Karnataka High Court
Shree /Sri Mahalaxmi Industries vs The Chief Principal Conservator on 10 February, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2025:KHC-D:2578
WP No. 100846 of 2025
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 10TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
WRIT PETITION NO.100846 OF 2025 (GM-FOR)
BETWEEN:
SHREE/SRI MAHALAXMI INDUSTRIES,
BY ITS PROPRIETOR RATNABAL
DATTREY KOTETAR,
R/O: 2ND CROSS, KARWAR ROAD,
SHRI NAGAR, HUBBALLI,
DIST: DHARWAD - 580 028.
...PETITIONER
(BY SRI VITTHAL S. TELI, ADVOCATE)
AND:
1. THE CHIEF PRINCIPAL CONSERVATOR OF
FORESTS, ARANYA BHAVAN,
18TH CROSS, MALLESHWARAM,
BENGALURU - 560 0001.
Digitally signed by
VISHAL NINGAPPA
PATTIHAL
Location: High
Court of Karnataka, 2. THE DEPUTY CONSERVATOR OF FOREST
Dharwad Bench,
Dharwad YALLAPUR - DIVISION, YELLAPUR,
KARWAR - 581 359.
3. THE ASSISTANT CONSERVATOR OF
FOREST GOVERNMENT TIMBER DEPOT,
MUNDGOD,
UTTARA KANNADA - 581 349.
4. THE DEPUTY CONSERVATOR OF FOREST,
SIRSI DIVISION, SIRSI,
KARWAR - 581 359.
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WP No. 100846 of 2025
5. THE ASSISTANT CONSERVATOR OF FOREST,
GOVERNMENT TIMBER DEPOT,
MUNDGOD,
UTTAR KANNADA - 581 349.
...RESPONDENTS
(BY SRI SHARAD V. MAGADUM, AGA)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO, ISSUE
WRIT IN THE NATURE DECLARATION OR DIRECTION THAT THE
LEVYING FOREST DEVELOPMENT TAX/FEES UNDER SECTION
98A OF THE KARNATAKA FOREST ACT BY THE RESPONDENTS IS
CONTRARY TO LAW DECLARE BY THIS
HON'BLE COURT IN AIR 2018 KAR 19. ISSUE A WRIT OF
CENTERIOR OR ORDER QUASHING BY THE LEVYING OF FOREST
DEVELOPMENT TAX/FEES AT 12% ON PURCHASE FOREST
PRODUCTS AS PER SALE INTIMATING LETTER OF PERIOD OF
AUCTION DATED 25/11/2024 VIDE "K" ISSUED BY THE
RESPONDENT NO.2 AND 3 IS ILLEGAL, ARBITRARY, CONTRARY
AIR 2018 KAR 19 VIDE ANNEXURE-"L". ISSUE A WRIT IN THE
NATURE OF MANDAMUS OR DIRECTION DIRECTING THE
RESPONDENTS TO REFUND 12% FDT/F COLLECTED AS PER
Sl. Sale intimation Letter/Period of Auction Annexure
No.
1. Tax Invoice/Sale Bill Dated 14/12/2020 "A"
2. Tax Invoice/Sale Bill Dated 14/12/2020 "B"
3. Tax Invoice/Sale Bill Dated 17/12/2020 "C"
4. Tax Invoice/Sale Bill Dated 17/12/2020 "D"
5. Tax Invoice/Sale Bill Dated 01/09/2021 "E"
6. Tax Invoice/Sale Bill Dated 06/09/2021 "F"
7. Tax Invoice/Sale Bill Dated 16/12/2021 "G"
8. Tax Invoice/Sale Bill Dated 08/08/2023 "H"
9. Tax Invoice/Sale Bill Dated 08/08/2023 "J"
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WP No. 100846 of 2025
THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
ORAL ORDER
(PER: THE HON'BLE MR. JUSTICE M.NAGAPRASANNA)
1. Learned counsel appearing for the parties in
unison would submit that, the issue in the lis stands
answered by the Coordinate Bench of this Court in W.P.
