Disposed

Shri. Premanand S/O Vishnu Gavas v. the State of Karnataka

Karnataka HC12 Sept 2024WP/112152/2017

Case brief

AI extract

What is this about?

A writ petition challenging the levy of Forest Development Tax by the State Forest Department was disposed of. The Court held that the legality of the demand and collection is subject to the final outcome of pending appeals before the Supreme Court and this Court regarding the constitutional validity of the tax.

What did the court decide?

The petition is disposed of; demand, collection and refund of FDT are subject to final outcome of pending matters in Supreme Court and this Court.

Shri. Premanand S/O Vishnu Gavas Vs the State of… — Writ and Judicial Review | Karnataka HC (2024)

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1 - NC: 2024:KHC-D:13059 WP No. 112152 of 2017

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 12^TH DAY OF SEPTEMBER, 2024 BEFORE

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THE HON'BLE MR. JUSTICE H.P.SANDESH WRIT PETITION NO. 112152 OF 2017 (GM-TEN)

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BETWEEN:

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SHRI. PREMANAND S/O. VISHNU GAVAS, AGE: 45 YEARS, OCC: CARPENTRY, R/O: OPP INDOOR STADIUM, TOWN POLICE STATION ROAD, SUBHASH NAGAR, DANDELI-581325, TQ: HALIYAL DIST: UTTAR KANNADA.

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SHRI DEEPAK S/O. NANDU NAIK, AGE: 42 YEARS, OCC: CARPENTRY, R/O: TOWNSHIP, DANDELI-581325 TQ: HALIYAL, DIST: UTTAR KANNADA.

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SHRI IRFAN S/O. ABDULLA KHAN LOHANI, AGE: 42 YEARS, OCC: CARPENTRY, R/O: HASSANMAD, DANDELI-581325, TQ: HALIYAL, DIST: UTTAR KANNADA.

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SAROJA HANGARAKI

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Location: HIGH COURT OF KARANTAKA DHARWAD BENCH

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SHRI SALAUDDIN S/O. ANWAR AHAMED QHADRI, AGE: 34 YEARS, OCC: CARPENTRY, R/O: BOMBAY CHAWL, DANDELI-581325 TQ: HALIYAL, DIST: UTTAR KANNADA.

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SHRI SAYED AKRAM S/O. SAYED HUSAIN SAB MULLA, AGE: 60 YEARS, OCC: CARPENTRY, R/O: MARUTHI NAGAR, DANDELI-581325, TQ: HALIYAL, DIST: UTTAR KANNADA.

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SHRI RAFIQ AHMED S/O. YUSUF KHAN, AGE: 36 YEARS, OCC: CARPENTRY, R/O: GANDHI NAGAR, DANDELI-581325, TQ: HALIYAL, DIST: UTTAR KANNADA.

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2 - NC: 2024:KHC-D:13059 WP No. 112152 of 2017

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SHRI MOULASAB S/O. KASHIMSAB HUNGUND, AGE: 40 YEARS, OCC: CARPENTRY, R/O: 14^TH BLOCK, TOWNSHIP, DANDELI-581325, TQ: HALIYAL, DIST: UTTAR KANNADA.

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SHRI GANGADHAR S/O. RAMANNA GUNJIKAR, AGE: 37 YEARS, OCC: CARPENTRY, R/O: OPP BUS STAND, J.N. ROAD, DANDELI-581325, TQ: HALIYAL, DIST: UTTAR KANNADA.

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…PETITIONERS

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(BY SRI. SHIVARAJ S. BALLOLI, ADVOCATE)

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AND:

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THE STATE OF KARNATAKA, REPRESENTED BY IS SECRETARY, FOREST DEPARTMENT, M.S. BUILDING, AMBEDKAR VEEDHI, BANGALORE-560001.

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THE DEPUTY CONSERVATOR OF FORESTS, HALIYAL DIVISION, HALIYAL-581329, TQ: HALIYAL, DIST: UTTAR KANNADA.

