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TMI Blog2009 (6) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Civil Application No. 18690 of 2005 For the Respondents : Kamal B. Trivedi, Adv. General and Sangeeta Vishan, AGP JUDGMENT K.A. Puj, J. 1. Since all these petitions and/or applications center round some of the common issues and since they were heard together, the same are being disposed off by this common judgment and order. 2. Special Civil Application No. 5391 of 2004 is filed by Multiplex Association of Gujarat for and on behalf of its 11 members challenging the Circulars dated 23.11.2000 and 05.12.2000 and seeking directions to the respondent authorities to consider only entertainment tax payable notionally as capital value for the purpose of setting off the eligible capital investment of its members. 3. Special Civil Application No. 3371 of 2004 is filed by M/s. Essem Entertainment Private Limited for treating its amount of eligible capital investment at Rs. 1400 Lacs in place of Rs. 735 Lacs as indicated in TRC with a prayer for interim relief to provisionally calculate notional tax at 45% of the amount paid by the spectators as admission charges. 4. Special Civil Application No. 13566 of 2004 is filed by M/s. Chaitanya Cine-World Private Limited for quashing and setting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate or order of extension, which leads to an order of exemption, the persons, whose cases were in pipeline and even those persons, who have successfully obtained certificates etc., would be liable to pay 50% of their collection. All these matters rested there and this interim order was considered to have an application only to the collection made till the said date and not to the subsequent collection made during the pendency of all these petitions. Be that as it may, in this factual background, all these matters are heard by the Court. For the sake of convenience, facts and submissions are taken from Special Civil Application No. 5391 of 2004. 10. The questions posed by the petitioner Association for consideration of this Court are as under: Whether the action on the part of the respondents in considering the entire amount of the value of the ticket as the capital value for the purpose of setting off the eligible capital investment of the members of the petitioner Association is arbitrary, discriminatory and violative of fundamental rights of the members of the petitioner Association guaranteed under Articles 14, 19 300A of the Constitution of India. Whether the action on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner Association? 11. Before these questions are considered, it is necessary to record brief facts of the case. The respondent State had published a policy declaring incentives to the entrepreneurs who may come forward to establish Tourism industry in the State of Gujarat, subject to the terms and conditions set out in the Resolution dated 20.12.1995 containing the details of the said Scheme known as New Package Scheme of Incentives for Tourism Projects - 1995-2000 . The Preamble of the said Resolution passed by the respondent State is relevant to the present purpose. It says that the State Government had declared New Tourism Policy - 1995 - wherein Tourism has been accorded the status of an industry with a view to make available all fiscal and non-fiscal incentives, benefits, reliefs and concessions available to the industries. Based on the New Tourism Policy and in order to give a boost to tourism sector by attracting higher investment in the areas with tourism potential and to generate employment opportunities, the State Government has introduced new package scheme of incentives for tourism projects for the period 1995-2000, scrapping the old incentive scheme of 1991 announce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Initially, the above Scheme was scheduled to be effective till 31.03.2000. However, the said period was extended from time to time and ultimately, the said period expired on 30.11.2000. Though the said Scheme is in force, the incentives made available under the said Scheme have been discontinued with effect from 30.11.2000 to the units which might have come into existence after that date. On the faith of the said policy containing incentives to the Tourism project, all the members of the petitioner Association have established entertainment complexes and each of them has (except City Pulse) invested more than Rs. 10 Crores towards cost of establishing such complexes. In all, more than 17 Multiplex Theaters have been established by the members of the petitioner Association and all of them are providing entertainment to the members of the public. Other Multiplex Theaters were being constructed in different parts of the State of Gujarat and total estimated investment in the form of cost of providing such entertainment complexes works out to about Rs. 300 Crores. Under the Scheme, the respondent State has provided for tax holiday (exemption from payment of entertainment tax) as define ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to understand that they will not be required to pay any tax for the period of 10 years or till their eligible capital investment was fully set off. This was on the faith of this solemn promise held out by the authorities in the Government that the members of the petitioner Association have invested Crores of Rupees in establishing their respective entertainment Complexes in and around the city of Ahmedabad and other parts of the State of Gujarat. 