Tourism in Rajasthan Is An Industry - Not A Commercial Activity

"Tourism" was officially declared an "Industry" vide a Government of

Rajasthan Notification (Industries Group - I) No. F.12 (4)/ Ind/ I/ 85
Dated 4th March 1989. (Annexure 1).

Note: This Notification has not been withdrawn or amended in any way whatsoever.

Separate departments may have interpreted the above-mentioned

notification in different ways; but the Finance Ministry, Government of
Rajasthan; clarified and endorsed it beyond doubt vide its Notification
(Finance) No. P. 5 (48) Finance/ Tax/ 2010 Dated 24th December
2010. Originating in, explicitly referring to and pro-actively following up on
the above-mentioned Notification dated 4/3/1989 - it unequivocally directs
Stamp Duty Collectors to "Value Tourism Units at Industrial Rates". (Annexure
2).

Note: This Notification has not been withdrawn, questioned or amended by the
Department of Stamps in any way whatsoever.

This was preceded and as clearly notified vide Government of Rajasthan

Notification (Revenue - Group VI) Department No. F. 6 (6) Rev.6/ 92/
Pt./14 Dated 2nd April 2007; which laid down "Rules for Conversion of
Agricultural Land for Non-Agricultural Purposes in Rural Areas, 2007".
(Annexure 3)

In this above-mentioned Notification dt. 2/4/2007 the (Definition) Clause 2 (b)

'Commercial purpose'; makes it explicitly clear that 'Tourism Units' are not
included in it.
Clause 2 (g) 'Industrial purpose'; further confirms this by explicitly including
'Tourism Unit' in it.

'The Rajasthan Investment Promotion Schemes (RIPs) 2003, 2010 &

2014 have all made it abundantly clear in many different ways that Tourism
is indeed an Industry.

RIPs 2014 (Annexure 4)

Clause 2 (Definitions) (xxxviii); Tourism Sector means (b) "a Heritage Hotel,
certified as much by the Ministry of Tourism, Government of India, and/or by the
Department of Tourism, Government of Rajasthan.
Clause 9.1: "Notwithstanding anything contained in the Scheme, the State
Government may grant a special package of incentives and exemptions, which may
be over and above incentives and exemptions under Clauses 4 to 7 to a
manufacturing enterprise in a 'Thrust Sector' in addition to the thrust sectors
mentioned in sub-clauses 9.3 to 9.12
Clause 9.12 Tourism Sector
9.12.1 Enterprises of the Tourism Sector covered under sub-clause (a) and (b) of
Clause 2 (xxxviii) of the Scheme shall be granted the following benefits...
Note: Not only has the Tourism Sector been included in three successive RIPS; it has
been designated as a "Thrust Sector" in RIPs 2014. Furthermore, it may be noted
that these relevant sections have been, for the obvious reason of inviting
investment, explicitly included as Annex - 1 in the far-sighted and progressive
'Rajasthan Tourism Unit Policy 2015'. It may also be noted that the petitioner
'Walled City Hotels Pvt. Ltd.' has itself availed of benefits (in 2009) under RIPs 2003
for its Heritage Hotel Project in Jodhpur.

The 'Tourism Unit Policy 2007' and the 'Rajasthan Tourism Unit Policy
2015' have both made it clear in many different ways that Tourism is indeed
an Industry.

Rajasthan Tourism Unit Policy 2015 (Annexure 5)

Clause 4 (E) Permissible Area for Commercial Use by Heritage Properties:

Heritage hotels can commercially convert maximum of 1000 Sq. Meters or 10% of
plinth area of the existing heritage building, whichever is less.
Clause 4 (H) Urban Development Tax; For Heritage Hotels, UD Tax shall be
charged on Residential Rates on the built-up area but there will be no UD Tax on
open area.
Note: Clause 4 (E) above makes it abundantly clear that Heritage Hotels are NOT
Commercial. Whether they be Residential (Abadi) or Industrial is a moot point.
Furthermore, in the spirit of 4 (H) above, it should follow that Heritage Hotels in
Rural Areas are, in fact, Residential (Abadi) - and definitely NOT Commercial.

This - that Heritage Hotels are not Commercial and may even be considered
Agricultural/Residential (Abadi) is further endorsed by the Government of
Rajasthan Notification (Revenue - Group - 6) No. F. 11 (4) Rev6/2014/17 Dated 22nd May 2015 - making rules amending the 'Rajasthan
Industrial Areas Allotment Rules 1959'.

Clause 5 Insertion of new rule 3B: (2); The reserve price for allotment of land
set apart and reserved for Tourism Units shall be equal to the rates recommended
for assessment of market value of Agricultural Land by District Level Committee
under Rule 58 of the Rajasthan Stamp Rules, 2004.
Note: Since this excerpt has been thoughtfully included by the Government of
Rajasthan in the 'Rajasthan Tourism Unit Policy 2015' as Annex - 2 - it seems
obvious that in its pursuit of investment in the Tourism Sector, the State
Government is valuing Land at Agricultural DLC Rates - not Industrial or
Commercial. When the Government is itself allotting Agricultural Land to Tourism
Units at Agricultural Rates, the question of valuing it at Commercial Rates for others
does not arise. The bogey of "loss of Revenue to the State Exchequer" is unfair,
discriminatory and probably illegal in the eyes of natural justice.