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THE ASSISTANT CONSERVATOR OF FOREST, GOVERNMENT TIMBER DEPOT, DANDELI-581325, TAL: HALIYAL, DIST: UTTAR KANNADA.

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…RESPONDENTS

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(BY SRI. PRAVEEN K. UPPAR, AGA FOR R1-R3)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT OF CERTIORARI QUASHING THE IMPUGNED E-TENDER CUM AUCTION NOTIFICATION BEARING NO.B5/DTS/DEC-2017/MSTC/CR-09/201718, DATED 29.11.2017 ISSUED BY 2^ND RESPONDENT VIDE ANNEXURE-B AND ETC.

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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3 - NC: 2024:KHC-D:13059 WP No. 112152 of 2017

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ORAL ORDER

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(PER: THE HON'BLE MR. JUSTICE H.P.SANDESH)

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This writ petition involve question of law i.e., challenge of demand, levy and collection of Forest Development Tax (for short ‘FDT’) by respondent State/Forest Authorities on purchases of timber by petitioners.

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Learned counsel for the petitioners submits that petitioners were regularly purchasing timber from Forest Department by participating in e-auctions. It is submitted that the respondents introduced amendments to Karnataka Forest Act, 1963 (for short ‘Act’) by inserting Chapter XI-A and adding Sections 98-A and 98-B of Act providing for levy of FDT. However, said provisions came to be challenged before this Court in National Mineral Development Corporation Limited Vs. State of Karnataka and Another (‘NMDC’ for short) reported in 2015 SCC OnLine Kar 8620, wherein it was held that

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4 - NC: 2024:KHC-D:13059 WP No. 112152 of 2017

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petitioners lease holders/quari owners in forest areas as not liable to pay FDT.

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3. It is submitted that, B.Rudragouda Vs State

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of Karnataka and others reported in 2017 SCC OnLine Kar 2785, 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 Development Fee (for short ‘FDF’) by naming it as tax (FDT) was illegal and accordingly directed refund.

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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 and B.Rudragouda’s cases, by holding same to be illegal.

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In view of above, it was contended that demand and levy

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5 - NC: 2024:KHC-D:13059 WP No. 112152 of 2017

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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.

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On other hand, learned AGA sought to contend that decision in NMDC case was under challenge before Hon’ble Supreme Court in SLA (C) Nos.6219-6313/2016 [C.A.No.3974-4068/2016] while decision in

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B’Rudragouda’s case was under challenge in SLP (Civil) No.4329-4386/2018 [C.A.No.3214-3271/2018] and

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interim order against refund of FDT was granted. It was further submitted, decision in W.P.No.38941/2018, was challenged in W.A.No.743/2021, wherein interim order against demand/collection of FDT/FDF was granted. It was submitted, in view of above, all cases which would be subject to outcome of matters before Hon’ble Supreme Court and Division Bench of this Court.

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Heard learned counsel and perused writ petition

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records.

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From above, it is seen that petitioners are

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challenging demand and collection of FDT on purchases of timber from respondents. There is no dispute that demand/collection of FDT is referable to Chapter XI-A inserting Sections 98-A and B of Act, which is held ultra vires in B.Rudragouda’s case and though same is challenged before Hon’ble Apex Court, decision is not stayed and interim order is granted only against refund. Likewise, even in appeal filed against decision in W.P.No.38941/2018, there is interim order against demand and collection of FDT.

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In view of above, instead of keeping this matter pending, 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.No.3974-4068/2016 and C.A.No.3214-3271/2018, pending before Hon’ble Supreme Court.

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NC: 2024:KHC-D:13059 WP No. 112152 of 2017

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It would be needless to mention that the

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respondent authorities would take further action only after disposal of said matters by issuing fresh demand or take action for refund insofar as petitioners, subject to the result of the decision of the Apex Court.

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Sd/(H.P.SANDESH) JUDGE

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SH CT-MCK List No.: 1 Sl No.: 18

Shri. Premanand S/O Vishnu Gavas v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

Shri. Premanand S/O Vishnu Gavas v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

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