Devi Multiplex & Anr vs State Of Gujarat & Ors

2. On 20.12.1995 Government of Gujarat announced policy named “New Package Scheme of Incentives for Tourism Projects, 1995-2000” (hereafter referred to as the Scheme) with a view to make available all fiscal and non fiscal incentives, reliefs and concessions enjoyed by industries to ‘Tourism’ which was accorded the status of an industry, in order to give a boost to tourism sector by attracting higher investment in the areas with tourism potential and to generate employment opportunities. Under Clause 2, the Scheme came into operation on 1.8.1995 and was to remain in force for a period of five years upto 31.07.2000. Under Clause 3, to be eligible, a new tourism unit ought to be registered after 1.8.1995. Clause 4.7 dealt with effective steps which such unit was expected to undertake. Under Clause 5, after taking initial effective steps a tourism unit could apply to the Director of Tourism for registration. All projects had to conform to the specifications and requirements spelt out in Appendix B which Appendix dealt with various categories of tourism units and Item 22 thereof pertained to Entertainment Complexes including multi cinema theater complexes or multiplexes. Clause 7 categorised tourism units in four categories, namely, Prestigious Tourism Units, Large Scale Tourism Units, Small Scale Tourism Units and Tiny Tourism Units with minimum fixed capital investment of Rs. 10 Crore, 90 lakhs, 10 lakhs and less than 10 lakhs respectively. Clause 8 dealt with incentives and stated that a tax holiday of 5-10 years would be available in respect of exemptions from (i) Sales Tax (ii) Turnover Tax (iii) Electricity Duty (iv) Luxury Tax and (v) Entertainment Tax, upto 100% of capital investment. In clause 8.1 it was stated that the quantum of incentives would not exceed 100% of eligible capital investment and it further stated the period of eligibility in respect of Prestigious Tourism Unites, Large Scale Tourism Units, Small Scale Tourism Units and Tiny Tourism Units to be 10 years, 8 years, 6 years and 5 years respectively. Clause 9 dealt with composition of sanctioning authority whereunder State Level Committee was competent to issue eligibility certificate in respect of Prestigious and Large Units while District Level Committee was to issue eligibility certificate for all Small Scale and Tiny Tourism Units. The procedure for registration tourism units for incentives was detailed in Clause 10.

“4.7 EFFECTIVE STEPS The effective steps shall comprise

The approval was accorded by the Municipal Corporation in October 2001 and the appellants resumed construction work. Since more than a year was lost because of subsequent changes in building norms, the appellants applied on 11.12.2001 for grant of extension for completing the project pointing out the aforesaid difficulties. It was stated that as on the date, the appellants had incurred expenditure to the tune of Rs.91.25 lakhs for which a certificate of the Chartered Accountant was enclosed. Photographs of the completed civil works were also enclosed.

8. Around 26.02.2002 large scale communal riots took place in the State and Naroda (where the project of the appellant is located) was one of the worst affected areas. Normal civil life was disrupted for a considerable time, the labour force had left the site and accordingly, as per the appellants, no construction could take place for more than four months. On 04.04.2002 in its 12th meeting, State Level Committee considered the application dated 11.12.2001 preferred by the appellants. It clarified that the date of TRC in case of the appellants shall be 4.11.1999. Keeping in view the delay in continuation of operation due to earthquake and so also the progress made by the appellants, the Committee granted extension in validity period of TRC by six months which decision was communicated on 15.04.2002. The appellant wrote on 24.02.2002 stating that though the extension was granted by the State Level Committee, the appellants could effectively get only 17 days out of the extension of six months. The appellants informed that the civil work was complete and the electrification and air-conditioning work was in progress. It was further stated that as on that date Rs.1.11 crores were spent on various items of capital work, as supported by certificate from the Chartered Accountant and prayed for further extension of four months. By subsequent letter dated 19.08.2002 it was stated that the civil work and the electrification was complete and the ducting and air-conditioning work was on the verge of completion. The status of investment as on that date was said to be more than Rs.3.21 crores, as supported by the certificate from the Chartered Accountant. The appellants then requested for extension of six months instead of four months as was prayed earlier vide request dated 29.04.2002.

11. In June 2004 Multiplex Association of Gujarat filed Special Civil Application No.5574 of 2004 on behalf of its members in the High Court seeking appropriate directions for grant of eligibility certificate to its members. The High Court by its order dated 22.06.2004 directed the State Government to decide the applications/representations for extension of time. Thereafter, on 22.07.2004 the Commissioner of Tourism issued a show cause notice calling upon the appellants why their application dated 04.11.2003 for grant of eligibility certificate should not be rejected. Relying on the GR dated 28.06.2000, it was stated that the project was not completed by 31.07.2002 and as such the appellants did not qualify for the benefit of the Scheme dated 20.12.1995. The show cause notice was replied by the appellants. On 20.07.2005 the application for grant of eligibility certificate was rejected stating the following reasons:

23. In the circumstances, we allow the appeal and set aside the decision of the High Court in so far as it held that the operative period of the Scheme came to an end on 30.11.2000 and that there could be no further extension of time limit. Since the appellants have already commenced commercial operations, it now needs to be assessed by the State Level Committee whether in the facts of the case the appellants could justifiably have claimed extension under Clause 10 of the Scheme. We direct the State Level Committee to make such assessment in accordance with Clause 10, in three months of the receipt of this decision. Needless to say, if such assessment is found in favour of the appellants, they shall be entitled to the incentives and benefits under the Scheme.

24. All the connected matters raise identical issues and challenge rejection of their applications for extension of time. In each case the Order passed by the concerned authority is similarly worded and passed on 20.07.2005, i.e. the same date. These connected appeals are also allowed with similar direction.

25. The appeals stand allowed in terms as stated above. No order as to costs.