TaxTMI 
TaxTMI 
2009 (6) TMI 1028
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....d Raj Yadav, Advs. for Nanavati Associates in Special Civil Application No. 18690 of 2005 For the Respondents : Kamal B. Trivedi, Adv. General and Sangeeta Vishan, AGP JUDGMENT K.A. Puj, J. 1. Since all these petitions and/or applications center round some of the common issues and since they were heard together, the same are being disposed off by this common judgment and order. 2. Special Civil Application No. 5391 of 2004 is filed by Multiplex Association of Gujarat for and on behalf of its 11 members challenging the Circulars dated 23.11.2000 and 05.12.2000 and seeking directions to the respondent authorities to consider only entertainment tax payable notionally as capital value for the purpose of setting off the eligible capital investment of its members. 3. Special Civil Application No. 3371 of 2004 is filed by M/s. Essem Entertainment Private Limited for treating its amount of eligible capital investment at Rs. 1400 Lacs in place of Rs. 735 Lacs as indicated in TRC with a prayer for interim relief to provisionally calculate notional tax at 45% of the amount paid by the spectators as admission charges. 4. Special Civil Application No. 13566 of 2004 is filed....
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....2004 on 30.11.2005, this Court took the view that in absence of any exemption certificate or order of extension, which leads to an order of exemption, the persons, whose cases were in pipeline and even those persons, who have successfully obtained certificates etc., would be liable to pay 50% of their collection. All these matters rested there and this interim order was considered to have an application only to the collection made till the said date and not to the subsequent collection made during the pendency of all these petitions. Be that as it may, in this factual background, all these matters are heard by the Court. For the sake of convenience, facts and submissions are taken from Special Civil Application No. 5391 of 2004. 10. The questions posed by the petitioner Association for consideration of this Court are as under: Whether the action on the part of the respondents in considering the entire amount of the value of the ticket as the capital value for the purpose of setting off the eligible capital investment of the members of the petitioner Association is arbitrary, discriminatory and violative of fundamental rights of the members of the petitioner Association ....
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....hether the action on the part of the respondent State amounts to indirect withdrawal of the benefit that was made available under the Scheme to the members of the petitioner Association? 11. Before these questions are considered, it is necessary to record brief facts of the case. The respondent State had published a policy declaring incentives to the entrepreneurs who may come forward to establish Tourism industry in the State of Gujarat, subject to the terms and conditions set out in the Resolution dated 20.12.1995 containing the details of the said Scheme known as "New Package Scheme of Incentives for Tourism Projects - 1995-2000". The Preamble of the said Resolution passed by the respondent State is relevant to the present purpose. It says that the State Government had declared New Tourism Policy - 1995 - wherein Tourism has been accorded the status of an industry with a view to make available all fiscal and non-fiscal incentives, benefits, reliefs and concessions available to the industries. Based on the "New Tourism Policy" and in order to give a boost to tourism sector by attracting higher investment in the areas with tourism potential and to generate employment opportunit....
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.... subject to which incentives will be granted to the tourism units under the scheme and it also provides that breach of any of the said conditions will entail withdrawal of the incentives granted earlier with immediate effect. 16. Initially, the above Scheme was scheduled to be effective till 31.03.2000. However, the said period was extended from time to time and ultimately, the said period expired on 30.11.2000. Though the said Scheme is in force, the incentives made available under the said Scheme have been discontinued with effect from 30.11.2000 to the units which might have come into existence after that date. On the faith of the said policy containing incentives to the Tourism project, all the members of the petitioner Association have established entertainment complexes and each of them has (except City Pulse) invested more than Rs. 10 Crores towards cost of establishing such complexes. In all, more than 17 Multiplex Theaters have been established by the members of the petitioner Association and all of them are providing entertainment to the members of the public. Other Multiplex Theaters were being constructed in different parts of the State of Gujarat and total estimated....
