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W.P. No. 2586/2012 and W.P. No. 1927/2012 arise out of common cause and therefore, are being considered and decided analogously. For decision, the material contained in W.P. No. 2586/2012 is being referred to. The petitioners have approached this Court under Article 226 of the Constitution of India assailing Annexure P-15 dated 03.08.2009 whereby the Assistant Commissioner Excise, Gwalior has directed the Executive Engineer of M.P. State Electricity Board, Gwalior to carry out inspection of Deen Dayal City Mall to assess tenability of the claim of exemption from electricity duty extended to the said Mall in terms of policy of the State Government as regards grant of said exemption to the multiplexes. Further challenge is made to Annexure P-17 dated 26.09.2009 by which the Divisional Commissioner (Revenue), Gwalior has directed for recovery of wrongly granted exemption of electricity duty to the Deen Dayal City Mall, the multiplex complex established by the petitioners, after rejecting the representation preferred by the petitioners vide Annexure P-16.
The State Government (Department of Commerce) framed policy dated 05.09.2001 (Annexure P-3) for establishment of centres for integrated family entertainment. This policy was exclusively for the city of Bhopal, Indore, Gwalior and Jabalpur. Concessions and exemptions were extended for effective implementation of this policy. The said policy (Annexure P-3) in clause-3 defines multiplex complex or family entertainment centre to be established by incurring minimum cost of Rs. 3 crores containing the following minimum facilities for entertainment:-
(i) At least three cinema halls with minimum integrated capacity of Rs. 1,000/- viewers.
(ii) Video Game Arcade.
(iii) Fast food centre
(iv) Place and facilities for children for play and entertainment.
(v) Place for vehicle parking.
In this regard notification u/s 9 of M.P. Hotel Tatha Vas Grahon Mein Vilas Vyavastha Par Kar Adhiniyam, 1998 (herein after referred to as an ''Act of 1998'') was issued and published in the M.P. Gazette Extraordinary dated 25.10.2001 exempting integrated family entertainment multiplex centres (multiplex complexes) from payment of tax under Act of 1998 for a period of 5 years from the date of commercial exhibition of the movie in all the cinema halls. The same notification also exempted the multiplex complexes from operation of section 3 of M.P. Entertainment Duty and Advertisement Tax Act, 1936 in a phased manner. This exemption notification under the Act of 1936 further defines the term multiplex in similar fashion as defined by the notification under the Act of 1998.
In terms of clause 4.3 of the policy of the State Government dated 05.09.2001 providing for exemption from electricity duty to multiplexes for a period of 5 years, notification dated 11.10.2001 (Annexure P-5) was issued by the State of M.P. (Department of Energy) by exercising the power u/s 3-B of M.P. Electricity Duty Act, 1949 (herein after referred to as an ''Act of 1949'') in public interest to encourage establishment of multiplexes in the State of M.P. This notification (Annexure P-5) made the exemption applicable for a period of 5 years from the date of establishment of the multiplexes.
