Remanded

Jai Hanuman Furniture v. the State of Karnataka

Karnataka HC22 Oct 2024WP/105812/2024

Case brief

AI extract

What is this about?

Petitioner challenged 12% Forest Development Tax levy under section 98A of Karnataka Forest Act, relying on AIR 2018 KAR 19. Court stayed demand and refund pending final outcome of pending Writ Appeals before High Court and connected appeals before Supreme Court.

What did the court decide?

Demand, collection, refund of FDT subject to final outcome of pending appeals before High Court and Supreme Court.

Jai Hanuman Furniture Vs the State of… — Pension and Retirement Benefits | Karnataka HC (2024)

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1 - NC: 2024:KHC-D:15260 WP No. 105812 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. 105812 OF 2024 (GM-FOR)

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BETWEEN:

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JAI HANUMAN FURNITURE, BY ITS PROPRIETOR, NARAYAN RAMCHANDRA PATIL, AGE: 56 YEARS, OCC: BUSINESS, R/O. 690/1, N H 4, PB ROAD, NEW GANDHI NAGAR, BELAGAVI-590016.

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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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Location: HIGH MALLIKARJUN COURT OF RUDRAYYA KALMATH KARNATAKA DHARWAD BENCH

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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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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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2 - NC: 2024:KHC-D:15260 WP No. 105812 of 2024

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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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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-A IS CONTRARY TO LAW IN AIR 2018 KAR 19 VIDE ANNEXURE-B AND ETC.,.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS 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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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 hearing, with consent of both the parties, the matter is taken up for final disposal.

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3 - NC: 2024:KHC-D:15260 WP No. 105812 of 2024

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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-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.

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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 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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4 - NC: 2024:KHC-D:15260 WP No. 105812 of 2024

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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 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. 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

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5 - NC: 2024:KHC-D:15260 WP No. 105812 of 2024

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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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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

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6 - NC: 2024:KHC-D:15260 WP No. 105812 of 2024

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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.: 37

Jai Hanuman Furniture v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

Jai Hanuman Furniture v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

What the court decided

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