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...., under the said Scheme, the members have invested Crores of Rupees and even running Multiplex Theaters in and around city of Ahmedabad and other parts of the State of Gujarat. Right from the beginning, all the members of the petitioner Association were given to understand that they will not be required to pay any tax for the period of 10 years or till their eligible capital investment was fully set off. This was on the faith of this solemn promise held out by the authorities in the Government that the members of the petitioner Association have invested Crores of Rupees in establishing their respective entertainment Complexes in and around the city of Ahmedabad and other parts of the State of Gujarat. 20. Mr. Nanavati further submitted that Under Secretary to the Government of Gujarat, Information and Broadcasting department, addressed a letter to the Entertainment Commissioner, Gujarat State, Gandhinagar on 23.11.2000 whereby he required the Entertainment Commissioner to mention in the certificate of exemption from payment of tax that the amount of tax is not included in the ticket charges and that the members of the public are not required to pay the amount of entertainment ta....
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....he value of the ticket is permitted to be appropriated by the respondent State towards the capital value for the purpose of setting off the eligible capital investment, instead of earning any profit, the concerned Members of the petitioner Association would be incurring losses of huge amount and in that case, he would not be able to exercise his right to settle in any part of the country. 22. It is further contended that if the entire amount of the value of the ticket is permitted to be appropriated by the respondent State towards capital value for the purpose of setting off the entire eligible capital investment, by notionally calculating the tax benefit as provided under the Scheme, instead of earning any profit, the concerned Member of the petitioner Association would be incurring losses of huge amount and in that case, he would not be able to carry out any occupation, trade or business. 23. It is further contended that the impugned action would result into deprivation of the right of the members of the petitioner Association to hold property save by authority of law enshrined under Article 300A of the Constitution of India. 24. It was also contended that it was never t....
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....f Gujarat. It is, therefore, contended that on proper interpretation of Clause 8 read with relevant provisions of the Scheme and the Act and also in light of the conditions set out in the exemption notification dated 14.02.1997, the authorities are required to notionally assess the entertainment tax which would have been otherwise payable in specie by such Multiplex Theater owners on the amount of the value of the ticket which they might have received from the spectators. 28. Mr. Nanavati further contended that the direction contained in the Circular dated 23.11.2000 proceeds on a basic misconception that the exemption under the Scheme is made available for the benefit of the spectators and not the Multiplex Theater owners. As a matter of fact, on the conjoint reading of the relevant Clauses of the policy and the exemption notification, it is clear that the exemption is made only for the benefit of the Multiplex Theater owners who would be induced to invest Crores of Rupees towards cost of constructing Multiplex Cinema Theaters in view of the benefit made available to them under the Scheme. Even in the Preamble of the Scheme itself, it is made clear that the objective of the Sch....
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.... of the exempting authority. 32. In Delhi Cloth and General Mills Co. Limited v. Commissioner of Sales Tax, Indore 1971 (28) STC 331, under Section 4 of the M.P. General Sales Tax Act, 1958 (prior to the introduction of Section 7-A therein in 1963), liability to pay sales tax is that of the dealer. The purchaser has no liability to pay tax. There is no provision in the Act which gives any statutory power to collect sales tax as such from any class of buyers. If the dealer passes on his tax burden to his purchasers he can only do it by adding the tax in question to the price of the goods sold. In that event the price fixed for the goods including the tax payable becomes the valuable consideration given by the purchasers for the goods purchased by him. If that be so, the tax collected by the dealer from his purchasers becomes a part of the "sale price" fixed, as defined in Section 2(o) of the Act. Unless the price of an article is controlled, it is always open to the buyer and the seller to agree upon the price payable. While doing so, it is open to the dealer to include in the price the tax payable by him to the Government. If he does so, he cannot be said to be collecting the ta....