Learned counsel for the petitioners contended that pursuant to the above said exemption granted in the provisions and enactment including the one under the Act of 1949, the petitioners were encouraged to establish the multiplex at Gwalior known by the name and style of Deen Dayal City Mall. It is further contended by learned counsel for the petitioners that necessary permission for construction was granted by the Department of Town and Country Planning vide Annexure P-6 dated 12.04.2005 and with further amended permission granted on 30.08.2005 vide Annexure P-7. It is further contended that agreement for high tension supply of electric power was entered into between M.P.S. E. B. and petitioners vide Annexure P-8 on 08.02.2008 for supply of 600 KVA from the date of agreement followed by increase in load @ 600 KVA after three (3) months and six (6) months of commencement of agreement. The petitioners further contend that the respondents permitted the petitioners to avail exemption from electricity duty for two months i.e. October and November, 2008, but subsequently started charging electricity duty in violation of the notification for exemption. It is also contended that commercial exhibition of cinema was commenced immediately after receipt of first stage of electric connection on 19.04.1998, but completion certificate of the multiplex was issued by the Municipal Corporation, Gwalior on 25.03.2009 (Annexure P-11). On the strength of above, said contention founded upon the factual matrix supra, learned counsel for petitioners contends that the multiplex known as Deen Dayal City Mall is entitled to avail exemption from payment of electricity duty by the State of M.P. for the entire period of 5 years in terms of notification issued by the State (Department of Energy) dated 11.10.2001 read with definition of multiplex as defined in the policy framed by the State on 05.09.2001. It is thus urged by the learned counsel for the petitioners that impugned letters Annexures P-15 & P-17 issued by the respective authorities are untenable in the eyes of law on the following grounds:-
(i) The exemption from electricity duty granted by the State in exercise of powers u/s 3-B of Act of 1949 cannot be withdrawn or even amended by any authority sub-ordinate to the State and since the letters Annexures P-15 & P-17 are issued by the Assistant Excise Commissioner, Gwalior and Divisional Commissioner (Revenue), Gwalior, who are mere functionaries of the State, the said impugned letters are non-est in the eyes of law.
(ii) The respondents are wrong in withdrawing the exemption of electricity duty despite Deen Dayal City Mall satisfying the definition of multiplex complex laid down in the policy of the State Government dated 05.09.2001.
(iii) Any change in the definition of multiplex complex brought about by incorporating Rule 90-A in the M.P. Bhumi Vikas Rules, 1984 (herein after referred to as ''Rule of 1984'') cannot retrospectively take away the accrued right to avail exemption from electricity duty based on the definition of multiplex complex recognized in the policy of the State Government dated 05.09.2001.
(iv) The provisions of Rule 90-A of Rules of 1984 providing for the first time the definition of the multiplex complex in statutory terms made applicable from 27.09.2008 (date of publication in the M.P. Gazette Extraordinary), cannot be applied retrospectively to adversely affect the benefit of exemption from electricity duty accrued to the petitioners in regard to Deen Dayal City Mall, which commenced commercial exhibition of film prior to 27.09.2008.
(v) The exemption from payment of electricity duty is in relation to the initial policy of the State Government dated 05.09.2001 (Annexure P-3) and thus cannot co-relate to subsequent policy dated 07.10.2013 (Annexure P-13) by taking of the newly incorporate Rule 90 A of Rules of 1984.
Per contra, the contesting respondents No. 6 to 9 have primarily contended thus:-
(i) The grant of exemption from electricity duty extended to the petitioners in the electric bill for October and November, 2008 was a mistake which was subsequently withdrawn as the multiplex complex established by the petitioners did not meet the parameters of definition of multiplex complex laid down by Rule 90-A of Rules of 1984.
(ii) The initial policy of the State Government did not define multiplex complex, but merely laid down broad and flexible definition which is thus of no avail to the petitioners. Even as per initial policy (P-2), the multiplex was not supposed to be a commercial and shopping venture but an exclusive family entertainment centre.
(iii) The policy maker did not contemplate shopping activities or only commercial activities to be eligible for exemption.
(iv) The shopping mall even if contained under the same roof in which the multiplex is situated cannot lead to categorizing the entire building to be a multiplex. The permission for construction granted vide Annexure P-5 in the year 2005 of Deen Dayal City Mall being prior in point of time to the induction of Rule 90-A in the Rules of 1984, is clear indication of the fact that permission was granted to construct a multiplex cum shopping mall and not a Multiplex simpliciter.
(v) Under the amended Rule 90-A of Rules of 1984, the lodging area like hotels with rest rooms within multiplex, suites and commercial establishments like shops, office complex, etc. within multiplex complex cannot exceed 50 % of the total built up area and since the said two types of commercial activities in Deen Dayal City Mall are in excess of 50% of total built up area, the establishment of the petitioners is neither a multiplex nor a multiplex-cum-shopping complex, but a mere shopping mall.
