Point of Law: Arbitrary State - State is bound to act fairly, in a transparent manner in its action. This is an elementary requirement of the guarantee against arbitrary state action which Article 14 of the Constitution adopts.

ORDER :

Simply put the petitioner’s grievance is that it had acted upon the promise extended by the respondents State Government under the Rules in force at the time and changed its position. The respondents though performed some of the obligations, but later on refused to honour their commitments under the Rules giving cause of action to the petitioner to file this petition, seeking implementation of the Rules vis-a-vis benefits to be given to the petitioner under them.

2. Facts:-

2(i) Tourism was declared an industry in Himachal Pradesh on 05.12.1984. Three sets of rules providing incentives to tourism industry in H.P. came into play viz:- (i) H.P. Grant of Incentives to the Tourism Industry Rules, 1984;(ii) H.P. Grant of Incentives to Paying Guest House Scheme, 1988 and (iii) H.P. Grant of Incentives to Dhaba Scheme, 1988. On 26.07.1993 in supersession of above Rules, the respondents notified new Rules for Grant of Incentives to Tourism Industry in H.P. (in short the 1993 Rules).

2(ii) The 1993 Rules came into force w.e.f. 01.08.1993. All new approved tourism units as defined under the rules, which had commenced operations within a period of ten years from the appointed day i.e. from 01.08.1993 up to 01.08.2003 were eligible for grant of incentives mentioned therein. The eligibility clause of the Rules runs as under: -

“1.2 Eligibility:

(a) All the approved tourism units as defined under these Rules shall be eligible for grant of incentives.

(d) These incentives will be available only to those New Tourism Units which commence operations within the period from the appointed day up to 01.03.2003 (i.e. for 10 years) provided that this condition will not be applicable for incentives under Rules 17 and 22.

2.1 Under these rules unless the context otherwise requires: -

2.1(w) “Tourism Unit” means commercial establishment in Himachal Pradesh providing facilities/services to the tourists and will include the following: 1 to 7. ……………..

(8) Ropeways.”

Rule 1.2(a) was not to be made applicable for incentives available under Rules 17 to 22. Rule 17 with the Heading “Publicity Assistance” aims to encourage participation of tourism units, tour operators & travel agents in publicity of State and for that purpose grants subsidies. Rule 18 provides incentives for tiny tourism units. Tiny tourism unit, as per Rule 2.1 (t) means a small scale tourism unit having fixed capital investment of Rs.10,00,000/- or less. Ropeways is included in the list of tourism units under definition clause 2.1(w)(8). Several incentives have been made available to the tourism units in form of subsidies, concessions and exemptions under the 1993 Rules.

2(iii) It is the case of the petitioner that in view of the incentives granted by the State under the 1993 Rules, it established a ropeway unit, in the name of ‘Ganpati Ropeways’ at Sh.Naina Devi Ji, District Bilaspur, H.P.. For the purpose of grant of incentives, this area fell under Category ‘A’ of the Rules. ‘Ropeways’ has been included in list of ‘Priority Tourism Projects’ in Annexure-II of the Rules and as such is entitled to incentives under Rule 16 of the Rules. Petitioner’s ropeways unit became operational in August, 1997.

2(iv) Petitioner claimed and was granted several incentives under the Rules by the respondent-Department, however, after sometime, the grant of incentives/payments become irregular and later on stopped altogether. It is in this context, the petitioner filed this writ petition in the year 2010 for grant of following substantive reliefs: -

“(a) Quash Annexure P-L i.e Communication bearing No.7- 31/93-TS-II-8462, dated 11.11.2009, issued by Respondent No.2 to the Petitioner with consequential relief in favour of the Petitioner Company.

(b) Direct the respondents No.1 and 2 to release the arears of Interest Subsidy, Electricity Duty Paid Subsidy, Advertisement and publicity Expenses Subsidy, Reimbursement/ Subsidy qua the Diesel Generating Set Purchased and Installed by the Petitioner and the Subsidy/ Reimbu