20. Mr. Nanavati further submitted that Under Secretary to the Government of Gujarat, Information and Broadcasting department, addressed a letter to the Entertainment Commissioner, Gujarat State, Gandhinagar on 23.11.2000 whereby he required the Entertainment Commissioner to mention in the certificate of exemption from payment of tax that the amount of tax is not included in the ticket charges and that the members of the public are not required to pay the amount of entertainment tax. The respondent State thereafter had published a Notification dated 05/07.12.2000 whereby it sought to withdraw the benefits already availed of by the members of the petitioner Association. Having come to know about this action of the respondent State, the off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of huge amount and in that case, he would not be able to exercise his right to settle in any part of the country. 22. It is further contended that if the entire amount of the value of the ticket is permitted to be appropriated by the respondent State towards capital value for the purpose of setting off the entire eligible capital investment, by notionally calculating the tax benefit as provided under the Scheme, instead of earning any profit, the concerned Member of the petitioner Association would be incurring losses of huge amount and in that case, he would not be able to carry out any occupation, trade or business. 23. It is further contended that the impugned action would result into deprivation of the right of the members of the petitioner Association to hold property save by authority of law enshrined under Article 300A of the Constitution of India. 24. It was also contended that it was never the intention of the respondent State in declaring the incentive policy contained in the Resolution. 25. It is further contended that by declaring the policy in question, the respondent State had held out a promise to the members of the petitioner Association and others that the enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment tax which would have been otherwise payable in specie by such Multiplex Theater owners on the amount of the value of the ticket which they might have received from the spectators. 28. Mr. Nanavati further contended that the direction contained in the Circular dated 23.11.2000 proceeds on a basic misconception that the exemption under the Scheme is made available for the benefit of the spectators and not the Multiplex Theater owners. As a matter of fact, on the conjoint reading of the relevant Clauses of the policy and the exemption notification, it is clear that the exemption is made only for the benefit of the Multiplex Theater owners who would be induced to invest Crores of Rupees towards cost of constructing Multiplex Cinema Theaters in view of the benefit made available to them under the Scheme. Even in the Preamble of the Scheme itself, it is made clear that the objective of the Scheme is to give a boost to Tourism sector by attracting higher investment in the areas with tourism potential. This objection is also supported by the fact that the amount of incentive is required to be computed with reference to the amount of investment made by the concerned Multiplex Theater o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haser has no liability to pay tax. There is no provision in the Act which gives any statutory power to collect sales tax as such from any class of buyers. If the dealer passes on his tax burden to his purchasers he can only do it by adding the tax in question to the price of the goods sold. In that event the price fixed for the goods including the tax payable becomes the valuable consideration given by the purchasers for the goods purchased by him. If that be so, the tax collected by the dealer from his purchasers becomes a part of the sale price fixed, as defined in Section 2(o) of the Act. Unless the price of an article is controlled, it is always open to the buyer and the seller to agree upon the price payable. While doing so, it is open to the dealer to include in the price the tax payable by him to the Government. If he does so, he cannot be said to be collecting the tax payable by him from his buyers. The levy and collection of tax is regulated by law and not by contract. So long as there is no law empowering the dealer to collect tax from his buyer or seller, there is no legal basis for saying that the dealer is entitled to collect the tax payable by him from his buyer or se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very edifice of the exemption spell out in the scheme. Therefore, the Tribunal was right in holding that since the assessee's sales were tax-free the provisions of Rule 50 of the Gujarat Sales Tax Rules, 1970 and Section 8A of the Central Sales Tax Act could not be invoked. 