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Sayaji Hotels Ltd. Versus State of M.P. and others

Interpretation of Notification - Whether can be applied retrospectively or not - Petitioner hotelier was granted eligibility of certificate for exemption for a period of 10 years w.e.f. 5.11.1996 to 4.11.2006 but curtailed upto 31.3.2006 instead of 4.11.2006 by issuing notification dated 31.3.2006 and 15.9.2006, making retrospective amendment which is without authority of law - Held that:- it is a fundamental rule of law that no statute shall be construed to have a retrospective operation unless .....

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very clearly in terms of the Act – by a delegated legislation the right accrued to the petitioner cannot be taken away. Thus, the Supreme Court held that the amendments carried out could not take away the rights of the petitioner with the retrospective effect.

Here, the exemption, which was granted already earlier notification was available to the petitioner up to 4.11.2006, but vide notification dated 15.9.2006 to 31.9.2006, it was restricted up to 31.3.2006, meaning thereby, for a .....

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ble under the law and the petitioner who was extended the benefit of exemption from payment of tax till 15.9.2006 shall be entitled to get the aforesaid exemption. - Decided in favour of petitioner - W.P.No.11097/2012 - Dated:- 16-3-2015 - P.K. Jaiswal and D.K. Paliwal, JJ. Shri P.M. Choudhary, learned counsel for the petitioner. Ms. Mini Ravindran, learned Dy. Govt. Advocate for the respondents State. ORDER By this writ petition under Article 226 of the Constitution of India, the petitioner is .....

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the petitioner, it is a company incorporated and registered as a public limited company under the Indian Companies Act, 1956, having its registered office at Badodara (Gujarat). It has established a hotel at Indore, in the Vijay Nagar area in the name and style of 'Sayaji Hotels Ltd' and it's business operation commenced in the year 1996. It is registered as a dealer under the Commercial Tax Act, 1994, Central Sales Tax Act, 1956 and M.P. Hotel Tatha Vas Grihon me Vilas Vastuon Par K .....

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from payment of tax under the Luxury Tax Act, who have established or likely to establish in the State a new hotel under the new Tourism policy 1995, having made a capital investment of not less than 50 lakhs in which at least 10 rooms have been constructed from the date of commercial operation. Later on vide Notification No.A-3-30-96-ST-V(39) dated 3.7.1998, the exemption was made effective from the date of issue of certificate of eligibility. 5. Accordingly, petitioner hotelier was granted el .....

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uently, the notification - Notification No.A-3-38-2000-ST(55) and (56) dated 5.8.2000 were issued under Luxury Tax Act and Commercial Tax Act providing exemptions to the hoteliers, but such exemptions were optional at the hands of the hoteliers. The aforesaid exemption is allowable to the hotel, which has to be a registered dealer under the Commercial Tax Act, which had commenced their commercial operation on or before 31.1.1995. The duration of exemption was prescribed to be from 31.1.1995 to 3 .....

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with the restrictions and conditions specified in column (3) of the Schedule appended to the said notification. (ii) The amount of tax collected by the hotel from the customers from the date of commercial operation and deposited in the treasury, shall not be refundable to the hotelier. (iii) The amount of tax collected by the hotel from the customers from the date of commercial operation but not deposited in the treasury, shall have to be deposited in the treasury by the hoteliers. 8. From the p .....

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2002, came into force, certain new concepts like rebate of input tax have been incorporated. Section 14 of the VAT Act provides rebate of input tax to a registered dealer in certain circumstances. The Government of M.P. in exercise of powers conferred by Sub Clause (e) of Clause (i) of Section 72 of VAT Act 2002 and sub Section (5) of Section 8 of Central Sales Tax Act, 1956 has notified a scheme in respect of industrial units or hotels eligible to avail facility of exemption from payment of tax .....

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o force, and holding an eligibility certificate for the purpose, shall continue to avail the facility subject to the restrictions and conditions specified in Para 3 below and the said notifications shall be deemed to have been continued with the amendments accordingly. 3. (1) The facility shall be available for the unexpired period of eligibility certificate or to the extent of balance of cumulative quantum of tax as on 1st April, 2006,whichever is earlier; (2) The dealer shall make purchases fr .....