No.105812/2024, disposed of on 22nd October 2024. The
Coordinate Bench held as follows:
"Learned HCGP is directed to take notice for
respondents No.1 to 3.
2. Heard the learned counsel Sri Yash
Nadakarni, on behalf of the petitioner along with Sri
Vittal S. Teli and learned HCGP for respondents No.1
to 3.
3. Though this matter is listed for
preliminary hearing, with consent of both the
parties, the matter is taken up for final disposal.
4. The petitioner is seeking to quash the
levy of Forest Development Tax (FDT)/Fees at 12%
as per sale intimating letter of period of auction
issued by respondent No.3, vide Annexure-A along
with seeking a declaration to declare that levying of
FDT/Fee under section 98A of the Karnataka Forest
Act by respondents to be contrary to law and for a
writ of mandamus for a direction to the
respondents to refund the 12% FDT/Fees collected.
5. The petitioner is engaged in doing
NC: 2025:KHC-D:2578
business in wooden products i.e., purchase of wood
from respondents and resale the wood to local
sawmills and manufacturing wooden articles such as
sofa set, dining table, doors and other wooden
products. The petitioner purchased fire wood from
the respondents by several invoices. The levy of tax
of Forest Development Tax at 12% is what is
questioned by the petitioner on the ground that it is
contrary to law and also contrary to the judgment
rendered by this Court in the case of
B.Rudragouda vs. State of Karnataka and
others, reported in AIR 2018 KAR 19.
6. Learned counsel for the petitioner relies
on the judgment of this Court in B.Rudragouda
(supra), whereby this Court has held section 98A
of the Karnataka Forest Act to be ultra vires to the
Constitution of India. Learned counsel also relies
upon the judgment in the case of National Mineral
Development Corporation Limited vs. State of
Karnataka and another, reported in 2015 SCC
Online Kar 8620, wherein it was held that the
petitioners therein lease holders/quarry owners in
the forest area are not liable to pay FDT.
7. In the case of B.Rudragouda (supra),
it came to be held that levy of forest development
fee by naming it as FDT was illegal and accordingly
directed to refund. Therefore the petitioner on the
basis of the above judgment, seeks for refund of the
FDT/Fee.
8. Learned HCGP representing the
respondent State sustains the order passed by the
authorities and contends that the judgment in the
case of B.Rudragouda (supra) has been challenged
before the Hon'ble Apex Court in SLP (Civil)
Nos.4329-4386/2018 and an interim order
against refund order of FDT was granted. Therefore
contended that the out come of the matters before
the Hon'ble Supreme Court would decide the matters
herein.
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9. In the present case the petitioner is
challenging the collection of FDT on purchase of
timber/wood. It is not in dispute that in the case of
B.Rudragouda (supra), the collection of FDT
referable to Chapter-XI-A of the Act inserting
section 98-A and B of the Act came to be declared
as ultra vires. Though it is challenged before the
Hon'ble Apex Court, the decision is not stayed and
the interim order is granted only against refund.
10. In view of the above, this writ petition
is disposed of holding demand, collection and refund
of FDT would be subject to final outcome of
W.A.No.743/2021 and connected matters pending
before this Court and C.A.Nos.3974-4068/2016
and C.A.Nos.3214-3271/2018, pending before the
Hon'ble Supreme Court.
11. The respondents would be at liberty to
take further action only after disposal of the
said matters by issuing fresh demand of tax or take
action so far as the petitioner is concerned,
wherever the FDT is already collected by the
respondents."
2. In the light of the issue standing covered by the
judgment passed by the Co-ordinate Bench of this Court
(supra), on all its fours and on the same reasons, the
subject petition also stands disposed.
Sd/-
(M.NAGAPRASANNA)
JUDGE
VNP/CT-ASC
