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2023 (6) TMI 752 - KARNATAKA HIGH COURTWithdrawal of Exemption from payment of tax payable under the provisions of the KVAT Act 2003 - Doctrine of Promissory Estoppel - exemption for sale of food articles and beverages by new tourism units - no notifications have been issued in exercise of the powers conferred under Section 5(2) of the KVAT Act 2003 granting exemption. Revenue’s case is, in the absence of any notification issued under the provisions of the KVAT, assessee is not entitled for any exemption. HELD THAT:- A perusal of Exemption Certificate dated March 25, 2003 makes it is clear that assessee is a registered Tourism Industry and is eligible for 100% tax exemption for a period of 7 years. By Government Order No. FD 303 CSL 99, dated January 07, 2000, the State Government discontinued sales tax based incentives. However the incentives already offered and committed were saved. By issuing subsequent Notification No. FD 363 CSL 2006, dated July 17, 2007 under the KST Act, it was clarified that the incentives offered earlier would remain unaffected. In the present case, assessee has availed the benefit for 100% sales tax exemption in the year 2003. The KAT has rightly recorded that the vide Notification dated July 17, 2007, the State Government have clearly stated that rescinding of the Notification dated November 12, 1999 shall not be applicable to the dealers who have made investment in establishment in a new tourism units and the incentives offered and committed by the Government shall not get affected. Revenue has placed reliance on Hotel Madhuvan Case [2008 (12) TMI 703 - KARNATAKA HIGH COURT], where this Court was examining whether a tourism unit is an industrial unit or not - In the instant case, the issue involved is whether petitioner is entitled for benefit of exemption. Admittedly, assessee has obtained exemption certificate dated March 25, 2003 for a period of seven years with effect from February 27, 2003. Though the State Government issued a Notification on January 07, 2000 discontinuing sales tax based incentives, the same has been clarified vide Notification dated July 17, 2007 to the effect that the notification dated January 07, 2000 shall not affect the dealers who have made investment in establishing new tourism units. This question was not under consideration in Hotel Madhuvan Case. Therefore, the said authority does not lend any support to the contention advanced on behalf of the Revenue. It is recorded further that even in the notification dated 07.01.2000 it is stated that the discontinuation shall not affect the incentives that have been already offered or committed by the Government until the eligibility of such incentives are completed. The eligibility certificate was valid for 7 years and could not have been rescinded before the period of eligibility expired as it is sovereign assurance. The contention urged by the Revenue that in absence of any specific notification under the KVAT Act, assessee is not entitled for exemption, is untenable - There are no error in the impugned order passed by the KAT - Revision Petition is dismissed.
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