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Judgment
A. Kulasekaran, J.—The petitioner has come forward with this writ petition praying for a writ of Certiorarified Mandamus by calling for the
records of the letter No. 7339/Su3/2003-10. dated 17.06.2004 passed by the first respondent and quash the same and direct the respondents to
grant subsidy as per G.O. Ms. No. 14 dated 20.01.1992 along with Interest.
The petitioner is a company incorporated under the Companies Act, which stated to have invested a sum of Rs. 47.46 lakhs for starting a hotel
resorts. The petitioner company has applied for planning permission with the local body, the same was considered and planning permission was
also granted on 23.03.1990, but the petitioner could not commence the construction, in time, hence, sought for renewal and the same was also
considered by the local authorities and renewal was granted by order dated 07.03.1992. In the meanwhile, the first respondent has issued G.O.
Ms. No. 306, Industries, (MIG.2) Department dated 22.05.1989 wherein it is stated that in view of the important role played by tourism in
improving the socio-economic conditions of the society ""Tourism"" has been declared as an ""Industry"" in Tamil Nadu and that the Government
appointed a committee to examine and recommend to the Government tourism project schemes and activities which can be recommended for the
various incentives, concessions and subsidies, thereafter, the committee has submitted its report which was considered by the Government and the
following projects were declared as Tourism Projects for the purpose of extending various concessions, incentives and subsidies as applicable to
other industries:
1) One Star, Two Star and Three Star hotels with investment less than Rs. 100 lakhs to be set up in Tamil Nadu excluding the Corporation limits
of Madras, Coimbatore and Madurai
2) Amusement Parks
3) Approved Tour Operators (for A.C. Coaches)
4) Golf Courses
5) Restaurants approved by Government of India/Government of Tamil Nadu
Thereafter, in partial modification of the said GO Ms No. 906 dated 22.05.1989, the Government Issued G.O. Ms. No. 14, Information and
Tourism (Tourism VI) Department dated 20th January 1992 extending certain concessions, incentives and subsidies to the Tourism Protects which
are mentioned below:
Loans will be given to Tourism projects at 14 per cent interest or as fixed by Government from time to time by Tamil Nadu Industrial Investment
Corporation and SIPCOT.
Capital subsidy for new tourism projects at 10 per cent of total investment excluding cost of land, subject to a maximum of Rs. 10 lakhs per
project.
Deferral Sales Tax for a period of 5 years on restaurant sales ineligible hotels and restaurants.
Waiver of 50 percent luxury tax for a period of 5 years on rooms in respect of new hotel projects
Electricity tariff concession for new tourism projects on par with new industries
Capital subsidy at the rate of 15 percent for purchase of generators to be installed in new tourism projects, with a separate ceiling for Rs. 5.00
lakhs, which is exclusive of the ceiling of Rs. 10 lakhs given as capital subsidy on the total investment in the project.
It is stated that the petitioner has submitted an application seeking capital and generator subsidy and on receipt of the same, the first respondent,
by communication dated 26.11.2002 recommended to the second respondent for sanction of the said subsidy to the petitioner. In the meanwhile,
the petitioner was directed by the respondents to furnish the details relating to commencement of their business and accordingly, by letter dated
08.09.2001, the petitioner sent the said details enclosing the certificates issued by the local body and other authorities to show that the petitioner
has commenced the business only on 07.06.1993. Thereafter, the second respondent passed an order dated 09.12.2002 stating that the request
for sanction of capital subsidy was examined in detail and found that capital subsidy cannot be sanctioned as per rules in force. Aggrieved by the
said order dated 09.12.2002, the petitioner has filed an appeal before the first respondent on 18.12.2002. Pending the appeal, the first respondent
also directed the second respondent to re-consider the request of the petitioner for sanctioning subsidy, but strangely, the first respondent, by the
impugned order dated 17.06.2004 rejected the appeal on the ground that subsidy cannot be given with retrospective effect namely prior to G.O.
Ms. No. 14 dated 20.01.1992, hence, the present writ petition has been filed.
