The Hindu : Karnataka / Bangalore News : Court levies Rs. 1 lakh on Sanjay Khan’s resort

Online edition of India's National Newspaper
Thursday, Nov 29, 2007
ePaper

Karnataka

Karnataka - Bangalore

Court levies Rs. 1 lakh on Sanjay Khan’s resort

Staff Reporter

BANGALORE: The Karnataka High Court on Wednesday came down heavily on World Resorts Ltd, of which film actor and producer Sanjay Khan is one of the directors. The court levied Rs. 1 lakh on the company and directed the State Government to inquire into the conduct of some officials who are responsible for not realising Rs. 20.3 crore tax which is due from the company to the State.

Dismissing World Resorts’ petition for staying the notices issued by the Department of Commercial Tax for collection of tax for 2002-03 and 2003-04, Justice D.V. Shylendra Kumar said there appeared to be collusion between some officials and the company and that this had led to non-realisation of the tax amount.

Mr. Sanjay Khan, along with his wife Zarine Khan and daughter, Farah Khan, and eight others, had moved the High Court after the Department of Commercial Tax issued notices under Section 14 of the Karnataka Sales Tax and under Section 8 A of the Luxury Tax.

In its notices the authorities said they were rejecting the resort’s claim for extending to it the benefits of the Tourism policy.

Challenging these notices before the court, World Resorts said it had set up a Rs. 145 crore centre at Nagarur village, in Dasanapura hobli off Tumkur Road, on the outskirts of Bangalore. It said it had shown interest in setting up the project in Karnataka after the State came up with a tourism policy on May 30, 1992. The State had subsequently issued an order prescribing certain guidelines for the companies to claim benefits under the tourism policy.

World Resorts said it was incorporated as a company based in Bangalore on April 27, 1995. It said on October 27, 2003, it made an application to the then Chief Minister, requesting him to consider its plea for deferring the collection of luxury tax and sales tax.

On October 30, 2003, the State issued notices by the Assessing Authority under the Sales Tax Act asking World Resorts to pay sales tax arrears for 2002-03 and 2003-04. On May 5, 2004, World Resorts received a communication from the office of the then Chief Minister, saying that its request to be given benefits under the tourism policy is under consideration. On June 23, 2004, the company gave a similar representation to the Deputy Chief Minister and the Finance Minister.

It said on July 30, 2004, the Assessing Authority once again issued notices to it under the provisions of the Sales Tax Act and Luxury Act. On February 8, 2005, the State intimated to World Resorts that its claim for benefits under the tourism policy has been rejected. Subsequently, the authorities on November 30, 2005 issued “Ganishee” notices and seized the company’s bank accounts. The company then moved the High Court for relief.

Additional Government Advocate, Nilofour Akbar, contested the claims of the resort and urged the court to dismiss the petition. She submitted that World Resorts had not followed all the procedures prescribed under the tourism policy for claiming benefits. Besides, certificates to avail of benefits under the sales tax and luxury tax Acts were not obtained. Dismissing its petition, Justice Shylendra Kumar levied costs of Rs. 1 lakh on World Resorts.

Printer friendly page
Send this article to Friends by E-Mail

Karnataka