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.... where tax was not actually payable but was to be determined notionally for some other purpose i.e. of computing tax leviable to find out the extent of exemption enjoyed by the unit to be adjusted against the exemption limit. The result of giving effect to Rule 50(ii) as suggested by the assessee would be altering the very edifice of the exemption spell out in the scheme. Therefore, the Tribunal was right in holding that since the assessee's sales were tax-free the provisions of Rule 50 of the Gujarat Sales Tax Rules, 1970 and Section 8A of the Central Sales Tax Act could not be invoked. 35. In Madras Rubber Factory Limited v. Union of India and Ors. 1981 E.L.T. 804 (Delhi), it is held that if the exemption notification does not contain a condition that its benefit should be passed on to the consumer, the manufacturer can retain the benefit of exemption notification. It is further held that the conditions for availment of exemption notification should be a part of that notification and cannot be altered by administrative directions, guidelines, press notes or trade notices. 36. In State of Jharkhand and Ors. v. Tata Cummins Limited and Anr. 2006 (145) STC 340, it is held ....
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....it on to the State Government, then it would amount not only acting against public interest, but also unjust enrichment and illegal extraction of money from all concerned, inter alia the spectators. Since this is the case pertaining to exemption as granted by the State, the question of any bifurcation under the head of anything, would be irrelevant and what would be relevant is that the Theater can only charge ticket price per sale without any other taxation or duty component since there is no question of doing so. 39. Mr. Trivedi further contended that Section 3(1) of the Entertainment Act provides for levy and payment of tax to the State Government for every payment or admission to an entertainment. As per the Act, 45% tax is leviable for city/town/places having population less than 1 Lac and where the population exceeds 1 Lac, the tax levy is 50%. Sub-section (4) of Section 3(1) of the Entertainment Act mandates that unless provided for in the Act, every ticket, pass etc. shall state therein the amount of payment for admission and the amount of tax payable under Section 3(1). This being the statutory position and a requirement and the very fact that the Statute is not challen....
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.... the entertainment tax and notification and comply with the condition stipulated therein. Any breach of any condition or non-compliance of Statute, notification and Circular would result into denial and/or termination of exemption granted. It is, therefore, contended that where the exemption is claimed under Government Resolution/notification/Circular under the Entertainment Tax Act and where for example, Rs. 100/- is charged for admission, then it has to be taken as a payment by an individual to the proprietor/owners of the Multiplex Theater as payment for admission excluding tax. 41. Mr. Trivedi further contended that the members of the petitioner Association were given to understand the mode and manner which was also made known to the public. The petition is, therefore, not maintainable and the issue framed does not take the petitioner anywhere and the petitioner cannot take shelter of anything and unjustly enrich themselves etc. There cannot be any estoppel against law and it is also contended that there is no question of linking of the investment made to the mode and manner of enjoyment of exemption. So far as content of the exemption is concerned, it is not effected in any....
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....ax which is to be levied on the payment for admission to the entertainment. There is 50% tax holiday for the city having population of more than 1 Lac and 45% for the city having population less than 1 Lac. All the entertainment Units are charging Rs. 100 towards payment for admission to entertainment only. An illustration is given under which payment of admission to entertainment is of Rs. 200, less 50% of tax as per Section 3(1), chargeable amount remains Rs. 100. It is, therefore, contended that if the payment for admission is Rs. 200/- less 50% of tax is deducted, the net chargeable amount comes to Rs. 100/- which is not collected by virtue of the provisions of the Act, Tourism Policy 1995-2000 and notification. 45. Mr. Trivedi, therefore, contended that the owners of the Multiplex can only charge what is permissible under the Act towards payment for admission to entertainment and if tax amount is exempted by virtue of the notification, the owner shall not be eligible to levy or collect or charge the tax amount. By exemption from payment of entertainment tax, the spectators directly get the benefit of tax exemption and likewise the owners of the entertainment unit get the be....
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....wards entertainment tax, the proprietor is left with 100% which he charges for admission. 48. Mr. Trivedi further contended that if any entertainment unit is desirous of availing any benefit of the policy and notifications, then in that case, the entertainment Units will have to fall in line with requirements provided in the said Policy and notifications. The entertainment Units will have to strictly adhere to the conditions mentioned in the notification and once having accepted the terms and conditions of the said notification, for the purpose of availing of the tax exemption, they cannot now back out under the guise that what the entertainment units are charging towards entertainment tax cannot be recovered by the State Government. Any breach of any condition or non-compliance of any of the provisions of the Statute, Notifications and Circulars would result in termination of exemption granted. It is further contended that the petitioner Association cannot misread the conditions of the Resolutions to suite their convenience and unjustly enrich its alleged members under the guise of tax exemption. There cannot be any estoppel against law and there is no question of linking of th....
