land use updated. 10.4.3 Sale / Transfer of developed infrastructure There shall be no stamp duty on first sale/transfer of developed infrastructure by the developer in industrial parks / complexes as....
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.... under Punjab State Tubewell Act, 1954 to dig Tubewell in project area for requirement of the project was allowed. v) Permission under the provisions of Punjab Mines & Mineral Act shall be allowed within the project area for works relating to development of the project. However, due charges will be payable. vi) High-rise buildings upto 45 mtrs. shall be allowed subject to Air Safety Regulations, Traffic Circulation and Fire Safety Norms. vii) Work contract tax on construction material required for the project shall be charged at minimum floor rate. viii) FAR or 2 shall be allowed for industrial and commercial purpose. However, the relevant Building Bye-laws/regulations shall be applicable to the area. The guidelines issued by the Department of Industries & Commerce for Industrial Parks shall also be applicable. ix) The State Government will try to ensure that connectivity to power, roads, accessibility, communication, civic and other infrastructure upto project is provided within 240 days from the date the same is applied for to the concerned department/agency/authority/local body on fulfillment of various terms and conditions required i....
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.... the State Government's commitment to attract new investment in Punjab State under the Industrial Policy, 2003 and that the State Government agreed to grant special package of concession to enable the petitioner to implement its project for which the parties agreed to the terms and conditions as contained in Para-5 of the Agreement. Some of the agreed terms and conditions are as follows:- (i) The Company shall make an investment of Rs.952 crore including fixed capital investment of at least Rs.100 crore at one location, as defined by the Department of Industries under Industrial Policy, 2003, by setting up of Information Technology Parks projects in 125 acre of land at Mohali with an investment of about Rs.952 crore within a period of 3 years, effective from 29.03.2006. The said project shall have to be fully implemented and brought into commercial production within the said stipulated period. (ii) xxxx xxxx (iii) The project of Information Technology Park shall be further subject to the provision of the guidelines notified by Department of Industries & Commerce. Some of the relevant provision shall be:- a. A minimum of 60% of area will ....
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....e project shall not be advertised/launched and no money will be collected from general public for allotment of land/plot/flat/any space till such time the layout/zoning plans are cleared from the competent authority. d) xxxx xxxx e) xxxx xxxx f) xxxx xxxx g) xxxx xxxx h) xxxx xxxx i) The State Government will try to ensure that connectivity to power, roads, accessibility, communication, civic and other infrastructure upto project is provided within 240 days from the date the same is applied for to the concerned department/agency/authority/local body on fulfillment of various terms and conditions required in this regard at such rates/fee etc. which shall not be less favourable to them compared to similarly placed projects/customers. j) The project of industrial park shall be exempted from PAPR Act. k) xxxx xxxx l) xxxx xxxx m) xxxx xxxx n) xxxx xxxx o) xxxx xxxx p) xxxx xxxx q) Proportionate cost of infrastructure development which will be carried out by the State Government in the area where project is located shall be borne by all the developers of Informat....
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....8.75 lacs stood paid by it. Petitioner was accordingly asked to pay the remaining outstanding amount of Rs. 506.25 lacs in six equated biannual instalments along with 10% compound interest. The petitioner-Company deposited certain amounts from time to time which were adjusted against the payment of External Development Charges as was depicted in the revised demand notice dated 13.12.2011 (P14) according to which the outstanding dues were to the tune of Rs. 1917.41 lacs, which was payable in nine equated biannual instalments by 27.04.2016. (13) The petitioner is said to have made some more payments towards External Development Charges and in this manner a sum of Rs. 965.25 lacs remained outstanding as on 29.09.2014, due to non-payment whereof, show cause notice dated 29.09.2014 (P15) was served on it. The petitioner replied to the show-cause notice pointing out that as per the amicable settlement between the parties, a sum of Rs. 200 lacs was paid by it so that GMADA could clear the pending revised Layout Plan/Zoning Plans/Building Plans. The GMADA, however, did not accede to the petitioner's request and served it with the impugned memo dated 10.03.2015 (P17) informing that as pe....