35. In Madras Rubber Factory Limited v. Union of India and Ors. 1981 E.L.T. 804 (Delhi), it is held that if the exemption notification does not contain a condition that its benefit should be passed on to the consumer, the manufacturer can retain the benefit of exemption notification. It is further held that the conditions for availment of exemption notification should be a part of that notification and cannot be altered by administrative directions, guidelines, press notes or trade notices. 36. In State of Jharkhand and Ors. v. Tata Cummins Limited and Anr. 2006 (145) STC 340, it is held that an exemption from payment of tax under an enactment is an exemption from the tax liability. Therefore, every such exemption notification has to be read strictly. However, when an assessee is promised tax exemption for setting up an industry in a backward area as a term of Industrial Policy, the implementing notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be irrelevant and what would be relevant is that the Theater can only charge ticket price per sale without any other taxation or duty component since there is no question of doing so. 39. Mr. Trivedi further contended that Section 3(1) of the Entertainment Act provides for levy and payment of tax to the State Government for every payment or admission to an entertainment. As per the Act, 45% tax is leviable for city/town/places having population less than 1 Lac and where the population exceeds 1 Lac, the tax levy is 50%. Sub-section (4) of Section 3(1) of the Entertainment Act mandates that unless provided for in the Act, every ticket, pass etc. shall state therein the amount of payment for admission and the amount of tax payable under Section 3(1). This being the statutory position and a requirement and the very fact that the Statute is not challenged in this petition, obviously, the components of price of tax have to be stated, but as in the present case, since exemption is granted as provided for under the Act, obviously it would constitute availment and thus, there could not be any other interpretation. It is further contended that Section 29 of the Entertainment Tax Act sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion/Circular under the Entertainment Tax Act and where for example, Rs. 100/- is charged for admission, then it has to be taken as a payment by an individual to the proprietor/owners of the Multiplex Theater as payment for admission excluding tax. 41. Mr. Trivedi further contended that the members of the petitioner Association were given to understand the mode and manner which was also made known to the public. The petition is, therefore, not maintainable and the issue framed does not take the petitioner anywhere and the petitioner cannot take shelter of anything and unjustly enrich themselves etc. There cannot be any estoppel against law and it is also contended that there is no question of linking of the investment made to the mode and manner of enjoyment of exemption. So far as content of the exemption is concerned, it is not effected in any manner whatsoever and the State has not reduced or curtailed the content of exemption to be enjoyed. It is, therefore, contended that there is no violation of any right much less fundamental right of the petitioner and hence the petition deserves to be dismissed. 42. Mr. Trivedi further referred to the affidavit-in-reply filed on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of admission to entertainment is of Rs. 200, less 50% of tax as per Section 3(1), chargeable amount remains Rs. 100. It is, therefore, contended that if the payment for admission is Rs. 200/- less 50% of tax is deducted, the net chargeable amount comes to Rs. 100/- which is not collected by virtue of the provisions of the Act, Tourism Policy 1995-2000 and notification. 45. Mr. Trivedi, therefore, contended that the owners of the Multiplex can only charge what is permissible under the Act towards payment for admission to entertainment and if tax amount is exempted by virtue of the notification, the owner shall not be eligible to levy or collect or charge the tax amount. By exemption from payment of entertainment tax, the spectators directly get the benefit of tax exemption and likewise the owners of the entertainment unit get the benefit of more spectators because more people will be attracted towards the entertainment unit because of the tax exemption. It is further contended that under Section 29 of the Act, any entertainment or any class of entertainment can be wholly or partly exempted from the payment of tax. Thus, only tax exemption for a particular period has been given and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entertainment Units will have to strictly adhere to the conditions mentioned in the notification and once having accepted the terms and conditions of the said notification, for the purpose of availing of the tax exemption, they cannot now back out under the guise that what the entertainment units are charging towards entertainment tax cannot be recovered by the State Government. Any breach of any condition or non-compliance of any of the provisions of the Statute, Notifications and Circulars would result in termination of exemption granted. It is further contended that the petitioner Association cannot misread the conditions of the Resolutions to suite their convenience and unjustly enrich its alleged members under the guise of tax exemption. There cannot be any estoppel against law and there is no question of linking of the investment made to the mode and manner of assessment and calculation of exemption. The members of the petitioner Association are avoiding tax liability which they are even otherwise liable to pay since their Units have already reached the limit of tax holiday. 