JUDGMENT

R.V. Raveendran, J.

1. The Appellants in these appeals are the lessees of plots allotted by the New Okhla Industrial Development Authority (for short 'the Authority' or 'NOIDA') for construction of 5 star, 4 star and 3 star hotels in Noida, District Gautam Budh Nagar, Uttar Pradesh. The said Authority was constituted under the provisions of the U.P. Industrial Area Development Act, 1976 ('Act' for short) for development of an Industrial and Urban Township of Noida in Uttar Pradesh, neighbouring Delhi.

2. Tourism was granted the status of an "industry" by the state government during 1997-98, by extending certain concessions and facilities available to industries. However as tourism, in particular hotel industry, had not received the required encouragement, the state government with the intention of attracting capital investment in tourism industry came up with a policy, as per its communication dated 22.5.2006 addressed to the Director General of Tourism, Uttar Pradesh. Relevant portions of the said policy are extracted below:

(1) Land should be earmarked for hotels by the concerned Development Authorities while preparing the Master Plan with the cooperation of the Tourism Department and such land should be provided for hotels. Where the Master-Plan stands finalized, the said procedure has to be followed in respect of surplus land. In regard to Development Authorities which have not finalised the Master Plan, steps may be taken for reserving land for hotels to the extent possible, near tourist spots/places of tourism with the assistance of the Tourism Department. Whenever the Master Plans of Authorities are revised, the land should be earmarked for hotels with the assistance of the Tourism Department. The lands earmarked will be kept reserved for tourism/hotels for five years from the date of publicizing the scheme. If no hotel entrepreneur comes forward in five years, the authority shall be free to alter its land use.

(2) If change in land use by the Authority is necessary for giving the earmarked plot to hotel industry, such change in land use shall be done by the Authority in accordance with the rules and the prescribed procedures on a 'case to case' basis by the competent authority.

(3)

&

(4) x x x x x

(5) Since Tourism including Hotels, has been given the status of Industry, in regard to hotels also plots shall be earmarked as in the case of industries, and shall be allotted at industrial rates as in the case of industrial plots. This policy shall be implemented in every district of the State.

(6) x x x x x

(7) They shall be given cent-percent rebate in Sukh Sadhan Tax for five years from the date of starting of new hotels. Other concessions shall be admissible as per industrial policy.

(8) The earmarked land for Hotel industry, shall be allotted only to Tourism entrepreneurs.

(10) Land shall be made available to hotel entrepreneurs by all Authorities including the Housing and Industrial Development Departments, at industrial rates. To ensure that hotel entrepreneurs may get the benefit of this provision, all the above Authorities shall ensure the necessary arrangements/amendment in their rules so that it may be possible to make available the land to hotel entrepreneurs on industrial rates.

(11) Only in areas where there are Authorities, the estimation of category wise requirement, determination of number of plots and star category wise determination of hotels will be made by the concerned Authorities. In other areas the Tourism Department shall assist in this exercise.

x x x x x

(15) After earmarking the land for hotels, applications will have to be invited for allotment to hotel/tourist entrepreneurs on industrial rates. The condition of eligibility for applicant shall be as follows:

x x x

(16) Where there is industrial lands, and more than one applicant, the Development Authorities shall allot the industrial land on the basis of suitability of the applicants, in accordance with the current procedure."

(Emphasis supplied)

3. At the