2016 (5) TMI 1 - HC - Indian Laws

Seeking refund of excess privilege amount collected from the petitioner from the 2005-2006 to till date and collect the privilege fee applicable non-star status hotels in respect of the license - Petitioner had paid the privilege fee of ₹ 2,00,000/- for the year 2004-05 on 23.02.2005 - Held that - when the petitioner had established that they paid the privilege fee till the date of expiry of the three star license, on 07.03.2005, they are not liable to pay the privilege fee meant for Three Star Hotels from 2005-06. The petitioner s Hotel is liable to pay the fee applicable for regular Hotels. Inspite of the expiry of the license on 07.03.2005, the respondent collected privilege fee, which is applicable for the Three Star Hotels even after 07.03.2005. The 1st respondent, without taking into consideration the expiry of the Three Star license on 07.03.2005 and the letter dated 11.05.2005 by the Regional Director, India Tourism, has erroneously rejected the petitioner s representation for refund of the privilege fee collected after 07.03.2005. The petitioner is entitled to get refund of the excess amount paid by them from the year 2005-06 (i.e.) from 01.04.2005. - Petition disposed of

Issues:
1. Refund of excess privilege amount collected from the petitioner.
2. Applicability of privilege fee for non-star status hotels.
3. Rejection of petitioner's request for refund by the 1st respondent.

Analysis:

Issue 1: Refund of excess privilege amount collected from the petitioner
The petitioner, who operated a hotel with a Three Star status, applied for an FL-3 license and paid a higher privilege fee due to the Three Star classification. However, upon withdrawing the Three Star status, the petitioner was required to pay a reduced privilege fee applicable to non-star status hotels. Despite producing relevant documents, the 3rd respondent failed to refund the excess privilege amount paid by the petitioner. The court noted that the petitioner was entitled to a refund of the excess amount paid from 2005-06 onwards, as the Three Star license had expired on 07.03.2005. The impugned order rejecting the refund request was set aside, and the 3rd respondent was directed to refund the excess amount within eight weeks.

Issue 2: Applicability of privilege fee for non-star status hotels
Following the withdrawal of the Three Star status, the petitioner's hotel was no longer classified as such, and they were required to pay the privilege fee applicable to non-star status hotels. The petitioner contended that they had paid the privilege fee until the expiry of the Three Star license in 2005, and thereafter should have been charged the fee for regular hotels. The court agreed with this argument and directed the 3rd respondent to collect the privilege fee applicable for non-star status hotels from 01.04.2005 onwards for the petitioner's hotel.

Issue 3: Rejection of petitioner's request for refund by the 1st respondent
The 1st respondent had rejected the petitioner's request for a refund based on a previous court order, which was deemed erroneous by the court in this judgment. The court found that the rejection did not consider the expiration of the Three Star license and the subsequent change in classification. The petitioner had provided evidence to support their claim for a refund, which was not adequately considered by the 1st respondent. Consequently, the impugned order was set aside, and the 3rd respondent was directed to refund the excess privilege amount collected from the petitioner and to apply the appropriate privilege fee for non-star status hotels going forward.

In conclusion, the court ruled in favor of the petitioner, ordering the refund of excess privilege amount collected and the correct application of privilege fees for the petitioner's hotel from the relevant date.

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