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....ars dated 23.11.2000 and 05.12.2000 issued subsequent to the notification declaring new package Scheme of incentives are absolutely illegal. It is further contended that the entertainment complexes which have been put up pursuant to the said Scheme is entitled to a complete tax holiday for a period of 5 to 10 years and the said incentives are available to the entertainment complexes under the Tourism Policy. The object behind the said incentive Policy is to encourage investments in the Tourism sector. As a matter of fact, the Preamble of the Scheme itself declares that the objective of the Scheme is to give a boost to Tourism sector by attracting higher investments in the areas with Tourism potential. Furthermore, the quantum of exemption is linked to the investment made which also indicates the object of the Policy which is to benefit the investor. The impugned Circular proceeds on the incorrect assumption that the tax exemptions should go directly to the spectators. The impugned Circulars are, therefore, illegal and ultra vires since it runs against the object of the Policy and, therefore, deserves to be quashed and set aside. It is further contended that even otherwise the contr....
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.... new package scheme for incentives for Tourism 1995-2000, inter alia, provides for incentives upon satisfying the conditions enumerated in Sub-clauses (a), (b) and (c) of Clause 3 of the said notification. It is not in dispute that all the said conditions have been complied with by the members of the petitioner Association and have invested Crores of Rupees upon the said declared Policy. None of the conditions of the said Scheme dated 20.12.1995 have been breached by the members of the petitioner Association. It is, therefore, not open for the respondent authorities to deny the benefit of the Scheme by relying upon the Circulars issued subsequent to the declared Policy. When a concession of a benefit or an exemption in the nature of tax holiday is granted on fulfillment of certain conditions and such conditions are fulfilled by the party, to whom such benefit or concession or exemption is given, such person cannot be denied such benefit or concession or exemption merely on the basis of Circulars issued subsequent to the said Policy. The respondent authorities are trying to wriggle out from the promises made to the investment based upon which Crores of Rupees are invested by the mem....
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....hich is issued for admission to an entertainment in his multiplex unit, shall state therein (i) the amount of payment for admission to such entertainment and (ii) the amount of tax payable on such payment for admission. There are no other provisions under the said Act relieving the owner of the Multiplex unit from the said obligation. In the normal circumstances, any viewer in order to be admitted to entertainment in any multiplex unit, purchases a ticket, which may be issued to him on payment of the admission charges + entertainment tax + surcharge, if any. Out of the amount so collected, a portion thereof representing the admission charges is retained by the owner, whereas the remaining amount collected by way of entertainment tax, has to be paid over to the State Government by the Multiplex unit. Thus, for all practical purposes, the entertainment tax is just like excise/customs duty payment which is in the nature of indirect taxation in as much as the burden thereof is taken care of by the viewer and not by the Multiplex unit owner. If the multiplex unit wants to charge Rs. 120 as admission charges, he will also charge equal amount i.e. Rs. 120 by way of entertainment tax, so t....
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....ary cinema theater owner who is not exempted from payment of entertainment tax, for carrying to admission charges of Rs. 14.50 per ticket for himself, is to charge 50% entertainment tax i.e. of equal amount of Rs. 14.50. In other words, if exemption from entertainment tax is made applicable to him, then in that case, he would not have recovered the said amount of entertainment tax of Rs. 14.50 from the viewers. 58. Mr. Trivedi submitted that if this analogy is applied in case of Multiplex units, from the ticket, the following position appears as regards the charges being recovered from the viewers where there is exemption from payment of entertainment tax: Admission Rate : - Rs.120 Entertainment Tax : - Rs.0.00 Surcharge : - Rs.0.00 Total Rs.120 59. This ....