49. Mr. Trivedi, therefore, contended that on proper interpretation of Clause 8 of the Policy 1995-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment complexes under the Tourism Policy. The object behind the said incentive Policy is to encourage investments in the Tourism sector. As a matter of fact, the Preamble of the Scheme itself declares that the objective of the Scheme is to give a boost to Tourism sector by attracting higher investments in the areas with Tourism potential. Furthermore, the quantum of exemption is linked to the investment made which also indicates the object of the Policy which is to benefit the investor. The impugned Circular proceeds on the incorrect assumption that the tax exemptions should go directly to the spectators. The impugned Circulars are, therefore, illegal and ultra vires since it runs against the object of the Policy and, therefore, deserves to be quashed and set aside. It is further contended that even otherwise the controversy in the present petition is limited to the interpretation of Section 3(a) which inter alia provides for tax for admission to an entertainment complex. The said Section has been interpreted to mean that the liability to take entertainment duty is that of the proprietor which would mean that whatever amount the proprietor collects by way of admission will have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared Policy. None of the conditions of the said Scheme dated 20.12.1995 have been breached by the members of the petitioner Association. It is, therefore, not open for the respondent authorities to deny the benefit of the Scheme by relying upon the Circulars issued subsequent to the declared Policy. When a concession of a benefit or an exemption in the nature of tax holiday is granted on fulfillment of certain conditions and such conditions are fulfilled by the party, to whom such benefit or concession or exemption is given, such person cannot be denied such benefit or concession or exemption merely on the basis of Circulars issued subsequent to the said Policy. The respondent authorities are trying to wriggle out from the promises made to the investment based upon which Crores of Rupees are invested by the members of the petitioner Association. The impugned Circulars cannot overreach the basic object and spirit of the Scheme. The objective of the Scheme as stated above is to provide tax holiday for a period of 5 to 10 years depending upon the type of unit. The internal instructions in the form of the impugned Circulars which has the effect of taking away the benefit granted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be admitted to entertainment in any multiplex unit, purchases a ticket, which may be issued to him on payment of the admission charges + entertainment tax + surcharge, if any. Out of the amount so collected, a portion thereof representing the admission charges is retained by the owner, whereas the remaining amount collected by way of entertainment tax, has to be paid over to the State Government by the Multiplex unit. Thus, for all practical purposes, the entertainment tax is just like excise/customs duty payment which is in the nature of indirect taxation in as much as the burden thereof is taken care of by the viewer and not by the Multiplex unit owner. If the multiplex unit wants to charge Rs. 120 as admission charges, he will also charge equal amount i.e. Rs. 120 by way of entertainment tax, so that out of the sum total thereof, i.e. Rs. 240/-, he can pass on 50% entertainment tax i.e. Rs. 120/- to the State Government and the remaining amount may remain with him. In other words, when the rate of tax is 50% of gross amount, equal amount of Rs. 120/- has got to be notionally added to the basic net ticket rate of Rs. 120/- and it is that notional tax component of Rs. 120/- wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : - Rs.0.00 Surcharge : - Rs.0.00 Total Rs.120 59. This information suggests that a multiplex unit is not recovering any amount by way of entertainment tax and carries for himself only net rate of Rs. 120/- towards admission charges. If the exemption from entertainment tax had not been made available to him, he would have charged another Rs. 120/- to the viewers by way of entertainment tax so that it becomes 50% of the total amount of Rs. 240/- and therefore, when such a multiplex unit is operating under incentive Scheme in question, it is required to adjust an amount of Rs. 120/- per ticket against its accumulated eligible capital investment. It does not lie in the mouth of the petitioner to say that one should count 50% of Rs. 120/- i.e. Rs. 60/- for adjusting the same against the said eligible capital investment. 60. This was also explained to the Court by production of a copy of Form No. 3 i.e. return filed by the said members of the petitioner Association under the provisions of the Act for the period from 01.04.2005 to 07.04.2005 to the prescribed Officer and Mamlatdar in respect of various details including the amount of admission charges recovered (as shown in Column No. