V. Gopala Gowda, J.
1. These appeals are filed by the State of Karnataka and its officers questioning the correctness of the common order dated 1-6-2006 passed by the learned single Judge in W.P. Nos. 24575/2005, 1280/2006, 2027/2006, 27310/2005, 3773/2006, 557/2006, 181/2006, 26223/2005, 3370/2006, 3554/2006, 27312/2005, 4572/2006 and 4908/2006. The learned single Judge allowed the writ petitions, quashed the impugned endorsements and the assessment orders and held that petitioners are entitled to tax exemption under the Karnataka Sales Tax Act (hereinafter referred to as *KST Act*). The impugned order is challenged urging various grounds and prayed to allow these appeals and to set aside the order of learned single Judge.
2. As per Memo dated 14-8-2008 filed by the learned Addl. Government Advocate, the appeal pertaining to W.P. No. 26233/2005 is de-linked from the batch of these writ appeals.
3. By notification dated 30-12-1993 tax exemption was given under the KST Act to new tourism units. Pursuant to that, exemption certificates were issued by the Director of Tourism. After the Karnataka Value Added Tax Act (hereinafter referred to as KVAT Act), fresh notifications dated 18-4-2005 were issued extending exemption of tax. When the appellants herein applied for exemption certificates, the same were not entertained and endorsements were issued. Consequently, the appellants have been assessed for tax. The appellants challenged the same in writ petitions. The learned single Judge held that since the Government has declared tourism as an 'industry', the hotels are coming under the definition of industry and in view of the fact that notification dated 30-12-1993 is not withdrawn and still in force, they are entitled to the tax exemption under the KST Act. The writ petitions were allowed and the endorsements and assessment orders were quashed. The correctness of the same is under challenge.
4. Learned AGA contended that application of Government Order dated 26-11-1998 to hotel industry to extend the benefit of exemption notification issued under Section 5(2) of the Act is not legally permissible in law. The said provision clearly contemplate a new industrial unit as defined in the notification issued under Section 8-A(1) of KST Act. Therefore, the learned single Judge should not have applied the Government order issued by executive power not traceable to the provisions of the Act, which was issued only for the limited purpose of extending financial assistance to hotel industry which is treated as tourism industry. Therefore, the conclusions arrived at by the learned single Judge in holding that respondents herein are new industrial units and are entitled for exemption from payment of sales tax under Section 5(2) of the Act is contrary to the notification issued under the KST Act. Learned AGA relied upon the decision reported in 13 STC 180 in support of the contention that merely because exemption notification issued under the KST Act can be applied unless there is express or implied repeal is wholly untenable in law. The contention urged on behalf of the respondents that the exemption notification is either express or implied repeal, the same will be inforce and the benefit of the same should be extended to them has been negatived by the Apex Court in the above referred case holding that there can be no estoppel for the state Government against a statute. If law requires that a single tax to be collected, it cannot be given-up. The learned AGA also relied upon the another decision of the Apex Court reported in 1993(2) SCC 674 in support of the legal submission that when the State Legislature is competent to enact KST Act from Entry 54 List II of Seventh Schedule of the Constitution, additional sales tax can be levied in respect of the goods not covered under the said enactment. Therefore, the Supreme Court has held that the State Legislature is not denuded its competence to enact the law from the same entry provided provisions for imposing Tax on the goods, which are not covered in the similar enactment legislated by the State Legislature. The said decision is relied upon by the learned AGA in support of the enactment of the Act in exercise of the State Legislative power under Entry 54, List II of Seventh Schedule. Despite the KST Act, the enactment of the KVAT Act is valid in law and therefore the notification issued under Section 5(2) of the KVAT Act granting exemption in respect of certain new industrial units is permissible in law. Notwithstanding the fact that earlier notification issued under the KST Act in force in the absence of express or implied repeal, the same benefit is not continued under the notification issued under the KVAT Act, unless it is satisfied that respondents are new industries as defined in the notification. Therefore, the reasons assigned by the learned single Judge at paragraphs 8 and 9 holding that notification issued under the KST Act is not repealed and the notification issued under Section 5(2) of the KVAT Act is not applicable to the respondents being tourism industry. That is only an executive order which cannot be applied to the notification issued under Section 5(2) of the Act or Section 8-A(1)of KST Act.
5. Learned Counsel for the respondents strongly justified the findings and reasons of the learned single Judge in the absence of implied or express repeal of exemption notification issued under Section 8-A(1) of the KST Act which has been in force as on the date of notification issued under Section 5(2) of the KVAT Act Therefore, the learned single Judge has rightly made an observation that the action of respondents in taking such a plea is not legal and valid and they are estopped from taking such plea. The learned single Judge rightly applied the government notification of exemption from payment of tax to the department and rightly granted the relief to them. Therefore, it is contended by them that this Court need not interfere with the same as there is no substantial question of law does not arise in these appeals.