(vi) Assuming without admitting that Deen Dayal City Mall was a multiplex-cum-shopping, but it ceased to be so w.e.f. 27.09.2008 when the definition of the multiplex/multiplex-cum-shopping in shape of Rule 90-A of Rules of 1984, was introduced.
(vii) Commercial activities in the establishment of the petitioners do not require any incentive even under the State policy dated 05.09.2001.
(viii) The Deen Dayal City Mall could not have been completed prior to 27.09.2008 (date of introduction of Rule 90-A of Rules of 1984) as the full load of 1800 KWA electricity demanded by the petitioners was extended only from 03.11.2008.
(ix) By letter dated 10.08.2009, the petitioners clearly stated that electricity load for cinema hall was utilized only in third stage w.e.f. 03.11.2008 and, therefore, the essential component of multiplex became available on or after 03.11.2008 and, therefore, there was no multiplex prior to the amendment brought about in the Rule 90-A of Rules of 1984 on 27.09.2008.
(x) The petitioners are estopped from claiming exemption from payment of electricity duty due to their own conduct as the petitioners paid electricity duty right from inception of Deen Dayal City Mall i.e. the year 2008 till date.
Learned counsel for the rival parties are heard at length.
This Court is of the considered view that it would be appropriate to take up the legal issue first before adverting to issues which are more factual in texture.
The first and foremost ground raised by the petitioners is regarding withdrawing of exemption from electricity duty by the authority subordinate to the State which had extended the exemption being in gross violation of the statutory provision of section 3-B of Act of 1949.
For convenience and ready reference section 3-B of Act of 1949 is reproduced herein below:-
3-B. Power to exempt.-Where the State government is of opinion that, -----
(i) in order to encourage the establishment of any particular industry or class of industries in the State; or
(ii) having regard to the particular circumstances of any industry or class of industries; or
(iii) in order to extend facilities to such persons or class of persons and for such purposes as the State Government may, by notification specify;
it is necessary or expedient so to do in public interest, it may by notification and subject to such conditions, if any, as it may specify in the notification, --
(a) exempt from payment of duty in whole or in part---
(i) any distributor or electrical energy or producer in respect of the electrical energy sold or supplied to such industry for the purposes thereof;
(ii) where any producer or class of producers runs the industry, in respect of the electrical energy consumed by such producer or class of producers for the purpose of such industry;
(iii) any distributor of electrical energy or producer in respect of the electrical energy sold to or used for consumption by person or class of person and for purposes specified in the notification;
(b) cancel any such notification and again subject, by a like notification, the distributor of electrical energy or producer or class of such producers to the payment of such duty in respect of such sale, supply or consumption of electrical energy.
The above said provision bestows exclusive powers to the State Government to grant exemption from payment of electricity duty under clause ''(a)'' and to cancel an exemption once granted under clause ''(b)''. The notification in the instant case issued on 11.10.2001 (Annexure P-5) is by the State of M.P. in the name and by the order of the Governor u/s 3-B of Act of 1949. The said notification is stated to be issued in public interest to encourage establishment of multiplexes in the State of M.P. Thus, the said notification of exemption Annexure P-5 is issued u/s 3-B(i) of Act of 1949 in order to encourage establishment of any industry or class of industry in the State. It is true that Act of 1949 does not provide for delegation of power contained in section 3-B of Act of 1949 to any authority subordinate to the State Government. Thus contention of learned counsel for the petitioners that exemption once granted by the State Government cannot be withdrawn or amended or curtailed by the authority subordinate to the State prima facie appears to be correct. In the case at hand, the petitioners are aggrieved not by withdrawal, curtailment or amendment of the said exemption notification issued u/s 3-B of Act of 1949, but are essentially aggrieved by alleged misinterpretation of definition of the term ''multiplex'' defined by the law existing prior to and subsequent to 27.09.2008, when the concept of multiplex was introduced in the M.P. Bhumi Vikas Rules, 1984 for the first time in shape of Rule 90-A.
