- 1 - NC: 2025:KHC-D:1397 WP No. 100074 of 2025 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 23RD DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO.100074 OF 2025 (GM-FOR) BETWEEN: THE SAGAR TIMBER MART, REPRESENTED BY SAGAR R KADWADKAR AGE: 34 YEARS, OCC: BUSINESS, KARWAR TQ: KARWAR, DIST: UTTAR KANNADA – 581 301 (MSTC/SAGAR R KADWADKAR/149310) …PETITIONER (BY SRI K. H. BAGI, ADVOCATE) AND: 1. THE STATE OF KARNATAKA, BY ITS SECRETARY, DEPARTMENT OF FOREST, M.S.BUILDING, AMBEDKAR VEEDHI, BENGALURU – 560 001. 2. THE ADDL. PRINCIPAL, CHIEF CONSERVATOR OF FOREST, ARANYA BHAVAN 4TH CROSS, MALLESHWARAM, BENGALURU – 560 003. 3. THE DEPUTY CONSERVATOR OF FOREST, Digitally signed by VISHAL NINGAPPA PATTIHAL Location: High Court of Karnataka - 2 - NC: 2025:KHC-D:1397 WP No. 100074 of 2025 HALIYAL DIVISION, HALIYAL, DIST. UTTAR KANNDADA – 581 329. 4. THE ASSISTANT CONSERVATOR OF FOREST, GOVT. TIMBER DEPOT DANDELI, TQ: DANDELI, DIST: UTTAR KANNDADA – 581 325. 5. THE RANGE FOREST OFFICE, GOVT. TIMBER DEPOT BHAGAWATI, TQ: HALIYAL, DIST: UTTAR KANNADA – 581 363. …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. A WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER WRIT OR ORDER OR DIRECTION, QUASHING THE SALE INTIMATION LETTERS BEARING AUCTION NUMBER MSTC/BLR/DEPUTY CONSERVATOR OF FORESTS HALIYAL/ACF GOVT. TIMBER DEPOT DANDELI/32/DAN/25/39987 DATED 28.11.2024 AND MSTC/BLR/DEPUTY CONSERVATOR OF FORESTS HALIYAL/RANGE FOREST OFFICE BHAGAWATI/15 AND 16/BHAGAWATI/TQ HALIYAL DIST UTTARKANNADA/24-25/40440 AND 40442 DATED 30.11.2024 ISSUED BY THE RESPONDENT NO. 3, 4 AND 5 INSOFAR AS 12% FOREST DEVELOPMENT TAX IS CONCERNED AT ANNEXURE-B, BY ALLOWING THE ABOVE WRIT PETITION, IN THE ENDS OF JUSTICE AND ETC., THIS WRIT PETITION, COMING ON FOR ORDRES, THIS DAY, ORDER WAS MADE THERIEN AS UNDER: - 3 - NC: 2025:KHC-D:1397 WP No. 100074 of 2025 ORAL ORDER (PER: THE HON'BLE MR. JUSTICE M.NAGAPRASANNA) Heard the learned counsel Sri K.H.Bagi on behalf of the petitioner and learned HCGP for respondents No.1 to 4. 2. Though this matter is listed for preliminary hearing, with consent of both the parties, same is taken up for final disposal. 3. The petitioner is seeking to quash the Sale Intimation letters dated 28.11.2024 and 30.11.2024 issued by respondents No.3 and 4 insofar as 12% Forest Development Tax is concerned at Annexure-B. 4. The petitioner has participated in the public e- Tender-cum-Auction of timber at Dandeli as per the schedule dated 28.11.2024 and 30.11.2024, which has already been sold through a public e-Tender-cum-Auction notification issued by the 2nd respondent/authority. The petitioner is the successful bidder of forest products from - 4 - NC: 2025:KHC-D:1397 WP No. 100074 of 2025 the respondents in auction bids by selecting the lots as per e-bills. Surprisingly, the petitioner received Sale Intimation letters dated 28.11.2024 and 30.11.2024 issued respondents No.3 and 4 vide Annexure-B, who levied FDT to an extent of 12% on the wood purchased by the petitioner. 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 Writ Petition No. 43937-43938/2016 and connected matters in the case of B.Rudragouda vs. State of Karnataka and others1. 5. Learned counsel for the petitioner relies on the judgment of this Court in B.Rudragouda (supra), whereby this Court has held that 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 1 AIR 2018 KAR 19 - 5 - NC: 2025:KHC-D:1397 WP No. 100074 of 2025 Limited vs. State of Karnataka and another2, wherein it was held that the petitioners therein lease holders/quarry owners in the forest area are not liable to pay FDT. 6. 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. 7. 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 it is contended that the outcome of the matters before the Hon’ble Supreme Court would decide the matters herein. 2 2015 SCC Online Kar 8620 - 6 - NC: 2025:KHC-D:1397 WP No. 100074 of 2025 8. In the present case the petitioner is challenging the Sale Intimation letters dated 28.11.2024 and 30.11.2024 issued by respondents No.3 and 4 vide Annexure-B. 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. 9. 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. 10. 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 - 7 - NC: 2025:KHC-D:1397 WP No. 100074 of 2025 petitioner is concerned, wherever the FDT is already collected by the respondents. Sd/- (M.NAGAPRASANNA) JUDGE NAA/CT-ASC List No.: 2 Sl No.: 4