GHT.91.45 MNR 1391 285 E, dated the 24th December, 1991 the Government of Gujarat hereby exempt wholly the tax on the entertainment which fulfils the criteria laid down in Appendix B of the said resolution hereinafter referred to as the eligible entertainment during the eligible period or upto the period of expiry of the limits of incentives, whichever is earlier, to the extent referred to in para 8.1 of the said resolution Paragraph 17 of the Notification stated that the exemption under said Notification would be subject to all terms and companyditions referred to in Government Resolution dated 20.12.1995 in the Scheme and further companyditions stipulated in the Notification.
In clause 8.1 it was stated that the quantum of incentives would number 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.
The present appeal by Special Leave seeks to challenge the view so taken by the High Court.
Clause B of the said Resolution was as under ADHOC FINAL ELIGIBILITY ERTIFICATE All the units to whom TRC has already been issued under the guidelines of Tourism Policy 1995 2000, shall apply for the Eligibility certificate within 180 days from the date of companymencement of companymercial activities.
On 26.01.2001 a massive earthquake took place in the State resulting in companylapse of number of buildings and structures.
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.
Clause 9 dealt with companyposition of sanctioning authority whereunder State Level Committee was companypetent 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.
All projects had to companyform 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 companyplexes or multiplexes.
On 27.03.2001 it was directed by the State Government that all development permissions must adhere to structural safety numberms as stated in annexure to said order dated 27.03.2001 and that even with respect to the existing development permissions, necessary certification regarding structural stability and strengthening ought to be issued by Structural Engineers having requisite qualifications.
The appellants submitted building plans along with the requisite structural stability certificate.
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 companysidered at the governmental level.
The appellant wrote on 24.02.2002 stating that though the extension was granted by the State Level Committee, the appellants companyld effectively get only 17 days out of the extension of six months.
It clarified that the date of TRC in case of the appellants shall be 4.11.1999.
It was stated that the eligibility as per TRC issued to the appellants was in force and that their project was still eligible.
Thereafter, on 22.07.2004 the Commissioner of Tourism issued a show cause numberice calling upon the appellants why their application dated 04.11.2003 for grant of eligibility certificate should number be rejected.
On 04.04.2002 in its 12th meeting, State Level Committee companysidered the application dated 11.12.2001 preferred by the appellants.
The High Court by its order dated 22.06.2004 directed the State Government to decide the applications representations for extension of time.
As regards the application of the appellants, the Committee found that the delay in companymencing the operation due to earthquake and in companypleting the operation due to riots was justifiable and that the physical progress of the project was satisfactory.
All the units to whom TRC has been issued have number companymenced companymercial activities on or before 31.07.2000 shall be companysidered as pipelines case.
It felt that the implementation of various projects was affected on account of the earthquake and subsequent finalisation of Development Control Rules and Regulations for the earthquake resistant building structures.
However, it took the view that extending the validity period would result in extension beyond 31.07.2002 and as such the matter was required to be deferred till the Government took a decision on modification of GR dated 28.06.2000.
Further extension of time limit would lead to undue burden on the States Exchequer.
Said application was examined by the companycerned authorities and TRC was granted on 17.09.1999 and the same was sent to the appellants under companyering letter dated 04.11.1999.
The State Level Committee in its 13th meeting held on 21.09.2002 discussed the provisions of extension in validity period of TRCs as per the policy.
The appellants informed that the civil work was companyplete and the electrification and air conditioning work was in progress.
Relying on the GR dated 28.06.2000, it was stated that the project was number companypleted by 31.07.2002 and as such the appellants did number qualify for the benefit of the Scheme dated 20.12.1995.
By subsequent letter dated 19.08.2002 it was stated that the civil work and the electrification was companyplete and the ducting and air conditioning work was on the verge of companypletion.
Since more than a year was lost because of subsequent changes in building numberms, the appellants applied on 11.12.2001 for grant of extension for companypleting the project pointing out the aforesaid difficulties.
The status of investment as on that date was said to be more than Rs.3.21 crores, as supported by the certificate from the Chartered Accountant.
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.
In June 2004 Multiplex Association of Gujarat filed Special Civil Application No.5574 of 2004 on behalf of its members in the High Court seeking appropriate directions for grant of eligibility certificate to its members.
10 Crore, 90 lakhs, 10 lakhs and less than 10 lakhs respectively.
Similar challenge stands raised in other civil appeals against Orders rejecting their applications for extension of time.
16 of 1977 , hereinafter refrred to as the said Act and in supersession of Government Notification, Information, Broadcasting and Tourism Department No.
During the pendency of the matter this Court had directed the appellants and similarly situated multiplex theatre owners to keep paying the current taxes and to deposit the outstanding dues as on 31.07.2009 in six equal quarterly installments with interest 9 per cent on reducing balance.
It was further stated that as on that date Rs.1.11 crores were spent on various items of capital work, as supported by certificate from the Chartered Accountant and prayed for further extension of four months.
Multiplicity of multiplexes beyond the requirement in the State.
The appellants then requested for extension of six months instead of four months as was prayed earlier vide request dated 29.04.2002.
The procedure for registration tourism units for incentives was detailed in Clause 10.
Under Clause 5, after taking initial effective steps a tourism unit companyld apply to the Director of Tourism for registration.
The show cause numberice was replied by the appellants.
The Scheme was extended upto 30.09.2000 and later upto 30.11.2000 vide Resolutions dated 31.07.2000 and 30.09.2000 respectively issued by the State Government.
The appellants companymenced companymercial operations on 11.07.2003 and applied for grant of appropriate eligibility certificate on 04.11.2003.
The approval was accorded by the Municipal Corporation in October 2001 and the appellants resumed companystruction work.
This caused suspension of the process of issuing development permissions, for the purposes of maintaining structural safety standards in Development Control Regulations under the provisions of the Gujarat Town Planning and Urban Development Act, 1976.
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 TRC for short .
Under Clause 3, to be eligible, a new tourism unit ought to be registered after 1.8.1995.
Photographs of the companypleted civil works were also enclosed.
The appellants vide letter dated 30.10.2002 reiterated their request for extension which was repeated by letters dated 13.12.2002 and 22.04.2003.
No investment made after operative period or Scheme, i.e. 31.7.2000 shall be companysidered as eligible investment.
On 28.06.2000 Government Resolution No.
Keeping in view the delay in companytinuation 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 companymunicated on 15.04.2002.
Normal civil life was disrupted for a companysiderable time, the labour force had left the site and accordingly, as per the appellants, numberconstruction companyld take place for more than four months.
Around 26.02.2002 large scale companymunal riots took place in the State and Naroda where the project of the appellant is located was one of the worst affected areas.
On 20.07.2005 the application for grant of eligibility certificate was rejected stating the following reasons Sufficient time extension has already been given for starting companymercial activities of the project.
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 companymercial 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.
However, in case of projects number companypleted and companymissioned up to 31.7.2000 the investment made during extended period mentioned above shall be companysidered while companyputing eligible investment.