Thus, the first ground that exemption from electricity duty granted by the State cannot be withdrawn by any subordinate authority is merely academic than real and, therefore, is not being decided.
The primary and core question in this petition appears to be in regard to the exact definition of Multiplex existing prior and subsequent to coming into effect of Rule 90-A of Rules of 1984. Thus, this Court proceeds to address this core issue, leaving the other peripheral one''s, since they will automatically fall in place once the said core issue is decided.
The concept of multiplex was foreign to the Rules of 1984 prior to incorporation of Rule 90-A of Rules of 1984 on 27.09.2008. Rule 90 provides for cinema theatre and public assembly hall. The policy for encouraging establishment of multiplexes was framed on 05.09.2001 by the Department of Commerce & Tax inter alia extending 100 % exemption from payment of electricity duty for a period of 5 years. Encouraged by the said policy number of multiplexes were established in the earmarked four (4) cities of State of M.P. including Deen Dayal City Mall at Gwalior whose construction appears to have commenced some time in 2005 after permission for the same was granted by the Department of Town and Country Planning vide Annexure P-6 dated 12.04.2005 and Annexure P-7 dated 30.08.2005. It further appears from the material on record that the construction was completed some time in 2008 though there are contradictory pleadings made by the rival parties in regard to the exact date of exhibition of first film in the Multiplex contained in Deen Dayal City Mall, Gwalior. Meanwhile, Rule 90-A of Rules of 1984 was incorporated which for convenience and ready reference is reproduced herein below:-
RULE 90-A:-
(1) Multiplex means such building in which separately two or more cinema halls are installed, separately with or without shopping area which in case of former, shall be called "Multiplex-cum-shopping".
(2) Activities permissible in multiplex or "Multiplex-cum-shopping" shall be as under:--
Entertainment area such as two or more screen cinema halls concert hall, 3-D cinema hall, games arcade, discotheque go carting, 3 dimension arena, bowling alley and other activities which come in this category.
Food zone complex, restaurant, cafe, bar, lounge bar, pub, ice cream parlour and similar activities.
Lodging means areas like hotels, with rest rooms, suites, etc.
Commercial establishment, shops office complex, etc.
Provided that ---
a. Activities mentioned in Sr. No. 3 & 4 shall be permissible upto 50% of the total built up area.
b. Inside height of the Multiplex hall shall not be less than 8 meters.
c. Norms for, establishment of new multiplex-cum-shopping and for conversion of old cinemas into multiplexes:-
Other conditions:---
Calculation of Parking Spaces shall be as follows:-
Parking Area required for each car (1 car space):-
(i) Basement --- 35 Sq. mt.
(ii) Stilts --- 30 Sq. mt.
(iii) Open Spaces --- 25 Sq. mt.
No parking shall be allowed in marginal open spaces.
Multiplex shall be fully air conditioned.
Orders issued from time to time by the Commercial Tax Department as well as by any concerned department of the Government shall be binding to all colonizers, agencies, besides owned contracted by the Government or any other person who so ever is engaged in construction of multiplex or multiplex complexes.
Rules 82, 83, 84 and other rules related with public facilities, in Madhya Pradesh Bhumi Vikas Rules, 1984 shall have to be followed.
Pursuant to incorporation of Rule 90 A of Rules of 1984 a new policy dated 07.10.2008 (Annexure P-13) was framed for encouraging establishment of new multiplex and for conversion of existing cinema hall into multiplex. This new policy inter alia provides 100 percent exemption from electricity duty for a period of 5 years to all multiplexes subject to the condition that this exemption would apply only in respect of area occupied by the multiplex (cinemas) video game arcade, fast food centres and area for entertainment of children and parking places. In other words, the exemption from electricity duty provided under the new policy dated 07.10.2008 (Annexure P-13) was subject to the same condition as contained in Rule 90 A of Rules of 1984.