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....rincipal premise that the petitioner-company has been exempted from the levy of EDC and licence fee etc. under the Industrial Policy, 2003 hence it cannot be compelled to pay these charges as a pre-condition for grant of CLU or for sanctioning of Lay Out and Zoning Plans. Rest of the facts are identical to those averred in the first petition. THE RESPONDENTS' CASE (17) State of Punjab through the Department of Industries and Commerce has filed a short affidavit-cum-reply, admitting the fact that all the Mega Information Technology Parks Projects including that of the petitioner-Company were approved by the Empowered Committee in its meeting held on 29.03.2006 followed by the Agreement with the State Government on 11.10.2006. It is interestingly averred that in view of the amendment made in the Allocation of Business Rules on 16.03.2012, the cases/files of all such Projects approved by the Empowered Committee stood transferred to the Department of Information Technology vide letter dated 04.04.2013 and as such the detailed reply, if any, is to be filed by the Department of Information and Technology. (18) The Director-cum-Secretary, Department of Information Technology (res....
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....05.12.2014. When the petitioner became a defaulter, it itself applied on 25.07.2014 and 27.11.2014 (R1 & R2) for rescheduling the payment of EDC etc. The revised schedule of payment was also not adhered to by the petitioner. (22) In the meantime, the State Government having regard to the difficulties being faced by the developer companies, took a fresh policy decision dated 06.02.2015 (R3) to give yet another opportunity to the developers to implement the Projects in public-interest. The Policy contemplates re-scheduling the payment of outstanding dues provided that 10% of the defaulted/due amount was paid. It was in terms of the aforestated policy that a revised demand notice dated 10.03.2015 (P17) was served on the petitioner according to which an amount of Rs. 2.26 crores was required to be deposited till 09.04.2015. The petitioner, instead of depositing the said amount, challenged the said demand notice, may be to thwart the payment of outstanding dues. It is also alleged that various complaints, oral and written, have been received against the petitionercompany from the general public/allottees for not honoring the commitments made to such allottees while selling the plots.....
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....ibber, Senior Advocates on behalf of the petitioner(s) and Shri RS Khosla, Senior Advocate for GMADA as well as Shri Rajesh Bhardwaj, Addl. AG, Punjab at a considerable length and have gone through the relevant record with their assistance. (27) Learned counsel for the petitioners urged that:- (i) the respondents are bound by the principles of 'legitimate expectation' and 'promissory estoppel', for the petitioner entered into the Agreement dated 11.10.2006 on the basis of the incentives and concessions provided for under the Industrial Policy, 2003 and which were further re-affirmed by the Letter of Intent dated 05.05.2006 (P3). The respondents are said to have made an unequivocal promise to give special package of incentives through the written agreement between the parties. The petitioner allegedly altered its position on account of the assurances given by the respondents and has already made a huge investment of Rs. 150 crores, therefore, the respondents cannot arbitrarily revoke or rescind the incentives and concessions in derogation of the promise given or to the disadvantage of the petitioner. Reliance was placed on two decisions of the Supreme Court in (i) Kasink....
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....tate or its agencies towards the above-mentioned External Development Works can be appropriated from the petitioner in view of express exemptions granted to it from the levy of EDC; (vii) as regard to the petitioner's liability to pay "proportionate cost of infrastructure development which will be carried out by the State Government in the area where project is located...", the cost of infrastructure is neither statutory in character nor has it been defined in PAPRA, 1995. Further, unless the expressions "in the area" is defined and demarcated, the amount of proportionate cost to be apportioned by the petitioner cannot be determined. Furthermore, the liability towards proportionate cost of infrastructure-development in the area where the petitioner's project is located would be determined at an appropriate stage only after:- (a) the area where infrastructure has been developed is defined in metes and bounds; (b) the nature of infrastructure developed in such area is explained; (c) the cost incurred on each component of the infrastructure is quantified; (d) a fair and transparent criteria is evolved for proportionate distribution of such ....