Why The Land attached to Devigarh Heritage Hotel Should Be Valued At

Industrial Rates; And Not Commercial, For The Purpose Of Stamp Duty
Besides the points of law and policy enumerated and described above, the following
specific points with regard to Devigarh Heritage Hotel may be noted.

The Devigarh Heritage Hotel Project was duly approved by the Ministry of
Tourism, Government of India vide Letter (File) No. 5. TH. I (42)/96 Dated 4th
August 1997. (Annexure 6).

The Devigarh Heritage Hotel, Village Delwara, Tehsil Nathdwara, District

Rajsamand, has been "Classified" as a "Heritage Hotel" (Category Basic - 39
Rooms) by the Ministry of Tourism, Government of India; most recently
renewed to 20th April 2019 vide Ministry of Tourism, Government of India
Letter No. 27 - HRACC (12)/2013 Dated 9th May 2014. (Annexure 7)

The Devigarh Heritage Hotel is therefore a "Tourism Unit" as defined by all

Departments and in all the Policies and Schemes of the Government of
Rajasthan; and is therefore eligible to secure benefits under any and all of
them.

Agricultural Land being used by the Devigarh Heritage Hotel was duly
converted for "Industrial Use" as far back as 1998 and all charges fully paid.
(Annexure 8)

In connection with the above-mentioned land conversions, Letter (File) No. 5.

TH. 1 (42)/ 96 dated 11th September 1998 (Annexure 9) from the Ministry of
Tourism, Government of India to the District Collector Rajsamand, may be
quoted, "...Since hotels are categorized as Industries in Rajasthan
and the promoters have invested lot of money in the project and
have also taken a loan from TFCI also it is requested that a Land Use
Certificate ie. the conversion of land from agricultural to industrial

purpose may be issued to them at the earliest." Sd - Shri. MK Khanna,

Additional Director General, Dept. of Tourism, Government of India.

It may be noted from the above-mentioned letter that the District Collector,
Rajsamand had himself sought a "recommendation" in this regard from the
Ministry of Tourism, Government of India, which was duly given in no
uncertain terms. The Governments of both India and Rajasthan were thus
fully aware that the afore-said land sought to be converted was for use by
and for a Heritage Hotel (Tourism Unit).

PRAYER
On 29th January 2015 the DIG Stamps, Udaipur, Sh. KC Lakhara issued us (Walled
City Hotels Pvt. Ltd) 8 (Eight) Notices valuing the Land attached to Devigarh
Heritage Hotel on a "Commercial" basis with the prevailing Commercial DLC Rates.
(Annexure 10).
Since this Commercial Valuation was computed on the premise that the land is
being used by and for a "Hotel", we are aggrieved by the DIG's viewpoint as it is in
direct contradiction to the letter and spirit of all the above-stated policies of the
Government of Rajasthan.
(The DIG has used Para 11 of Notification (Finance Department) No. F 4 (4)
FD/Tax/2015-226 Dated 9th March 2015 to arrive at a "Commercial Valuation".
The afore-said Para 11 states, "On sale or transfer of land which is being put to a
different use than its approved land use, with or without approval of competent
authority, the rate of such land or part thereof, shall be equal to the rates of the
category of its actual use." The point is that the land IS being used by and for its
"Approved Use", which is a Heritage Hotel (Tourism Unit) - and in no Policy
Document since 1989 has a recognized Tourism Unit deemed to be engaged in
"Commercial Activity".)
Therefore; since this is above all a matter of due recognition of "Tourism as an
Industry", and especially because the DIG has himself on several occasions sought
clarification; it is our humble prayer to the Honorable Minister for Industries, Sh.
Gajendra Singhji Khimsar, that a clarification or directive be communicated to the
concerned Department or Officer, as may be deemed fit.
The Stamps Department is an arm of the Government (Executive) and the Stamp
Collector is quasi-judicial not Judicial; as such, clarifications and directives may be
passed from time to time and case by case.
In this regard Clause 13 of the 'Rajasthan Tourism Unit Policy 2015' maybe
quoted in full.
Clause 13. Implementation of the Policy; "In case concerned Departments
require amendments in their respective rules/sub-rules and notifications
for implementation of this Policy, the same can be done after obtaining
approval of Honorable Chief Minister, Rajasthan, who has been authorized
in this regard by the Cabinet Order No. 103/2015 dated 18/5/2015."

Humbly Submitted By

Dhananajaya Singh
Narpat Niwas, Jodhpur.
dhananajaya@gmail.com

Director, Walled City Hotels Pvt. Ltd.

Mobile: 9829052000

Email:

All the plots details converted to Industrial Use

Depreciation 50% (Finance Notification dt 9/3/2015 F (4) 4 Finance/Tax/2015226