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excess of the input tax rebate. The amount so retained shall be included in computation of cumulative quantum of tax benefit. 4. The dealer shall continue to avail the facility of exemption from payment of tax in respect of the goods, including by-products and waste products, manufactured and sold in the course of inter-State trade or commerce. The amount so exempted shall be included in computation of cumulative quantum of tax benefit. 5. The dealer shall continue to avail the facility of exemp .....

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lf or the registered dealer in whose favour the balance of input tax rebate is to be adjusted or transferred. The assessing authority shall make the assessment in accordance with the provisions of clause (b) of sub-section (1) of Section 20 of the VAT Adhiniyam and after determining the balance of input tax rebate, adjust or transfer the balance by issue of refund adjustment order. The provisions of Section 37 of the VAT Adhiniyam shall mutatis mutandis apply to such adjustment. 11. Clause 3 (1) .....

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x liability by deducting input tax rebate from tax collected on sales within the State and being eligible to retain amount of tax collected, which is in excess of input tax rebate, amount to retain shall be included in computation of cumulative quantum of tax benefit. Clause 3(4) (5) (7) makes it clear that dealer shall be eligible to first collect and adjust balance of input tax rebate if any, against any other tax liability of self and to transfer the remaining balance for adjustment against t .....

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, dealers who are continuing to avail facility of exemption, which availed the facility over the unexpired period of eligibility certificate and they shall also be eligible to first adjust balance of input tax rebate if any, against any other tax liability of self and to transfer remaining balance for adjustment against tax liability of any other registered dealer, if desired. A hotelier who is continuing with the facility of exemption as on 1.4.2006 will continue to collect tax from its custome .....

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-est and inoperative as a delegated authority cannot make amendment retrospectively. 13. Learned counsel for the petitioner gave an example and submitted that in hotel business the customer stays only for a short period and checks out and as the tax from them was not collected, relying on the exemption notification it is an impossibility to collect the same from numerous persons. The customers paid the tariff as prevalent at the relevant time and they were also not bound to pay anything more. 14 .....

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yana v. Anil Pesticides Ltd. & Anr, reported as (2011) 19 STJ 11 (SC), Ruchi Fabrics Ltd. v. State of M.P. & Ors., reported as 1993 (32) VKN 449, State of M.P. & Anr. v. G.S. Dall & Flour Mills & Ors. reported as 24 VKN 224 and the Division Bench decision of M.P. High Court in the case of Ambika Refinery v. State of M.P. & Ors, reported as (2012) 20 STJ 563 and submitted that the amendment could not be given retrospective effect and could not have taken away the rights of .....

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other registered dealer, if desired. Therefore, the dealer who was continuing with the facility of exemption under the eligibility certificate earlier issued has not been said to any adverse consequence and rather, sufficient liberty is granted to such dealers for making necessary adjustment of rebate or claiming rebates or exemption. The petitioner who is continuing with the facility of exemption as on 1.4.2006 will continue to collect tax from its customers, and to compute his tax liability by .....

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ppeal has already been decided on 22.4.2011, even before filing of the present petition. The petitioner has suppressed this fact in the writ petition. 17. On merits, it is submitted that from 1.4.2006, the eligibility certificate granted to the petitioner was modified allowing the petitioner to claim exemption and input tax rebate instead of total exemption under the previous notification. 18. It is further submitted that against the appellate order dated 22.4.2011, the petitioner has still alte .....

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377; 20,51,806/- assessed upto 4.11.2006 has been allowed to be deducted in terms of eligibility certificate and for the remaining period, liability to tax has been assessed. Thus, as the petitioner has already been benefited with the exemption available to it for the unexpired period of eligibility certificate. No cause of action arises to question the legality and propriety of the impugned notifications, even if these notifications have been made enforceable w.e.f. 1.4.2006, ie., the date when .....

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expiry of the same. Initially, the petitioner was granted the benefit for a period of 10 years w.e.f. 31.1.1995 to 30.1.2005. Thereafter, by way of amendment the State level committee amended the period of exemption up to 4.11.2006. 21. We, in this case, are not concerned with the quantam of exemption to which the petitioner may be entitled to, but only with the interpretation with the relevant provision which arise for consideration before us. 22. It is a fundamental rule of law that no statute .....

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