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....arbitrarily approved and have been erroneously linked with payment of EDC and licence fee etc. The process of Change of Land Use has also been held up for the same untenable reason. The respondents themselves are thus responsible for the inordinate delay caused in the development of the project, therefore, the time period is liable to be extended and counted from the date all the requisite permissions and approvals are accorded; (xii) assuming that the petitioner is liable to pay EDC, CLU charges or licence fee (though denied), the revised schedule of payments sent by the respondents itself permits to pay the same till 09.10.2016 which was yet to expire. The respondents have therefore, illegally and arbitrarily withheld the necessary approvals and permissions on the basis of an objection, which as per their own action, is premature; (xiii) the Agreement dated 11.10.2006 was entered into with the State Government through the Secretary, Department of Industries and Commerce, Punjab. The State Government has not rescinded the Agreement. GMADA which is a subservient statutory authority of the State, to whom the development works might have been entrusted, has no autho....
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.... pay the agreed costs; (iii) all the components of 'External Development Charges' as defined in Section 2(p) of PAPRA, 1995 are included in Clause-5(iii)(e) of the Agreement (P4) which defines 'infrastructure development' and is not an exhaustive clause. As the petitioner agreed to pay the proportionate cost incurred towards infrastructure development of the area where its project is located, the petitioner cannot blow hot and cold and seek implementation of the Agreement but not the Clause imposing above-stated liability on it; (iv) the petitioner cannot take any advantage of the decisions of this Court in Janta Land Promoter's case or Chandigarh Overseas Pvt.Ltd. case (supra) for the reason that there was no clause in the Agreements entered into between them and the State Government, obligating those developers to pay EDC or proportionate cost of infrastructure development. On the other hand, such a condition was expressly agreed to by the developer in the case of Hansa Tubes Pvt.Ltd. (supra) as also by the petitioner vide Agreement dated 11.10.2006. In fact, such a condition was conveyed to the petitioner, in no uncertain terms, vide LOI dated 05.05.2006 also [....
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....r, however, continued to delay compliance of most of the conditions contained in the above-stated notification and is thus responsible for the automatic withdrawal of the incentives and concessions. Legislative Scheme of PAPRA, 1995 (29) The Statement of Objects and Reasons of PAPRA, 1995 unveils that the problem of controlling the activities of private colonizers engaged in the construction of apartments and sale of plots has been engaging the attention of State Government as some of such colonizers were operating solely with the motive of profits without any regard to the interest and rights of the individual buyers. The State Government, therefore, felt the need to formulate a law in order to check, control and regulate the activities of private colonizers and protect the interest of consumers. The Model Draft Bill circulated by Government of India on the same subject elucidated necessary guidance to the State Government to enact such a legislation. (30) Section 2 of the Act contains the definition clause, the relevant parts whereof have already been reproduced. Section 5 mandates that any promoter, who desires to develop a land into a colony, shall have to apply in the....
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....e State Government is of the opinion that, the operation of any of the provisions of this Act, causes undue hardship, or circumstances exist which render it expedient to do so, it may exempt, by a general or special order, any class of persons or arrears from all or any of the provisions of this Act, subject to such terms and conditions as it may impose." (33) From the submissions made by learned counsel for the parties read with their exhaustive pleadings, we find that the following points arise for consideration:- i) Whether the phrase 'cost of infrastructure development' as contained in para 5 (iv)(q) of the Agreement dated 11.10.2006 is synonymous to the expression 'External Development Works' as defined in Section 2(p) of PAPRA, 1995? ii) If so, whether the petitioner is exempted from payment of External Development Charges/Cost of Infrastructure Development in view of para 5(iv)(j) of the Agreement dated 11.10.2006 whereunder its project has been exempted from PAPRA, 1995? iii) What is the effect of para-6 of the Agreement dated 11.10.2006 on the petitioner's claim for exemption from payment of EDC and other charges? iv) Whether the time....
