The High court of Karnataka on 4th October, made a landmark judgment quashing the Forest development fees.
The division bench comprising of Chief Justice MR Subhro Kamal Mukherjee and Justice P S Dinesh Kumar were dealing with writ petitions filed by more than 40 mining companies from whom the state of Karnataka has been collecting Forest Development Fee since 2008.
The petitioners unanimously pleaded that there is no quid pro quo in form of a service or benefit for a fee to be levied. Further, they also argued that legislative competence to enact the impugned legislation.
The State, on the other hand, argued that the levy is in the nature of ‘fee’ and not ‘tax’.
Allowing the petitions, the bench observed that the levy has no constitutional validity since the state government has no right to impose it.
After analysing the levies of NPV/CA with Forest Development Fee, the bench noted that the State Government envisages to enhance the forest b using the fee. “NPV and compensatory afforestation charges are collected by the leaseholders to compensate, for the ecological loss and diversion of forest. Therefore, though the object of the State Government is laudable, we afraid that there is no duplication is unsustainable,” the bench said.
The bench also ordered for refund of any such fees levied from the aggrieved parties even after a prerequisite prayer by Mr. S.K. Bagaria, the advocate appearing on behalf of the state.
Rejecting the State’s prayer, the bench ruled that all payments and acceptances were without prejudice to the rights and contentions of the writ petitioners in the pending writ petitions.
This, according to reliable sources, is going to cost the state exchequer, a whooping Rs.3000 Crores. How the State is going to respond to this order is now highly anticipated.
Read the full text of the Judgment below.