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 4 is filed on 23.9.2008. Based on this affidavit, Mr. Nanavati submitted that Section 3 of the Bombay Entertainment Duty Act, 1923 which is pari materia with Section 3 of the Entertainment Tax Act has been interpreted by the Hon'ble Supreme Court in the case of Liberty Talkies reported in [1971]3SCR398 . In that case, the Hon'ble Supreme Court has held that the liability for payment of duty under the Act is imposed upon the proprietor and not upon the visitors to the Theater. The proprietor does not act as agent of the Government for the collection of the duty. The entertainment duty is a payment which the proprietor is required to make as a condition for enabling visitors to attend or continue to attend the entertainment. The plain reading of Section 3 Sub-section 1, which is a charging Section of the Gujarat Entertainment Tax Act would make it clear that the tax is to be levied and paid to the State Government on every payment for admission to an entertainment. Payment of admission has been defined under Section 2(g)(ii) of the Act to mean any payment made by a person for seat or other accommodation in a place of entertainment. 64. In view of this provision, Mr. Nanava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment areas with tourism potential and to generate employment opportunities, the State Government had introduced the new package Scheme of incentive for Tourism Projects. Clause 8 of the Policy envisages a tax holiday ranging from 5 to 10 years upto 100% capital investment. The entire policy envisages benefit of tax exemption going to the investor. As a matter of fact, even as per the provisions of the Act, since the tax is the payment, which the proprietor is required to make as a condition for enabling viewers to attend or continue to attend the entertainment, the exemption from payment of tax would necessarily be available to the owner of Multiplex. 66. Mr. Nanavati further contended that the exemption notification i.e. the policy of the State Government is clear and unambiguous. The policy envisages grant of benefit to an investor. The provisions of the Act make it clear that the payment of entertainment tax is on the entrepreneur. The impugned Circulars are contrary to the provisions of the exemption notification and are traveling beyond and counter to the exemption, thereby restricting the scope of exemption. This is not permissible under the law. The exemption notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is calculated on the gross receipt i.e. if a unit who has exhausted its limit, is charging Rs. 100/- as entrance fee, and if the rate of tax is 50%, the authorities are assessing only Rs. 50/- as entertainment tax. Moreover, in so far as the Multiplex Theaters which are admittedly not enjoying any benefit of the exemption notification, are also charging Rs. 100/- and the tax assessed and paid is only on the gross receipt i.e. if the tax rate is 20%, the tax assessed on Rs. 100/- is Rs. 20/- i.e. net Rs. 80/-, entertainment tax Rs. 20/- - admission Rs. 100/-. Moreover, factually also, on an average ticket price of Rs. 60/- (i.e. Rs. 40 - 60 - 80, total Rs. 180/- divided by 3 = Rs. 60), total average expenses per ticket comes to Rs. 75/- in so far as one of the members i.e. Devi Multiplex is concerned. Similarly, in so far as one another member, M/s. Wide Angle Multiplex is concerned, on an average ticket price of Rs. 108/-, the said member is required to spend an amount of Rs. 105/- per ticket. If the argument canvassed by the State is accepted, then a Multiplex owner all of whom are working on the similar pattern will necessarily have to pay an equal amount out of their pocket or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the later enactment cannot be pressed in service. 71. Mr. Trivedi further contended that with effect from 01.10.2005, there took place amendment in Section 2(g) dealing with the aspect relating to 'payment for admission' wherein instead of the words 'payment involving tax' came to be changed to read as 'payment without tax'. In view of this, the earlier method of notionally considering the amount of admission charges as equivalent to tax for the purpose of adjustment thereof against the eligible capital investment, came to be changed. In view of this, w.e.f. 01.10.2005, the practice being followed is counting the rate of 50% of the net amount mentioned in the ticket, which percentage came to be further reduced to 25% with effect from 01.04.2006. In other words, prior to 01.10.2005, there was notional calculation of tax component for adjusting the same against the eligible capital investment (i.e. 45% or 50% of the gross amount mentioned in the ticket) which came to be given a go-bye with effect from 01.10.2005, introducing the method of counting fixed percentage of net amount mentioned in the ticket. In this view of the matter, it is contended that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessable value for determination of the tax liability is the payment received, irrespective of the break up of this amount, charged for admission to entertainment and tax payable thereon. 