From a comparative scrutiny of definition of the multiplex under original policy dated 05.09.2001 and the notification dated 25.10.2001 (Annexure P-4) issued under the Adhiniyam of 1998 on the one hand and the definition contained in new policy dated 07.10.2008 (Annexure P-13) on the other, the following prominent distinguishing features are evident:-
(i) The original policy of 2001 did not impose any condition of minimum built up area covered by hotels with restaurant, suites, shops, office complexes, etc. Whereas, the new policy prescribed maximum limit of 50% built up area to be occupied by the aforesaid amenities.
(ii) The original policy did not place any such bar of commercial activities occupying not more than 50% of the total built up area of the Multiplex Complex, but merely provided that the multiplex complex or family entertainment centres will provide at least the following five basic amenities:-
(a) three cinema halls with integrated capacity of 1 thousand viewers;
(b) video game arcade;
(c) fast food centres;
(d) area and facility for entertainment of children;
(e) parking area.
(iii) The new policy derived strength from Rule 90 A of Rules of 1984 which provides for a number of basic minimum/maximum requirements in regard to F.A.R., minimum plot area, maximum ground coverage, M.O.S., maximum height of building, minimum parking area for different category of towns, multiplex to be fully air conditioned, etc.
(iv) The new policy dated 07.10.2008 was made applicable to new multiplex to be constructed and for existing cinema hall to be converted into multiplex.
Undoubtedly, Deen Dayal City Mall, Gwalior constructed by the petitioners was pursuant to the original policy of 2001 when law did not provide for any definition of multiplex, but the policy of 2001 merely laid down broad criteria as mentioned (supra). By the time Deen Dayal City Mall, Gwalior was completed or was nearing completion and became functional the Rules of 1984 were amended to incorporate the concept of multiplex in shape of Rule of 90A. A gazette notification publishing and bringing into effect Rule 90A of Rules of 1984 does not provide in express term that Rule 90A of Rules of 1984 would be retrospective in application. Thus, in absence of any such express provision regarding retrospectivity, the statutory provision of Rule 90 A of Rules of 1984 is prospective in terms of law laid down by the Apex Court in the case of Income Tax Officer, Alleppey Vs. M.C. Ponnoose and Others, , Bakul Cashew Co. and Others Vs. Sales Tax Officer Quilon and Another, , Bejgam Veeranna Venkata Narasimloo and Others Vs. State of A.P. and Others, The Prohibition and Excise Supdt., A.P. and Others Vs. Toddy Tappers Coop. Society, Marredpally and Others, , Vice Chancellor, M.D. University, Rohtak Vs. Jahan Singh, & Panchi Devi Vs. State of Rajasthan and Others,
It is worth mentioning that whatever doubt existed in regard to application of Rule 90-A being retrospective or prospective, the same was eliminated by publication of new policy dated 07.10.2008 (Annexure P-13). This new policy dated 07.10.2008 in express terms was made applicable by the State Government to the new multiplexes which will henceforth be constructed. Thus, the State Government by its new policy removed and eliminated whatever scintilla of doubt existed in regard to prospective/retrospective nature of new definition of multiplex introduced by Rule 90 A of Rules of 1984 and the new policy of 2008. This Court thus has no hesitation to hold that at least for the purpose of grant of exemption from payment of electricity duty to multiplex in regard to which construction has commenced on the basis of sanction granted by the Town and Country Planning Department prior to 27.09.2008, when Rule 90 A of Rules of 1984 was introduced, the definition contained in original policy of the State of M.P. dated 05.09.2001 (Annexure P-3) would apply.
