PANAJI
The Bombay High Court at Goa has refused to stay the order of the Goa government which has asked casino operators to pay up the annual recurring fees for the periods during 2020 and 2021 they were ordered to be closed during the pandemic.
The High Court has, however, stayed the directive of the Goa government that imposed a 12% penal interest on the casino operators for having failed to pay the fees so far.
The casino operators, who have challenged the Goa government’s decision to ask them to pay up fees during the periods they were directed to be shut, on account of the pandemic, were seeking interim relief from the court while the petition was being heard.
The Goa government issued an order dated 25/11/2022 specifying that the payment of the unpaid Annual Recurring Fees (ARF) in respect of the periods with effect from 01/04/2020 up to 31/10/2020 and 01/05/2021 up to 30/09/2021, along with 12% penal interest on the delayed payment of ARF, should be paid within a period of 30 days from the date of commencement of this order, i.e. 30.12.2022.
The operators had sought a stay on the implementation of this order pending the final disposal of the petitions.
The casino operators told the court that for the periods between 01/04/2020 to 31/10/2020 and 01/05/2021 to 30/9/2021 (closure periods), the government stopped their casino operations entirely due to the Covid-19 pandemic. They argued that insistence on levying and recovering allegedly unpaid ARF during the closure periods is, ex facie, arbitrary, unreasonable and violative of Article 14 of the Constitution of India.
The casino operators also told the court that barring the closure periods, have cleared the ARF and that even for the period during which there was a partial closure, they have paid the ARF without any demur and sought that the order insisting upon the payment of ARF along with 12% penal interest even during the closure period was ex facie, arbitrary, unreasonable, unconstitutional, null and void.
On the other hand, the State Advocate General told the court that the casino operators were granted some concession on account of the pandemic by extending this period for payment of ARF, which usually needs to be paid by the end of the financial year for the subsequent year. “The State merely specified that the ARF during the closure period must be paid on or before 30 December 2022. Such a concession was adequate in the circumstances; therefore, no case was made to grant any interim reliefs as prayed for or otherwise,” the Advocate General said.
The High Court ruled that the government was prima facie justified in seeking that the fees be paid.
“The casino operators have neither pleaded nor demonstrated how services rendered by the State during the closure period ceased or were reduced, thereby breaching the quid pro quo principle, which they claim is the basis for the levy of fees. In the absence of any clear pleadings and prima facie proof about diminishing of services rendered by the State or regulation to facilitate the Petitioners’ casino operations, it would not be appropriate to restrain the State from recovering the fees some portion of which the Petitioners were even otherwise required to pay before 31 March 2020,” the High Court bench of Justices M S Sonak and Bharat Deshpande ruled.
“An interim order restraining recovery of fees or revenue by the State is not granted on a mere prima facie case without considerations of a balance of convenience or irreparable injury. As they stand, the Statute and the Statutory notifications permit the recovery of the fees. There is no challenge to the Statutory provisions or the 1995 notification as modified from time to time. Choking the State revenues unless a clear case of manifest arbitrariness or unreasonableness is made out at the prima facie stage would not be appropriate. Public interest is a relevant consideration in determining the balance of convenience in such matters,” the High Court also said.
Besides, if the Petitioners succeed, the ARF can always be adjusted towards the subsequent periods. None of the petitioners projected a case of financial ruin or imminent closure of operations if they had to pay the fees under protest.
“At least, the State extended a limited concession to the petitioners by deferring the payment of fees for the closure period up to 31 December 2022. Normally, the grant or refusal of concessions or even the extent to which such privileges could be extended are policy matters. Therefore, at least prima facie, unless the casino operators make out a clear case about their having some right not to pay fees for the closure periods, we do not think that it would be appropriate to stay the recovery of such fees. Moreover, some of such fees were due even before the closure periods,” the High Court said.
“However, the demand for 12% penal interest, at least prima facie, is unjustified. The State having regard to the Covid-19 pandemic itself, extended the period for payment of ARF. In at least 4-5 communications, the State informed the Petitioners that it would specify the dates by which ARF for the closure periods could be paid. Thus, there was no delay as such on the casino operators part in remitting this amount. Moreover, in several communications, the State gave the impression that it was considering at least a deferment. Even the learned Advocate General submitted that deferment was the concession extended to the casino operators to tide over the situation. After all this, at least prima facie, the State was not justified in levying 12% penal interest per annum on the so-called delayed payment of ARF,” the High Court said.
The State has now been given eight weeks to file their replies to the contentions of the casino operators.