Mr. K.V. Sundarajan, learned Counsel appearing for the petitioner submitted that the first respondent misconstrued the Government Order as
well as the date of construction of the resort by the petitioner; that G.O. Ms. No. 14 dated 20.01.1992 never says that an industry which
commenced the construction process prior to the issuance of the said Government Order not entitled to the subsidy, however, in this case, the
renewal of planning permission sought for by the petitioner was granted only on 07.03.1992 i.e., after the issuance of G.O. Ms. No. 14 dated
20.01.1992, hence, the petitioner is entitled to the subsidy; that the first respondent itself has recommended to the second respondent to extend the
subsidy to the petitioner even during the pendency of the appeal before it, which was not considered by the second respondent, while so, rejecting
the appeal is untenable in law; that in any event, denying subsidy to the petitioner unit, which commenced the business on 07.06.1993 is contrary to
the objects of G.O. Ms. No. 14 dated 20.01.1992 and prayed for quashing of the impugned order.
On the above contention, this Court heard the learned Additional Government Pleader appearing for the respondents, who submitted that the
petitioner has obtained planning permission from the local authority only on 23.03.1990, the said date is crucial to get the concession extended by
the Government in G.O. Ms. No. 14 dated 20.01.1992, hence, the impugned order was rightly passed by the first respondent and prayed for
dismissal of the writ petition.
This Court carefully considered the argument of the counsel for both sides and perused the material records. The government has issued G.O.
Ms No. 14 dated 20.01.1992 thereby certain concessions, incentives and subsidies were extended to the tourism industry. Even prior to the said
Government Order, G.O. Ms. No. 306, Industries (MIG.2) Department dated 22.05.1989 was issued by the first respondent based on the report
submitted by the committee and other agencies thereby the below mentioned concessions, incentives and subsidies as applicable to other industries
were extended to the tourism projects, they area:
1) One Star, Two Star and Three Star hotels with investment less than Rs. 100 lakhs to be set up in Tamil Nadu excluding the Corporation limits
of Madras, Coimbatore and Madurai
2) Amusement Parks
3) Approved Tour Operators (for A.C. Coaches)
4) Golf Courses
5) Restaurants approved by Government of India/Government of Tamil Nadu
In partial modification of the above said G.O. Ms. No. 306 dated 22.05.1989, the government has issued G.O. Ms. No. 14, Information and
Tourism (Tourism VI) Department dated 20.01.1992 whereby certain concessions were extended to the tourism projects which are mentioned
supra. The petitioner, though obtained planning permission from the local body originally on 23.03.1990, could not commence the construction for
several reasons, which are not relevant, however, he approached the local body again for renewal, which was granted on 07.03.1992. It is
necessary to mention that the petitioner applied for renewal with the local body by their letter dated 18.01.1992 i.e., two days prior to issuance of
G.O. Ms. No. 14 dated 20.01.1992, hence, it cannot be said that for the purpose of availing the benefits of the said Government Order, the
petitioner approached the local body for renewal. The various certificates issued by the authorities which are enclosed in Page Nos. 15 to 19 of
the typed set of papers disclose that the petitioner has commenced the business only on 07.06.1993. Indeed, the first respondent in his letter dated
26.11.2002 recommended to the second respondent to consider the request of the petitioner for granting subsidy but the same was not
considered. While things are such, the second respondent has sent a communication dated 09.12.2002 informing that the petitioner''s request was
examined in detail and found that capital subsidy could not be sanctioned as per Rules in force. The said order was challenged by the petitioner by
filing appeal before the first respondent. Pending appeal, the first respondent has sent a communication dated 14.01.2003 to the second
respondent requesting to re-consider the claim of the petitioner for grant of subsidy, thereafter, nothing transpired, however, the first respondent
has passed the order dated 17.06.2004 rejecting the appeal of the petitioner. It is seen from the impugned order that two reasons were assigned
for rejecting the appeal namely (i) the petitioner has commenced the business prior to issuance of G.O. Ms. No. 14 dated 20.01.1992, hence
subsidy cannot be applied retrospectively and (ii) there is no budget provision for this kind of subsidy, hence, government has to issue orders in this
file as a special case for which the government should not agree. The first reason that subsidy was applied retrospectively is factually incorrect. The
renewal of planning permission granted by the local authority was on 07.03.1992 and the certificates produced by the petitioner from various
authorities also disclose that the petitioner commenced the business from 07.06.1993. The second reason that there is no budget provision at that
time and if at all as a special case an order to that effect has to be passed is not a valid reason because the said technical reason is contrary to the
object of G.O. Ms. No. 14 dated 21.01.1992, therefore, this Court is of the considered view that the first respondent, without considering the
above said facts and also the object of G.O. Ms. No. 14 dated 21.01.1992 has passed the impugned order, hence, the same is liable to be set
aside and accordingly it is set aside. The writ petition is allowed as prayed for. No costs.