75. The entertainment tax being a taxing measure, and Section 3 being a charging section, it has to be strictly construed and, therefore, liability to pay tax cannot be enlarged beyond what is provided in the Act. 76. The multiplex cinemas in the ticket issued show that nothing is received in the name of or on account of entertainment tax from the viewers. Therefore, in case of multiplex cinemas, the amount would be taxed under Section 3. In the tickets issued, payment of admission is shown as admission to entertainment, tax is shown as 0 , service charges shown as 0 and total amount recoverable by and payable to the proprietor is Rs. 100/-. Tax liability has to be, therefore, calculated on this amount i.e. Rs. 100/- which would be at 50% payment for admission received from the viewers. 77. Under the incentive, there is no special method of calculation of the tax liability prescribed as a condition of exemption for the purpose of setting off such tax liability against the incentive limit. This me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross amount for incentive of tax is not contemplated by exemption notification or by provisions of the Act. What needs to be noted is that (i) there is no statutorily fixed price for entertainment and, therefore, the question of deducting a component of tax from such statutorily fixed standard rate of admission which would show that the benefit is passed on to the viewers does not arise (ii) All the multiplex cinemas have gone into commercial operation only after the incentive scheme was declared and claiming benefit of the incentives. Therefore, there is no benchmark of earlier price for granting admission to entertainment available for comparison with which it could be shown that benefit of exemption is not retained and is passed on to the viewers by reducing the rate of admission, (iii) the right for admission entirely depends on what price the buyer or spectator is prepared to offer for seeking admission to the entertainment and the market forces. In absence of such a yardstick when the proprietor declares that nothing is received as entertainment tax, that is sufficient with the condition of exemption notification. The Circulars which mandate the petitioner to take notional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en considered and all the applications for extension of time have been rejected by the Commissioner of Tourism by taking into account extraneous factors not relevant for the purpose. 85. Mr. Nanavati further submitted that the ground that sufficient time extension has already been given is factually incorrect since in none of the 13 cases, except 2, i.e. Devi Multiplex and City Plus Fun World Pvt. Ltd., extension of time beyond the initial period of Temporary Registration Certificate (TRC for short) is given. In any event, the competent authority for grant of extension of time under the said Scheme is admittedly State Level Committee which after examining individual cases and after considering the fact that there was a justifiable reason in completing the projects, due to earthquake and communal riots, recommended extension of time in its meetings held on 4.4.2002, 21.09.2002 and 19.02.2003. As a matter of fact, in its meeting held on 19.02.2003, the State Level Committee recorded that in the matter of considering extension of validity period to pipeline cases, Principal Secretary, Industries Mines Department informed the Committee that the Government is in process of taking decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the petitioners. The petitioners continue to make representations/applications to the authorities for extension of time to complete the projects, mainly delayed due to the earthquake which took place in the State of Gujarat on 26.01.2001 and communal riots took place on 28.02.2002. The said applications/representations were not rejected and as a matter of fact, were stated to be under consideration. All the petitioners, therefore, continued to make substantial investments in anticipation of the grant of extension and completed their projects and commenced commercial operations. This is relevant more particularly in view of the fact that the State Level Committee, which is the competent authority under the said Scheme in its meetings held on 04.04.2002, 21.09.2002 and 19.02.2003, in terms recommended extension of time after considering the physical progress of individual projects and considering the fact that the delay occurred due to earthquake and communal riots. Since the said recommendations were made admittedly, after 28.06.2000, the competent authority i.e. SLC was aware about the same despite which it recommended extension of time. This clearly establishes the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermics Hydropower Ltd. v. State of Kerala and Ors. 2003 (3) SCC 716, (3) Mohammed Gazi v. State of M.P. and Ors. 2000 (4) SCC 342, (4) Bareilly Development Authority v. Methodist Church of India 1988(35)ELT241(SC) , (5) Rajkumar Dey and Ors. v. Tarapada Dey and Ors. [1988]1SCR118 , (6) S.C.A. No. 24233 of 2007 Essar Oil Limited v. State of Gujarat and Ors. decided on 22.04.2008, (7) Express Hotels v. State of Gujarat and Ors. Special Civil Application No. 4977 of 2006 decided on 18.10.2007 and (8) Rolcom Engg. Co. Ltd. v. State of Gujarat and Ors. Special Civil Application No. 2033 of 2004 decided on 2.3.2006. 