- 1 - 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. 2. THE DEPUTY CONSERVATOR OF FOREST 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. Digitally signed by VISHAL NINGAPPA PATTIHAL Location: High Court of Karnataka, Dharwad Bench, Dharwad - 2 - NC: 2025:KHC-D:2578 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. No. Sale intimation Letter/Period of Auction Annexure 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” - 3 - NC: 2025:KHC-D:2578 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 - 4 - NC: 2025:KHC-D:2578 WP No. 100846 of 2025 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. - 5 - NC: 2025:KHC-D:2578 WP No. 100846 of 2025 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 List No.: 1 Sl No.: 96