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.... Trivedi further contended that the stand of the petitioner Association for counting 50% of the admission charges of Rs. 120/- which comes to Rs. 60/- per ticket to be adjusted against the accumulated eligible capital investment cannot be accepted as in that case, the petitioner would go on enjoying the benefit of exemption of entertainment tax for a very long period, which will not only be against the consistent practice and legal provisions but also against the public interest whereby public exchequer of the State will be adversely affected and hence, such a situation may not be countenanced by this Court. Thus, even while assuming without admitting that the members of the petitioner are entitled to incentive benefits of exemption of entertainment tax, then in that case also, the notional calculation of the tax liability and the adjustment thereof against the eligible capital investment are required to be effected as per the past practice and the provisions of law, as notified by the State Government from time to time. 63. An affidavit-in-rejoinder of the petitioner Association to the further affidavit filed on behalf of the respondent No. 4 is filed on 23.9.2008. Based on thi....
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..... It would be incorrect to say that because the owner of the Multiplex theater is not charging any entertainment tax, but is charging Rs. 100/- as the admission fees, he is pocketing Rs. 100/- and as such, he will have to pay Rs. 100/- as tax on the admission fee of Rs. 100/-. The contention raised by the State Government that when the rate of tax is 50% of the gross amount, equal amount of Rs. 100/- has got to be notionally added on the basic net ticket rate of Rs. 100/- is de horse the provisions of the Act and has, therefore, no legal basis. 65. Mr. Nanavati further contended that the entire argument of the State Government appears to be on the basis that the benefit of the exemption from payment of entertainment tax is to go to the viewer and not to the Multiplex owner. This is also contrary to the provisions of the Act and the incentive Policy and, therefore, not tenable at law. The incentive policy was declared by the State Government with a view to make available all fiscal and non-fiscal benefits, reliefs and concessions available to industries. Based on the tourism policy and in order to give boost to tourism sector by attracting higher investment areas with tourism pot....
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....wing the price of the ticket inclusive of tax and seeking exemption on the basis of the rate applicable by calculating tax on the receipt. Since beginning, the members of the Association have been filing monthly returns on the basis of tax calculated on the receipt made and the respondent authorities have been accepting the same without any objection. In the case of M/s. Inox Multiplex, the Mamlatdar, Vadodara has passed an assessment order by calculating tax on the total receipt i.e. for example for the period between 19.09.2003 and 25.9.2003, the gross collection is Rs. 10,30,746/-. The Mamlatdar has assessed Rs. 5,15,373/- as net tax payable at the rate of 50%. M/s. Inox Entertainment Limited, Vadodara was issued an ad hoc eligibility certificate for an amount of Rs. 554.45 Lacs. For the purposes of calculating the amount of tax till the limit of Rs. 554.45 Lacs, the Mamlatdar has considered 100% of the gross collection i.e. on gross collection of Rs. 4,32,268/-, the Mamlatdar has assessed a tax on Rs. 4,32,268/-. 68. Mr. Nanavati further contended that even according to the authorities of the State Government, once a unit exhausts its limit, the tax is calculated on the gros....
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....en the Gujarat Entertainments Tax Act, 1977 came to be enacted replacing the Bombay Entertainments Duty and Advertisements Tax Act, 1923. The aforesaid aspect is very much discernible from the further affidavit of the State filed in the present petition as well as from the petitioner's rejoinder. Thus, it is factually incorrect to contend that the aforesaid clarification has cut down the scope of earlier resolutions. It is, therefore, contended that there is no question of applying various judgments such as the judgment reported in AIR2008SC693 relating to invocation of doctrine of promissory estoppel in cases where the Government had announced a particular quantum of benefit for specific period and before expiry of the said specific period, the quantum of benefit is reduced. The present case is not the case where any quantum of benefit is reduced or the calculation thereof is changed. 70. Mr. Trivedi further contended that the provisions contained in Section 2(g) read with Section 3(4) of the Gujarat Entertainments Act, 1977 were never there in the Bombay Entertainment Duty and Advertisements Tax Act, 1923. Hence, the said judgment relating to the provisions of the later en....