93. Mr. Nanavati further contended that out of the 13 purported pipeline cases, according to the petitioners, 9 multiplexes do not fall into the category of pipeline cases and, therefore, the time schedule stipulated in the Circular dated 28.06.2000 is not applicable to them. The Government had in mind two kinds of cases (i) cases where temporary registration certificates have been issued and (ii) cases where temporary registration certificates that will be issued. Clause (B) applies only to units to whom TRCs have already been issued before 28.06.2000. Sub-clause 2 of Clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inspection of projects and report to the Government for decision. If the Director of Tourism is satisfied that the steps to implement the projects are adequate, he shall inform the Government. Upon such report, the State Government is empowered to take a decision to either extend or reject the registration depending upon the merits of the case. 95. Mr. Nanavati further submitted that the respondent authorities have tried to whittle out from the assurance and the promises given to the petitioners by denying them the incentives which are legally available to them under the Scheme. As a matter of fact, the State Level Committee, in its meetings held on 04.04.2002, 21.09.2002 and 19.02.2003 did take a decision of granting extension of time. Inspite of the said decision of the State Level Committee, which is empowered and authorized to grant extension, the Commissioner of Tourism passed the impugned order dated 20.07.2005 rejecting the application for extension of time. The decision of the Commissioner of Tourism is taken on the extraneous grounds and is without authority of law. When an assessee is promised with a tax exemption for setting up an industry or a tourism project, as a ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the purpose or providing that no further extension would be available, would be invalid on the doctrine of the promissory estoppel as well as unreasonable, irrational and unconstitutional. In any event, the competent authority has granted extension beyond 28.07.2002 and therefore, it is permissible for the respondent to rely upon the said resolution. 97. Mr. Nanavati further submitted that pursuant to the direction of this Court, the State Government has produced on record letter dated 24.09.2002 issued by the Commissioner of Tourism to the Principal Secretary, Industries Mines Department. The said letter dated 24.09.2002 in terms recognizes the need for extension of time in view of earthquake and communal riots and recommends amendment in Government Resolution dated 28.06.2000. Along with the said letter, the Government has also produced on record a letter dated 20.07.2005 of Under Secretary, Industries Mines Department addressed to the Commissioner of Tourism. From reading the said letter dated 20.07.2005, it appears that the Government's decision is not to extend the Scheme. When there is extension of the Scheme, the question of extending the period of completion of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The action of the State Government of neither exercising the powers under Clause 10 of the Scheme nor extending the Policy only for the Multiplex Theaters is discriminatory and requires to be interfered with by this Court by issuing appropriate directions to that effect. 99. Based on the above facts and settled legal position, Mr. Nanavati strongly urged that the decision of the State Government of not granting extension of time for commencement of commercial activities is absolutely unjust, improper, illegal and deserves to be quashed and set aside. 100. Mr. Kamal Trivedi, learned Advocate General appeared in all these petitions. An affidavit-in-reply is filed in almost all petitions. He strongly opposed to the issuance of any direction to the State Government for extension of time in relation to commencement of commercial activities. He submitted that vide Resolution dated 20.12.1995, a Tourism Policy called New Package Scheme of Incentives for Tourism Projects, 1995-2000 came to be introduced by clearly specifying that its period of operation will start from 01.08.1995 to 31.07.2000. Under the said Policy, eligible Multiplex Units were entitled to incentive of exemption from pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculation of entertainment tax in relation to exempted units. These aspects are already discussed in earlier part of this judgment. 106. As such, the policy decision taken vide the second Resolution dated 28.06.2000 is distinct and independent of the earlier policy decision taken vide first Resolution dated 28.12.1995. The reference of the said earlier policy decision mentioned in the Resolution dated 28.06.2000 is only with a view to identifying the available incentive benefits. In that view of the matter, the petitioners are not entitled to any relief for extension of the period for commencement of the commercial activities for the period of four years from the date of issuance of TRC, i.e. upto 09.10.2005 and/or any date beyond 30.11.2002. 