Disposed

Sayema Furniture, v. the State of Karnataka

Karnataka HC22 Oct 2024WP/105808/2024

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed the writ petition challenging the levy of Forest Development Tax at 12% on wood purchases. The court held that the ultimate disposal of the petition depends on the final outcome of related pending appeals before the Hon'ble Supreme Court.

What did the court decide?

The petitioner was granted liberty to rely on the outcome of related Supreme Court appeals before taking further action on the tax demand or refund.

Sayema Furniture, Vs the State of Karnataka — Karnataka HC (2024) — LawSathi Research

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1 - NC: 2024:KHC-D:15259 WP No. 105808 of 2024

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IN THE HIGH COURT OF KARNATAKA

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DHARWAD BENCH

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DATED THIS THE 22^ND DAY OF OCTOBER, 2024

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BEFORE

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THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR

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WRIT PETITION NO. 105808 OF 2024 (GM-FOR)

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BETWEEN:

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SAYEMA FURNITURE, BY ITS PROPRIETOR, ISHRADAHAMED DASTAGIRSAHEB GIRYAL, AGE: 54 YEARS, OCC: BUSINESS, R/O. 776, SHIVA SHAKTI NAGAR, TILAKWADI, BELAGAVI-590006.

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…PETITIONER

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(BY SRI YASH R. NADKARNI, FOR SRI VITTHAL S. TELI, ADVOCATE.)

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AND:

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THE STATE OF KARNATAKA, SECRETARY FOREST, ECOLOGY AND ENVIRONMENT, AT 7^TH FLOOR, ARANYA BHAVAN, 18^TH CROSS, MALLESHWARAM, BENGALURU.

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Location: HIGH MALLIKARJUN COURT OF RUDRAYYA KALMATH KARNATAKA DHARWAD BENCH

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THE CHIEF PRINCIPAL CONSERVATOR OF FORESTS, ARANYA BHAVAN, 18^TH CROSS, MALLESHWARAM, BENGALURU-560001.

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THE DEPUTY CONSERVATOR OF FOREST, YALLAPUR-DIVISION, YELLAPUR, KARWAR-581359.

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…RESPONDENTS

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(BY SRI JAYARAM SIDDI, HCGP.)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO:

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2 - NC: 2024:KHC-D:15259 WP No. 105808 of 2024

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I) 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;

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II) ISSUE A WRIT OF CENTERIOR OR ORDER QUASHING BY LEVYING OF FOREST DEVELOPMENT TAX/FEES AT 12% AS PER SALE INTIMATING LETTER OF PERIOD OF AUCTION DATED 23/08/2024 ISSUED BY THE RESPONDENT NO.3 VIDE ANNEXURE “D” IS CONTRARY TO AIR 2018 KAR 19 VIDE ANNEXURE-E;

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III) ISSUE A WRIT IN THE NATURE OF MANDAMUS DIRECTION THE RESPONDENTS REFUND THE 12% FDT COLLECTED ON

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SL.NO	SALE	INTIMATION LET AUCTION	TER/PER	IOD OF	ANNEXURE
1.	TAX 27/11	INVOICE/SALE /2018	BILL	DATED	“A”
2.	TAX 06/11	INVOICE/SALE /2019	BILL	DATED	“B”
3.	TAX 18/03	INVOICE/SALE /2024	BILL	DATED	“C”

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IV) ISSUE ANY OTHER WRIT OR DIRECTION AS DEEM FIT BY THIS HON’BLE COURT IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS

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DAY, THE COURT MADE THE FOLLOWING:

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ORAL ORDER

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(PER: THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR)

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Learned HCGP is directed to take notice for

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respondents No.1 to 3.

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3 - NC: 2024:KHC-D:15259 WP No. 105808 of 2024

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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.

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Though this matter is listed for preliminary

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hearing, with consent of both the parties, the matter is taken up for final disposal.

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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-D 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.

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The petitioner is engaged in doing 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

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4 - NC: 2024:KHC-D:15259 WP No. 105808 of 2024

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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.

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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

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Kar 8620, wherein it was held that the petitioners therein lease holders/quarry owners in the forest area are not liable to pay FDT.

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In the case of B.Rudragouda (supra), it came

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to be held that levy of forest development fee by naming it as FDT was illegal and accordingly directed to refund.

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5 - NC: 2024:KHC-D:15259 WP No. 105808 of 2024

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Therefore the petitioner on the basis of the above judgment, seeks for refund of the FDT/Fee.

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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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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.

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6 - NC: 2024:KHC-D:15259 WP No. 105808 of 2024

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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.

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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.

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Sd/(PRADEEP SINGH YERUR) JUDGE

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MRK CT-MCK List No.: 1 Sl No.: 36

Sayema Furniture, v. the State of Karnataka

Case brief

What is this about?

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Sayema Furniture, v. the State of Karnataka

Case brief

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