HOTEL HORIZON PRIVATE LIMITED Vs. SECRETARY DEPT OF TOURISM

JUDGEMENT

(1.) THE short question which arises in this writ petition is whether the approval granted by the Central Government, Ministry of Tourism, to the petitioner for setting up a hotel in Bombay enures for the benefit of the petitioner to enable it to have the concessions contemplated in S. 32(1)(v) regarding higher depreciation, S. 33(1)(b)(B)(ii) for higher development rebate and relief under S. 80J(6)(d).

(2.) THE undisputed facts, in brief, are that on the application of the petitioner, vide letter No. 5 -TH. 1(62)/68, dt. January 29, 1969, the Department of Tourism, Government of India, conveyed the approval of the Government for the hotel project Horizon to be constructed at Plot No. 37, Juhu Tara Road, Santacruz (West), Bombay, subject to the condition that the final tariff will be fixed in consultation with the Department and necessary licence to run the premises as a hotel will be obtained from the authorities concerned and a quarterly progress report regarding the construction of the hotel to be sent to the Department. Parliament had made amendments in the IT Act for giving certain concessions and reliefs to the hotel industry which was to be set up for encouraging tourism and with a view to augment foreign exchange earnings. The Finance (No. 2) Bill, 1967, gave the reasons for making the amendments in the IT Act. Annexure -7 contains the said reasons given for introducing the said amendment. So, the aforesaid sections of the IT Act were brought on the statute book on the basis of the said Finance Act. Section 32(1)(v) and S. 33(1)(b)(B)(ii) and s. 80J(6)(d) all clearly contemplate grant of concessions mentioned therein to a hotel if such hotel is for the time being approved in this behalf by the Central Government.

(3.) ACCORDING to the averments made in the petition, the petitioner had sent a letter dt. November 3, 1972, to respondent No. 1, Ministry of Tourism, praying that approval may be granted to the petitioner to enable the petitioner to have the benefits of the aforesaid provisions of the IT Act. According to the petitioner, no reply was received to this letter and after the assessment order was made, the petitioner again sent a letter dt. October 27, 1976, seeking approval of the Central Government for the purpose of having necessary reliefs and deductions under the IT Act and as no reply was received to the said letter, another letter dt. March 12, 1977, was sent. Respondent No. 1 at first granted the necessary approval for the purpose of the IT Act with effect from March 12, 1977, but now it is admitted that approval has been granted w.e.f October 27, 1976, onwards. It has been contended on behalf of the petitioner that the initial approval granted in 1969 to the hotel project in question should be deemed to be the approval of the Central Government for the purpose of the income -tax reliefs available to the hotels under the said provisions of the IT Act. In the alternative, it is pleaded that the Central Government's approval should be deemed to have been granted retrospectively when the petitioner sought such approval in 1972. In the petition, reference is also made to a letter dt. March 9, 1978 (Annexure -9), wherein the Secretary of the Ministry of Tourism had intimated to the President of the Federation of Hotels and Restaurant Associations of India, that the CBDT have accepted that when the Department of Tourism issued certificates approving the hotels, it was the intention of the Department of Tourism to approve the hotels also for the purpose of various sections of the IT Act although those sections were not specifically mentioned in the approval certificates. So, it has been contended that with this clarification given by the CBDT, there should have remained no doubt that the approval granted by the Ministry of Tourism in 1969, to the hotel project of the petitioner should be deemed sufficient for the purpose of the IT Act for getting necessary reliefs under the aforesaid provisions of the said Act.