IMPORTANT POINTS
It is not correct to say that all clauses of the New Package Scheme of Incentives for Tourism Projects, 1995-2000 would cease to operate after end of the period of operation.
Applicability of the doctrine of promissory estoppel and its limitations elaborated and discussed.
Curtailment of the period and the opportunity available under Clause 10 of the Scheme by subsequent G.R. is bad and ineffective.

Headnote:(a) Gujarat Entertainment Tax Act, 1977 – Section 10 r/w New Package Scheme of Incentives for Tourism Projects, 1995-2000 – Provisional or temporary registration under clause 10(a) would be for two years – State Level Committee could grant extension for six month at a time to a maximum of two years – Thereafter an applicant could apply to State Government for further extension – As per clause 8 and 8(1) period of eligibility could go up to 10 years – Thus such stages and eventualities would survive even after the expiry of period of the operation of the Scheme – Although no fresh TRC could be issued after period of operation, units already having TRC could avail full benefits – Not correct to say that all clauses would cease to operate after end of the period of operation. (Para 16)
       (b) Promissory estoppel – Applicability of the doctrine and its limitations – Elaborated and discussed. (Para 18)
       (2004) 6 SCC 465; 1952 SCR 43; (1968) 2 SCR 366; (1979) 2 SCC 409; (1985) 4 SCC 369 – Relied upon
       (1981) 1 SCC 11 – Referred
       (c) Gujarat Entertainment Tax Act, 1977 – Section 10 r/w New Package Scheme of Incentives for Tourism Projects, 1995-2000 – Clause 10 and 8 – Promissory estoppel – State inviting capital investment of more than Rs. 90 Lakhs with a promise of incentives – Appellant making investment of Rs.1.11 crores – Scheme of 20.12.1995 forming the basis of statutory notification under Section 29 of Act, 1977 – Core components of the Scheme thus acquiring statutory status – Could be amended or varied only by another statutory notification – In absence of such action, G.R. dated 28.06.2000 could not detract from or dilute the effect of the Scheme – Held, appellants were entitled to have full benefit and advantage of Clause 10 of the Scheme – Curtailment of period and opportunity available under Clause 10 of the Scheme by subsequent G.R. – Bad and ineffective. (Para 17, 20, 21)
       (2014) 4 SCC 186 – Relied upon
       Facts of the case:
       On 20.12.1995 Government of Gujarat announced policy named “New Package Scheme of Incentives for Tourism Projects, 1995-2000” 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.
       The appellants being desirous of setting up a multiplex and avail the incentives under the Scheme took effective steps as stated in the Scheme and the Notification dated 14.02.1997 and applied for Temporary Registration Certification. Said application was examined by the concerned authorities and TRC was granted on 17.09.1999 and the same was sent to the appellants under covering letter dated 04.11.1999. In pursuance thereof the appellants started constructing the multiplex in accordance with the Scheme.
       On 28.06.2000 Government Resolution was issued by the State Government seeking to clarify incidental/ancillary aspects as regards treatment of certain cases covered under the Scheme. Clause A of the Resolution stated that an application for TRCs under the existing policy would be accepted till 31.07.2000 and TRCs would be issued provided initial effective steps were taken on or before 31.07.2000.
       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 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.
       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 appellants then requested for extension of six months instead of four months as was prayed earlier vide request dated 29.04.2002.
       On 20.06.2003 the Commissioner of Tourism informed that a proposal for amendment of GR dated 28.06.2000 was sent and the matter was being considered at the governmental level. It was stated that the eligibility as per TRC issued to the appellants was in force and that their project was still eligible. The appellants commenced commercial operations on 11.07.2003 and applied for grant of appropriate eligibility certificate on 04.11.2003.
       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
       The aforesaid order dated 20.07.2005 was challenged by the appellants by filing Special Civil Application No.18692 of 2005 in the High Court seeking declaration that period for starting commercial operation as envisaged in the Scheme stood extended upto 11.07.2003 and that the appellants were entitled to be issued eligibility certificate and to all incentives under the Scheme. The High Court rejected the submissions.
       Finding of the Court:
       Curtailment of period and opportunity available under Clause 10 of the Scheme by subsequent G.R. is bad and ineffective.
       Result: Appeals allowed.

JUDGMENT

Uday Umesh Lalit, J.

1. Civil Appeal 6478 of 1979 is directed against the judgment and order dated 26.06.2009 passed by the High Court of Gujarat at Ahmedabad in Special Civil Application No.18692 of 2005 to the extent it dismissed the challenge to the order passed by respondent no. 3 dated 20.07.2005 rejecting the application of the appellants for extension of time under Clause 10 of New Package Scheme of Incentives for Tourism Projects, 1995-2000. Similar challenge stands raised in other civil appeals against Orders rejecting their applications for extension of time. Since Civil Appeal No.6478 of 2009 was taken as the lead matter, facts relating thereto are dealt with in detail hereafter.

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.

3. Clauses 4.7 and 10 of the Scheme are quoted hereunder:-

“4.7 EFFECTIVE STEPS

The effective steps shall comprise

(a) initial effective steps which shall include:

i) Effective possession of land by an eligible unit free from all encumbrances.

ii) Registration in respect of company/Cooperative Society/Trust in respect of a partnership firm, evidence of execution of partnership deed and filling of requisite application with payment of necessary registration fees with the Registrar of Firms.

iii) Submission of project report specifically mentioning the category of tourism activity (coverage) and the incentive that are proposed to be availed of by the eligible unit with all relevant details.

iv) Copy of application duly acknowledged by all statutory and executive authorities from which permission is required.

(b) final effective steps shall mean and i

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2015 Supreme(SC) 497

Cases Referred (7)