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....ax upto 100% of capital investment." The said Clause provides that the assessee viz. the proprietor of an entertainment complex is exempted from paying the tax, payable by him under the Act, till tax is 100% set off against the 100% value of the eligible capital investment made by the proprietor. The question which has arisen in the present petition is how the amount of "tax" should be determined for set off against the available tax incentives i.e. 100% of the eligible capital investments. The issue has arisen in context of the legal provision of the Gujarat Entertainment Tax Act. Section 3 of the Act is held to be a charging Section. It is held that liability for payment of duty is imposed upon the proprietor and not upon the visitors of the theater. The proprietor does not act as an agent of the Government for collection of duty. The entertainment duty is a payment which the proprietor is required to make as a condition for enabling visitors to attend or continue to attend the entertainment. 73. Section 3 which levies tax provides for levy on "gross" payment received from consumer as is clear from the words of Section 3 and also as interpreted in [1971] 3 SCR 398 . 74. The....
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.... . The proprietors of entertainment have made investments acting on the terms of the notification and calculating the benefit available to them in terms of Section 3 of the Act. On the principles of promissory estoppel, the Government is estopped from changing the basis of calculation of tax liability for calculating set off against amount of incentive available. It would also amount to breach of public faith. 80. The contention of the State that the benefit of exemption is intended to be passed on to the consumer though appears to be sound, does not fit in the context of the exemption notification. It is well settled that unless the exemption notification contains such specific condition, such condition cannot be implied. 81. The tickets which are issued by the proprietors are approved by the authority. When ticket issued as approved by the authorities show that tax element is "0", it necessarily means that the authorities are satisfied that nothing is being recovered as and by way of tax from spectators. There is, therefore, no scope for assumption that any amount is received by way of tax from the spectators. Such an exercise is not permissible. Addition of notional tax an....
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....urism, without considering the provisions of the Scheme, has passed a common order dated 27.02.2005 which is unduly delayed. The request for extension of time made by the petitioners on the ground of delay in completion of the project (i) due to earthquake that took place in the State on 26.01.2001 and (ii) large scale communal riots which took place in the State from 28.02.2002, has been rejected by the Commissioner of Tourism by a common order dated 27.02.2005 passed pursuant to the directions issued by this Court in Special Civil Application No. 5574 of 2004, which was filed by the petitioners through its Association. The reasons for rejecting the application for extension of time as set out in the common order dated 27.02.2005 are (i) sufficient time/extension has already been given for starting commercial activities of the project, (ii) further extension of time limit would lead to undue burden on the State's exchequer and (iii) multiplicity of multiplexes beyond the requirement in the State. 84. Mr. Nanavati further submitted that while rejecting the request for extension of time made by the petitioners under Clause 10 of the said Scheme, the facts of individual cases ....
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.... tried to justify the said rejection of extension application by contending that the Resolution dated 28.06.2000 expressly provides for time limit in Sub-clauses of 3 and 4 of Clause (B) with a categorical rider to the effect that no further extension or relaxation will be available to pipeline units and that the pipeline units failing to complete the projects within the prescribed time limit (31.07.2002) shall not be eligible for any incentives, ad hoc or final, as per the Policy of 1995-2000. 90. Mr. Nanavati submitted that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. The Commissioner of Tourism, while rejecting the application for extension of time, did not refer to the said resolution dated 28.06.2000 and has not rejected the applications for extension of time, on the said ground. It is, therefore, not open for the State Government to justify its decision on the ground not mentioned in the impugned order. 91. Mr. Nanavati further submitted that even otherwise, the impugned decision dated 20.07.2005 is unduly d....
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....ond the control of the petitioners that the projects could not be completed within the time stipulated. Assuming that there is a built-in time schedule within which commercial activities have to start, the State Government, in any event, has power to extend such time limit. Such powers should be exercised because the delay is due to the act of God or reasons beyond the control of the petitioners. The State Government had issued a Circular dated 27.03.2001 to the effect that all construction activities would be subject to the regulation that would be framed. The said regulations in terms of the said Circular were framed and issued only on 18.05.2002 and the building plans were thereafter sanctioned after almost 3 to 4 months. In between, there were large scale communal riots on 28.02.2002. There are units which are right in the epicenter of earthquake that is Gandhidham and right in the most affected riot areas i.e. Naroda. The project of the petitioners and other similarly situated projects are, therefore, entitled to exclusion of the said period. For this purpose, Mr. Nanavati relied on the decisions of (1) Industrial Finance Corporation of India Limited v. Cannanore Spinning & We....