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.... shall be borne by all the developers of Information Technology Park/Industrial Park proportionately". The petitioner not only accepted the above reproduced unilateral condition, it voluntarily entered into the Agreement dated 11.10.2006 and bound itself down under sub-clause (q) of para 5 to pay the proportionate cost of infrastructure development to be carried out by the State Government in the area where the project is located. (36) It would be apt at this stage to again notice the definition of 'External Development Works' which "includes roads and road systems, water supply, sewerage and drainage systems, electricity supply or any other work which may have to be executed in the periphery, of or outside, a colony for its benefit". As against it, the phrase "Infrastructure Development" has been illustrated in para 5(iv)(e) of the Agreement, according to which, the 'Infrastructure Development' "would include roads (including approach roads), water supply and sewerage facilities, common effluent treatment facilities, telecom networks, generation and distribution of power, parking facilities, parks, street lights and such other facilities as are of common use for industrial acti....
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....within the stipulated period of three years commencing from 29.03.2006 (which was later on extended upto 28.03.2012, with a further renewal offer under the new policy decision dated 06.02.2015), the concessions enumerated in para 5(iv) were liable to be automatically withdrawn. Since we have viewed that the petitioner is liable to pay the proportionate costs towards infrastructure development works which include the 'External Development Works' within the meaning of Section 5 of PAPRA, 1995, it is not necessary to dwell upon the implications of petitioner's failure to make an investment of Rs. 952 crore within the initially agreed and/or subsequently extended period. (40) We, however, hasten to add that the respondent-GMADA's plea that the time is the essence of the contract and the petitioner having failed to honour the prescribed time schedule is not entitled to any concessions/incentives, merits rejection. The time limit was prescribed by the State Government while it entered into agreement with the petitioner on 11.10.2006. The State Government thereafter at its own has extended the time limit repeatedly and its latest policy dated 06.02.2015 (R3) conclusively establishes it....
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....he respondents cannot be permitted to exempt one project 'completely' or the other 'partially'. On a minute consideration of the contention, it is apparent that the terms and conditions of the Agreements dated 24.06.2005 between State of Punjab and M/s Janta Land Promoters (R6), dated 03.04.2006 between State of Punjab and M/s Chandigarh Overseas Pvt. Ltd. on the one hand, and those of the agreement dated 11.10.2006 between the petitioner and the State of Punjab are distinctly different. There was no clause to levy proportionate cost of infrastructure development works or External Development Works in the agreements entered with M/s Janta Land Promoters and M/s Chandigarh Overseas. Later on, such a liability was sought to be fastened on them against which their respective writ petitions were allowed vide judgments dated 26.11.2010 and 09.09.2013 (P18 & P19). Contrarily, somewhat similar clause was inserted in the agreement dated 15.10.2007 between State of Punjab and M/s Hansa Tubes Pvt. Ltd. who challenged the levy of EDC and claimed parity with M/s Janta Land Promoters and Chandigarh Overseas. A Division Bench of this Court to which one of us (Surya Kant, J) was a member, turned ....
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....ost of infrastructure works. (46) Adverting to the petitioner's challenge to the levy of Licence Fee, Sh. Khosla, learned senior counsel for GMADA has very fairly clarified that as per the terms and conditions of Agreement no Licence Fee is leviable on the "industrial component" which is 60% of the total licensed area. However, there is no exemption of 'licence fee' on the "residential and commercial components" of the project which constitute 40% of the total area. The clarification given on behalf of GMADA appears to be correct as the petitioner too has not questioned the same. The respondents shall thus work out the petitioner's liability towards licence fee accordingly and if anything is found to have been paid in excess, the same shall be adjusted towards other permissible liabilities. (47) So far as the petitioner's liability towards 'Punjab Urban Development Fund' is concerned, it is totally inescapable for the reasons that firstly the petitioner has been expressly declined such exemption of Section 32 of PAPRA, 1995 by way of Notification dated 29.10.2009. Secondly, the said notification is not under challenge in petitioner's both the writ petitions. Thirdly, there is....