Correspondingly, therefore, definition of the multiplex contained in Rule 90 A of Rules of 1984 and the new policy of Government of M.P. dated 07.10.2008 for the purpose of grant of exemption from electricity duty cannot be made applicable to the Deen Dayal City Mall, Gwalior established by the petitioners who had commenced construction of the said Mall based upon sanction granted by the Department of Town and Country Planning, Gwalior in 2005 (prior to 27.09.2008)
The controversy can be viewed from another angle. In case, the contention of respondents is accepted that Rule 90 A of Rules of 1984 and the new policy (Annexure P-13) is applicable to the Deen Dayal City Mall, Gwalior, then an anomalous situation would arrive. The object of the original policy of 2001 of the State Government was to encourage establishment of multiplexes in four (4) earmarked cities of M.P. including Gwalior. The petitioners on being encouraged by the said policy invested huge sums of money with the hope of being benefited by the exemption from electricity duty for a certain period of time. When Deen Dayal City Mall, Gwalior was becoming or had become functional, the State introduced a new definition of multiplex which was in variance to the earlier definition under the 2001 policy. This newly introduced definition cannot be applied to take away the exemption for which the petitioners were otherwise eligible under the policy of 2001 which was in vogue when construction of Mall in question commenced. This action of the respondents not only negates the object of the original policy dated 05.09.2001 (Annexure P-3) but further creates an atmosphere of insecurity and uncertainty amongst the entrepreneurs who are ready and willing to contribute to the over all development of the State.
Learned counsel for the petitioners has pressed into service the decision in the cases of Commissioner of Police, Bombay Vs. Gordhandas Bhanji, , Shiv Prasad Vs. Durga Prasad and Another, , Mohammad Rafiq Akhtarbhai Vs. State Transport Authority, Gwalior and another, , Marathwada University Vs. Seshrao Balwant Rao Chavan, , Sales Tax Officer and Another Vs. Shree Durga Oil Mills and Another, State of Rajasthan and Another Vs. J.K. Udaipur Udyog Ltd. and Another, NGEF Ltd. Vs. Chandra Developers Pvt. Ltd. and Another, & M. Chandru Vs. The Member Secretary, Chennai Metropolitan Development Authority and Another, The above said verdicts of the Apex Court and this Court primarily deal with the aspect that power vested in an authority by statue can be delegated only when the statute permits such delegation in regard to the principle of legitimate expectation and promissory estoppel. The said decisions are of no avail to the petitioners for the reason of inapplicability to the issue involved herein. The occasion of testing the impugned orders on the anvil of maxim of delegates non potest and delegate as this Court has not gone into the said aspect. Moreover the principle of estoppel or eligibility expectation is not being invoked by this Court to decide the instant case as it is evident from the discussion supra and infra. The issue of interpretation of definition of multiplex which existed prior and subsequent to the crucial date i.e. 29.09.2008 is being considered for which the above said maxim''s principle need not be invoked.
In view of above conspectus of factual and legal discussion, this Court holds that the question of eligibility of Deen Dayal City Mall, Gwalior of being exempt from electricity duty extended as per notification dated 11.10.2001 (Annexure P-5), ought to be considered and decided based upon the definition of "multiplex" provided in the policy dated 05.09.2001 (Annexure P-3) issued by the Department of Commercial Taxes and not by the definition of "multiplex" in Rule 90 A of Rules of 1984 or the new policy of the State Government dated 07.10.2008 (Annexure P-13).
From the material placed on record and the reply of the respondents, it is evident that denial/withdrawal of exemption from electricity duty to the Deen Dayal City Mall is solely based upon definition of the multiplex contained in Rule 90 A of Rules of 1984 and the new policy dated 07.10.2008 (Annexure P-13) and, therefore, this Court has no hesitation in allowing this writ petition and the connected W.P. No. 1927/2012 in the following terms:-
(i) The impugned order dated 03.08.2009 (Annexure P-15 in W.P. No. 2586/2012) issued by the Assistant Commissioner Excise, Gwalior and the order dated 26.09.2009 issued by the Divisional Commissioner (Revenue) Gwalior (Annexure P-17 in W.P. No. 2586/2012) and letter dated 01.03.2012 issued by respondent No. 4 (Annexure P-1 in W.P. No. 1927/2012) are hereby quashed.
(ii) The successful petitioners are entitled for cost of Rs. 5,000/- to be paid by the respondents jointly and severally within a period of sixty (60) days with intimation to the Registry of this Court regarding compliance.
A copy of this order be placed in the file of connected W.P. No. 1927/2012.