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....r extension of time in case of delay in implementation of the project. Clause 10 of the said Scheme, inter alia, provides for procedure for registration of Tourism Units for incentives. The said Clause provides that a Tourism Unit eligible for the Scheme will apply to the Director of Tourism and he will scrutinize the application and will issue temporary and permanent registration. Sub-clause (a) of Clause 10 provides that the Director of Tourism shall give provisional registration in the first instance upto two years to the eligible units. It is further provided under Sub-clause (b) that if such a unit is not in a position to start commercial operation during the initial validity period, the unit will have to apply with the progress report to the State Level Committee which is authorized to grant extension upto six months at a time for a total period of two years, after examining the difficulties experienced by the individual unit in implementing the project. Sub-clause (c) inter alia provides for a situation where if a unit is unable to go into operation after it has been given extension under para (b), will have to inform to Government the reasons of delay. Such application will....
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....he said four petitioners shown in Group-B have invested substantial amount of money on anticipation of the grant of extension of time in terms of the original Scheme Clause 10. The original Scheme providing for extension of time created a right in favour of the petitioners to approach SLC for extension of time under certain circumstances, which could not have been taken away retrospectively by Resolution dated 28.06.2000. The principles of promissory estoppel would, therefore, be applicable since the petitioners altered their position pursuant to the recommendations of the competent authority, which were made in terms of Clause 10 of the said Scheme. The petitioners' right to get extension under Clause 10 of the said Scheme is an accrued right, which could not have been taken away by any subsequent stipulation as in the resolution dated 28.06.2000. The petitioners have acted upon the resolution dated 20.12.1995 and have made substantial investments on that basis. The said Resolution contemplated commencement of commercial operations beyond the initial validity period of the TRC and, therefore, conceivably even after the period of operation of the Scheme i.e. 31.07.2000. Any sub....
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.... is hit by Article 14 of the Constitution of India. After the Government Resolution dated 28.06.2000, time and again resolutions were issued extending the operative period of the entire Policy/Scheme. As is evident from the said Scheme, the incentive of tax exemption/tax holiday is available to Tourism units, on the basis of the 100% of the investment made for the period ranging between 5 to 10 years. After 28.06.2000, the Government issued two resolutions dated 31.07.2000 and 30.09.2000 inter alia, extending the operative period of the Scheme for a period upto 30.09.2000 and 30.11.2000 respectively. Thereafter, resolutions were issued on 31.03.2001 and 12.07.2001 extending the operative period of the Scheme upto 30.06.2001 and 30.09.2001 respectively for all the aforesaid tourism projects, except Multiplex Cinemas. Thus, two resolutions were issued because of the earthquake that took place on 26.01.2001. Though all the petitioners' projects are falling in the category of either "Prestigious Tourism Units" or "Large Scale Tourism Units", which require considerable time to implement the projects, the Government issued resolutions extending the benefit to all Tourism Projects may....
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....ced before the expiry of the aforesaid Policy i.e. initially on 31.07.2000 and thereafter on 30.11.2000, or cases where application for TRC was made latest by 31.07.2000 with compliance of the requisite effective steps. The said Resolution dated 28.06.2000, expressly laid down the time limit in Sub-clauses (3) & (4) of Clause B thereof with a categorical rider reading to the following effect. No further extension or realization will be available to pipeline units and the pipeline units failing to complete the projects within the prescribed time limit, shall not be eligible for any incentives, ad hoc or final, as per the policy of 1995-2000. 103. Apart from this, Sub-clause (6) of Clause (B) of the said Resolution dated 28.06.2000 categorically suggests that the validity period of TRC issued under the said Policy of 1995-2000 shall be two years from the date of issue of TRC or from the date on expiry of the operative period of the said Policy, whichever is earlier. 104. Vide further Resolution dated 31.07.2000, the State Government extended the time limit of the aforesaid policy - 1995-2000 upto 30.09.2000, which was further extended upto 30.11.2000 vide another Resol....
