M/S Nowfal Timbers & Furniture vs. The State Of Karnataka

Held

The Court acknowledged the submission by the learned Additional Government Advocate for the respondents that the Division Bench of the High Court had previously struck down the levy of Forest Development Fee under the Karnataka Forest Act, 1963. It was also noted that the State Government had filed a Special Leave Petition before the Hon'ble Supreme Court, which was pending. Consequently, the Court held that any action for the levy and collection of Forest Development Fee would be subject to the directions that may be issued by the Hon'ble Supreme Court in the pending Special Leave Petition. The writ petition was disposed of with this specific direction, deferring the final determination of the levy to the outcome of the Supreme Court proceedings. No specific finding was made on the validity of the levy itself, but rather the action to be taken was made contingent on the Supreme Court's decision.

Facts

The petitioner, M/s. Nowfal Timbers & Furniture, sought a declaration that the State Government and its authorities cannot levy, demand, or collect Forest Development Fee at 12% of the sale consideration under Section 98A(1) of the Karnataka Forest Act, 1963, for timber and forest produce auctioned by the Forest Department. This was based on a previous Division Bench judgment of the High Court on October 4, 2017, in W.P. Nos. 43937-938/2016. The petitioner also prayed for the waiver of the entire Forest Development Fee levied on them and their members, arguing it was contrary to the Division Bench's directions. Additionally, they requested the State Government to expeditiously consider their representations dated July 24, 2017, October 7, 2017, and January 11, 2018, submitted by the Federation of Karnataka Timbers.

Key Issues

1. Whether the State Government and its authorities can levy, demand, and collect Forest Development Fee at the rate of 12% of the sale consideration amount under Section 98A(1) of the Karnataka Forest Act, 1963, in respect of timber and other forest produce auctioned/sold by the Forest Department, in light of the Division Bench judgment dated October 4, 2017, in W.P. Nos. 43937-938/2016 and connected matters. Petitioner's contention: The State Government and its authorities cannot levy this fee, as it is contrary to the Division Bench's prior judgment. They rely on the judgment in Sri.B.Rudragouda and Others Vs State of Karnataka and Others. Revenue's contention: The learned Additional Government Advocate fairly submitted that the Division Bench of this Court has struck down the levy of Forest Development Fee under the provisions of the Karnataka Forest Act, 1963. However, the State Government has filed a Special Leave Petition before the Hon'ble Supreme Court, which is pending. The levy of Forest Development Fee shall be subject to the decision of the Hon'ble Supreme Court.