107. Having considered these rival submissions, the Court is of the view that combined reading of the first Government Resolution dated 20.12.1995 along with second resolution dated 28.06.2000 together with last resolution dated 30.09.2000 clearly suggests that the operative period of the Policy in question came to be finally over on 30.11.2000 and the time limit for completing the project and commencing the commercial activities in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime limit for the availability of specified incentive benefits under the said Policy upto a particular point of time, but the same is also likely to create serious consequences, where the time limit for the operation of the Policy would be different in each of the cases, which was never intended by the State Government. This apart, it is not permissible to the petitioners to just rely upon the subsequent resolution dated 28.06.2000 for being treated as pipeline cases and then to rely upon Clause 10 of the first resolution dated 20.12.1995 for the purpose of larger extension, without appreciating that resolution dated 28.06.2000 prohibited any further extension or relaxation in the commencement of the commercial operation beyond the expiry date of the Scheme. In none of the pipeline cases, any of the petitioners is entitled to exemption from entertainment tax. 112. All the petitioners were well aware that they were supposed to commence the commercial activities prior to the deadline fixed by the last resolution dated 28.06.2000 i.e. by 31.07.2002 in such a way that they could have applied for Eligibility Certificate immediately thereafter for availing of the incentive benefits as st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC) , Promoters Builders Association v. Pune Municipal Corporation (2007)6SCC143 . 118. The State Government should not be directed to continue and/or adopt a particular policy since such aspects may not be judicially reviewable. If a policy announced on 20.12.1995 is varied by another policy decision taken on 28.06.2000, whereafter certain clarifications are announced by virtue of the Circular dated 05.12.2000, no fault can be found with the State Government, even if it has faltered in its wisdom or there may be better and wiser policy to be adopted and that there should be greater freedom of play in such joints in matters so long as the same is fair and free from taint of mala fides and violation of constitutional guarantees. Reliance is placed on the decision of Balco Employees Union v. Union of India (2002)ILLJ550SC . 119. There is no question of application of the principles of promissory estoppel to the instant case inasmuch as this is not a case where the State Government having announced the grant of certain incentive benefits for a specified period, has all of a sudden withdrawn the said benefits before the expiry of the said period to the detriment of those who had altere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are not to be read as Euclid's theorems nor as provisions of the statute. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. Even a single significant detail may alter the entire aspect. 125. In S. Gopal Reddy v. State of Andhra Pradesh 1996CriLJ3237 , it is held that it is a well-known Rule of interpretation of statutes that the tax and the context of the entire Act must be looked into while interpreting any of the expression used in a Statute. The Courts must look to the object which the statute seeks to achieve while interpreting any of the provisions of the Act. A purposive approach for interpreting the Act is necessary. 126. In Promoters Builders Association of Pune v. Pune Municipal Corporation and Ors. (2007)6SCC143 , it is held that it is a cardinal principle of construction of statute that when the language of statute is plain and unambiguous, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment under the Scheme. The entire amount of the value of the ticket cannot be considered as the capital value for the purpose of setting off the eligible capital investment. We are also of the view that the members who have not commenced their project within the stipulated time limit i.e. on or before 30.11.2002 as envisaged under the subsequent Resolution dated 28.06.2000 by virtue of which those cases have been considered as pipeline cases are not entitled to the benefit under the Scheme and there is no infirmity in the order passed by the respondent authorities while rejecting their representation for extension of time. We are also of the view that the members who are entitled to the benefit of the Scheme are entitled to claim only the amount of capital investment made by them within the stipulated time limit i.e. 30.11.2002. If any expenditure incurred by them subsequent to this time limit or investment made by them in such eligible project after 30.11.2002 cannot be considered as an eligible investment. The respondent authorities are, therefore, directed to give effect to this judgment and order and decide each case as per the directions issued here in this judgment and raise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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