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....r extension of the said policy vide later Government Resolutions dated 31.07.2000 and 30.09.2000. 110. Thus, the time limit for commencing commercial activities in case of pipeline cases and of large-scale and prestigious projects came to be fixed upto 30.11.2002 and that the said time limit was never extended thereafter. The interpretation of the resolutions in question as sought to be canvassed by the petitioners seeks to extend the time limit for commencing commercial activities upto different dates in different cases. These different dates are admittedly beyond the aforesaid last extended time limit of 30.11.2002. In support of the said interpretation, the petitioners appear to be relying upon the provisions of Clause 10 of the first Resolution dated 20.12.1995 by alleging that the Government is bound to extend the validity period of TRC for the aggregate period of 4 years within which commercial activities in case of pipeline units would be commenced. For this purpose, the petitioners contended that in their case, TRC was issued on 10.10.2001 and counting a period of 4 years therefrom, the same would be upto 9.10.2005 whereas they had already commenced commercial activities....
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....en the petitioners have acted contrary to the provisions of Resolution dated 28.06.2000. The petitioners do not deserve any relief dehors the provisions of the resolutions, more particularly, as regards the fixed time limit. 116. Even otherwise, the petitioners are not entitled to incentive benefits in view of their having contravened the conditions on the basis whereof TRC was issued, which categorically provided that they should commence commercial activities during the existence of Scheme, more particularly, when the petitioners have admittedly started their commercial activities after 30.11.2002. 117. In light of the above factual background, rival contentions and the principles enunciated in the various authorities cited before the Court, the following propositions were emerged: For interpretation of the resolutions in question, one has to apply the very principles which are applicable in case of legislative provisions, wherein it is the cardinal principle that one should make a purposive interpretation and no part thereof should be construed in isolation or the resolutions in question should be criticized on the ground of loopholes, ambiguities, crudities and i....
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....ia Limited v. CCE 1994(73)ELT769(SC) and Liberty Oil Mills (P) Ltd. v. CCE 1995ECR417(SC) . 121. The petitioners have relied upon number of authorities inter-alia dealing with the following aspects: The State Government is bound by the doctrine of promissory estoppel in extending the benefit of exemption from entertainment tax inasmuch as the petitioners were relying upon the promise held out by the State in terms of relevant Government Resolutions which materially altered their position by making huge investment. 122. An act of God shall prejudice no man and nobody should be asked to perform an impossibility and that therefore the petitioners should have been granted relaxation and/or extension more particularly in view of the intervening incidents like earthquake, riots, etc. 123. Exemption granted by a notification cannot be altered by putting additional conditions by press-notes and trade notices. 124. The Court has considered the above aspects in earlier part of this judgment. Even otherwise, it is not permissible to pick up any stray observations from the judgment and to highlight the same as the ratio of the said judgment applicable to the facts of the p....
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....fied that the cases of petitioners of Special Civil Application No. 3371 of 2004, 13566 of 2004, 4319 of 2006, 11971 of 2006 and 15962 of 2006 are slightly on different footing. These petitioners have commenced their commercial activities during the lifetime of the Scheme. Their main dispute is with regard to the eligible amount of capital investment. The Court is not inclined to go into the factual details and veracity of their claims. These five matters are, therefore, remanded to the State authorities with a direction to decide afresh an issue of eligible capital investment made by them upto 30.11.2002, in accordance with the provisions contained in the Scheme and to issue the final eligibility certificate and raise the demand or grant refund, as the case may be, preferably, within six weeks from today. 130. In view of the above discussion, we are of the view that the respondent - State is not justified in considering the entire amount of the value of the ticket as the capital value for the purpose of setting off the eligible capital investment of the members of the petitioner Association. We are also of the view that the amount collected by the members of the petitioner Asso....