GUJARAT HOTELS LIMITED Vs. STATE OF GUJARAT

JUDGEMENT

(1.) Since common issue is involved in both these petitions and since they are heard together, the same are being disposed of by this common judgment and order.

(2.) Special Civil Application No.6896 of 1993 is filed by the petitioners praying for striking out and quashing the impugned Resolution dated 8.6.1993 (Annexure-E) and impugned letters of demand dated 23.6.1993, 24.6.1993 and 8.7.1994 (Annexure-G) collectively. The petitioners have also prayed for the direction to the respondents to grant to the petitioner Nos.1 and 3 Companies the benefits and concessions contained and set out in the minutes of the meeting dated 4.10.1990 and the Resolution dated 22.3.1991 and 10.9.1992 (Annexure - A, B and C respectively). The petitioners have alternatively prayed for the directions to the State Government to honour commitment and promise as made vide its Resolution dated 22.3.1991 and 10.9.1992 to grant concession of Rs.278 lacs by way of differed payment of luxury-tax, purchase tax, sales-tax and electricity duty for four years from 1991-92 to 1994-95 without interest.

(3.) Special Civil Application No.6896 of 1993 was admitted and rule was issued by this Court on 5.8.1993. This Court has passed a detailed order while refusing to grant interim relief. The Court in concluding paragraph has observed that the petitioner Company has received the amount of tax from its customer for and on behalf of the State Government and seeks to prevent the government from releasing the said amount which is even otherwise payable to the State Government under the Act. The Court, therefore, took the view that this is not a fit case in which interim relief should be granted in favour of the petitioners. There would not be miscarriage of justice if interim relief was refused. On the contrary, granting of interim relief would amount to abuse of process of Court and hence interim relief was refused. This order was challenged by the petitioners before the Division Bench of this Court in Letters Patent Appeal No.30 of 1994. The Appeal was disposed of by the Court on 2.2.1994. While disposing of the said Appeal the Court observed that it is not disputed that a Resolution was passed by the Government by way of a package deal, whereby payment of luxury tax by the appellants, to the respondents was deferred by four years. This meant that the appellants could collect tax from the customers, but would not be obliged to pay to the Government for a period of four years. This concession was given in order to rehabilitate the sick unit and because of this, one of the major shareholders of the Company invested, approximately Rs.1,24,00,000/-. The Court further observed that under the Gujarat Tax on Luxury (Hotels and Lodging Houses) Act, 1977 such deferment could not have been granted and, therefore, principles of promissory estoppel are not applicable. Without expressing any final opinion, prima facie, it appears to the Court that under proviso to Section-8 time for payment of tax already realised could be extended. Therefore, the action of the State Government in deferring payment would not be contrary to law. In this view of the matter, the Court stayed the realisation of the demand by the respondents. The Court, however, made it clear that the appellants shall be bound by the terms of the Government Resolution, whereby the payment was deferred by only four years. The Court, therefore, continued interim relief till disposal of the Special Civil Application and liberty was granted to the parties to approach the Single Judge for expeditious hearing. The Court further made it clear that the question regarding payment of interest, if any, would arise on the disposal of the Special Civil Application.