6. With reference to the above rival legal contentions urged on behalf of the parties, the following points would arise for our consideration:
i) In the absence of implied or express repeal of the notification dated 30-12-1993 granting exemption from payment of Tax under KST Act by the new Hotel Industries, whether the respondents are entitled to such exemption from pay?
ii) Whether the learned single Judge is right in holding that the State Government is estopped from taking a contention that respondents are not new industrial units and therefore not entitled to tax exemption under Section 5(2) of the KVAT Act?
iii) Whether the learned single Judge is justified in applying the Government Order dated 26-11-1998 to hold that tourism is also declared as industry?
7. All the above points are required to be answered in favour of the State/appellants for the following reasons:
In view of the decision in Polaki Motors v. State of Orissa reported in : 1993 (2) SCC 674, the State has got legislative power under Entry 54, List II of Seventh Schedule of the Constitution to enact the KVAT Act despite the fact that KST Act is in field. The Act is enacted for all goods except the goods mentioned therein. Paragraph 13 of the aforementioned decision is extracted hereunder-
13. The Additional Sales Tax Act as now amended is not a supplement to the original Act, and that it is an independent statute and that the legislative competence would have to be tested as an independent taxing enactment. Even so the impugned Act cannot be held to be beyond the legislative competence. Both these enactments deal with the topic of levy of sales tax on sales or purchases which is within the legislative competence of the State Legislature. Both the levies come under the same topic of taxes on the sale of purchase of goods under Entry 54 List II. Instead of levying the tax under one enactment the State has chosen to levy the same under two different enactments. By choosing some transactions of sale of goods alone for levy of sales tax in the first instance the legislature does not exhaust its legislative power in the field of tax on sale of goods. The law does not require the entire gamut under the topic of tax on sales to be covered in the first or one enactment itself on peril of losing its legislative competence on that topic or field. Legislature may choose certain goods alone or certain dealers or class of dealers alone for purposes of levy. Later certain other goods or dealers or class of dealers may be included in the taxation net or some already in the net omitted. Rates of tax points of taxation and single point and multi point scheme or all subject to legislative changes additions and modifications. xxxxxxxxxxxxx As held by this Court in S. Kodar v. State of Kerala, it is also not necessary that the dealer should be enable to pass on the incidents of the tax on sale to the purchaser in order that it might be a tax on sales of goods. There being no legal or constitutional bar for a combination of single point levy and multi point levy and levying of additional tax, there is no infirmity or constitutional inhibition which would invalidate the impugned validation Act.In view of the aforementioned decision, the enactment of KVAT Act by the State Legislature is Constitutionally legal and valid.
8. In exercise of power under Section 5(2) of the Act the notification dated 18-4-2005 were issued providing exemption under Section 5(2) of the Act in respect of the new industrial units as mentioned in the above notification. The same is in conformity with the provisions of the KVAT Act. The exemption is granted to new industrial units. The phrase 'New Industrial Unit' is borrowed from Section 5(2) of the KVAT Act. Hotel is treated as tourism unit.
9. The contention of the appellants is that 'tourism unit' is not industrial unit'. The contention is tenable and acceptable. To be entitled to the benefit of exemption by the respondents, their units must be industrial unit. This is the statutory requirement under Section 5(2) of the KVAT Act. The learned single Judge has not examined that industrial unit must be registered with the Director of Industries and Commerce. In the instant case, all the respondents are not registered with the Director of Industries and Commerce. Therefore, they cannot claim exemption benefit under Section 5(2) of the KVAT Act and the notification issued under the provisions of the KVAT Act. The learned single Judge is not justified in holding that hotel is also industry as mentioned in the Government Order, which is an executive order passed only for the limited purpose of extending financial assistance to such industrial units from its financial institutions. The Government Order passed by the Executive for a particular purpose cannot be applied to claim tax exemption under KVAT Act, which demies what is new industrial unit under the provisions of the said Act. Therefore, the learned has single Judge committed error in applying the exemption notification issued under KST Act The same ought not to have been applied for tax exemption benefit since the respondents are not new industrial units as defined under the notification issued under the provisions of KVAT Act. They have not registered as such with the Director of Industries and Commerce Department. Therefore, the appellants were justified in issuing the endorsement to them stating that they are not entitled for the benefit of exemption from payment of Tax exemption that was impugned in the writ petitions and the learned single Judge has erroneously quashed the same by wrongly applying the Government order which has no application to the fact situation and further the observation of the learned single Judge that the State Government estopped from taking the plea that the exemption notification not applicable after the notification issued under the provisions of the KVAT Act, suffers from error in law.
10. The learned single Judge is not correct in holding that in the absence of implied or express repeal of the 1993 notification issued under Section 8A(1) of the KST Act, the State Government is estopped from contending that respondents are not entitled to claim tax exemption. Such a contention of the respondents is contrary to the decision in the case of Mathra Parshad and Sons v. The State of Punjab reported in 1962 13 STC 180 relied upon by the learned AGA to contend that there is no promissory estoppel against the Government and the exemption notification applied to respondents/hotels is not legal and valid. For this reason also the impugned order is liable to be set aside.
11. For the reasons stated above, these appeals are allowed and the order passed by the learned single Judge is set aside. The writ petitions are dismissed.