Karnataka High Court
Samarth Tradesrs vs The State Of Karnataka on 25 July, 2024
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NC: 2024:KHC-D:10577
WP No. 104423 of 2024
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 25TH DAY OF JULY, 2024
BEFORE
THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO. 104423 OF 2024 (GM-FOR)
BETWEEN:
SAMARTH TRADERS,
PROPRIETARY CONCERN,
AT BASAVANGALLI DESUR,
TALUK: KHANAPUR, DIST: BELAGAVI,
BY IS PROPRIETOR
YALAPPA HIRAMANI SAWANT,
AGED ABOUT 50 YEARS, OCC: BUSINESS,
R/O. BVANGALLI DESUR, BELAGAVI.
...PETITIONER
(BY SRI. MALLIKARJUNSWAMY B. HIREMATH, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA,
BY ITS SECRETARY,
DEPARTMENT OF FOREST,
M.S. BUILDING, AMBEDKAR VEEDHI,
BENGALURU-560001.
2. THE PRINCIPAL CHIEF CONSERVATOR OF FOREST,
YASHAVANT
ARANYA BHAVAN, 4TH CROSS, MALLESHWARAM,
NARAYANKAR BENGALURU-560003.
Digitally signed by
YASHAVANT NARAYANKAR
Location: HIGH COURT OF
KARNATAKA, DHARWAD
BENCH
3. THE DEPUTY CONSERVATOR OF FOREST,
Date: 2024.07.27 12:03:41
+0530
YELLAPUR DIVISION, YELLAPUR,
TALUK: YELLAPUR, DIST: UTTAR KANNADA-581329.
4. THE ASSISTAT CONSERVATOR OF FOREST,
GOVT, TIMBER DEPOT, TALUK: YELLAPUR,
DIST: UTTAR KANNADA-581325.
...RESPONDENTS
(BY SRI. V.S. KALASURMATH, HCGP)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE
NATURE OF CERTIORARI BY QUASHING THE SALE INTIMATION
LETTER/SALE BILL/TAX INVOICE ISSUED BY THE RESPONDENT NO.3
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NC: 2024:KHC-D:10577
WP No. 104423 of 2024
AND 4 DATED 18.03.2024 INSOFAR AS 12% FOREST DEVELOPMENT
TAX IS CONCERNED, THE SAID COPIES ARE PRODUCED AT
ANNEXURE-B; ISSUE A WRIT OF MANDAMUS DIRECTING
RESPONDENTS TO REFUND FOREST DEVELOPMENT TAX COLLECTED
AT THE RATE OF 12% I.E., PASS SUCH OTHER WRIT OR ORDERS
OR DIRECTION MAY DEEM FIT UNDER THE FACTS AND
CIRCUMSTANCES OF THE CASE, BE ISSUED IN THE INTEREST OF
JUSTICE.
THIS PETITION IS COMING ON FOR PRELIMINARY HEARING
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
1. The petitioner has filed the present petition challenging the action of the respondents in collecting Forest Development Tax (FDT) on the purchase of timber.
2. The Co-ordinate Bench of this Court, in its judgment dated 23.04.2024 in W.P.No.101820/2024 and connected matters, held that the demand, collection, and refund of FDT would be subject to the final outcome of W.A.No.743/2021 and related cases pending before this Court. Relevant paragraphs from the judgment are as follows:
"3. It was submitted, B.Rudragouda Vs. State of Karnataka and others1, wherein there was specific challenge against constitutional validity of Act no.23 of 2016 amending Chapter XI-A of Act, this Court declared amendment to be ultra vires Constitution of India. It was observed, levy of Forest 1 2017 SCC OnLine Kar 2785 -3- NC: 2024:KHC-D:10577 WP No. 104423 of 2024 Development Fee (for short 'FDF') by naming it as tax (FDT) was illegal and accordingly directed refund.
4. Main grounds of challenge are that though respondent-State had challenged Judgment in B.Rudragouda's case before Hon'ble Apex Court in SLP (Civil) no.4329-4386/2018, interim order granted was only insofar as refund of tax and not judgment. Further, in W.P.no.38941/2018, this Court by order dated 29.08.2019 quashed invoices demanding FDT after decision in NMDC Mineral Development Corporation Ltd., Vs. State of Karnataka and another2 and B.Rudragouda's cases, by holding same to be illegal. In view of above it was contended that demand and levy of FDT was illegal and sought for quashing. It was submitted, in few cases petitioners had already paid FDT and on above grounds were seeking refund thereof."
3. Sri V.S.Kalasurmath, learned HCGP contended that the decision in the NMDC case is under challenge before the Hon'ble Supreme Court in SLA(C) Nos.6219-6313/2016 [C.A.No.3974-4068/2016] while the decision in B. Rudragouda's case is under challenge in SLP (Civil) No. 4329-4386/2018 [C.A.No.3214-3271/2018] with an interim order against refund of FDT. The decision in W.P.No.38941/2018 is also under challenge in W.A.No.743/2021, with an interim order against the demand/collection of FDT/FDF.
2 2015 SCC OnLine Kar 8620 -4- NC: 2024:KHC-D:10577 WP No. 104423 of 2024
4. After hearing learned counsel and reviewing the writ petition records, it is clear that petitioners are challenging the demand and collection of FDT on timber purchases. There is no dispute that the demand/collection of FDT refers to Chapter XI-A inserting Sections 98-A and B of the Act, declared ultra vires in B. Rudragouda's case. Although challenged before the Hon'ble Apex Court, the decision is not stayed, and the interim order applies only to refunds. Similarly, an interim order exists against the demand and collection of FDT in the appeal against the decision in W.P.No.38941/2018.
5. Given the above, it is prudent to dispose of these matters, holding that the demand, collection, and refund of FDT are subject to the final outcomes of W.A.No.743/2021 and connected cases pending before this Court, and C.A.No.3974-4068/2016 and C.A.No.3214-3271/2018 pending before the Hon'ble Supreme Court. Respondent authorities should take further action only after these matters are resolved, issuing fresh demands or processing refunds where FDT has already been collected. -5-
NC: 2024:KHC-D:10577 WP No. 104423 of 2024
6. In light of the Co-ordinate Bench's view in W.P.No.101820/ 2024, this Court is not inclined to take a contrary position. Accordingly, this writ petition is disposed of, holding that the demand, collection, and refund of FDT will be subject to the final outcome of W.A.No.743/2021 and related cases pending before this Court, and C.A.No.3974- 4068/2016 and C.A.No.3214-3271/2018 pending before the Hon'ble Supreme Court.
7. It is needless to mention that respondent authorities can take further action only after these matters are resolved, by issuing fresh demands or taking action for refunds where FDT has already been collected from the petitioners.
ORDER
i) The writ petition is allowed.
ii) The demand, collection, and refund of Forest Development Tax (FDT) are to be subject to the final outcome of W.A.No.743/2021 and related matters pending before this Court, and C.A.No.3974-4068/2016 and C.A.No.3214- 3271/2018 pending before the Hon'ble Supreme Court.
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iii) Respondent authorities shall take further action only after the disposal of the aforementioned cases, either by issuing fresh demands or processing refunds where FDT has already been collected from the petitioners.
Sd/-
JUDGE AM List No.: 2 Sl No.: 6