Govt cannot take back tax incentives

The Supreme Court has stated that the government which granted tax concessions to industries could not withdraw them with retrospective effect. The court stated so in the case of Kusumam Hotels Ltd vs Kerala Electricity Board. Tourism was declared industry by the government and various concessions were given to the hotels run by the company. The electricity board was also asked by the government to grant tariff concessions. Since the board was running at a loss, the industrial tariff benefits granted to the hotels were cancelled with retrospective effect and the hotels were reclassified. The hotels challenged it in the high court but could not get adequate relief. The Supreme Court now declared that the government order would operate only prospectively. – www.business-standard.com