Forest Development Tax demands, collections, and refunds remain subject to pending appellate outcomes.

The petitioners, including timber businesses and traders, challenged e-tender-cum-auction notifications issued by forest authorities, contesting the levy of Forest Development Tax (FDT) at the tender-cum-auction stage under Chapter XIA of the Karnataka Forest Act, 1963

During the proceedings, the State’s counsel relied on an earlier order disposing of similar petitions subject to the outcomes of pending proceedings concerning FDT.

Petitioners’ counsel confirmed that the relevant writ appeal and Supreme Court proceedings remained pending and agreed that these petitions could be disposed of on the same terms.

The petitions concerned FDT levied under Chapter XIA, including Sections 98-A and 98-B, of the Karnataka Forest Act, 1963.

The Court adopted the approach in its order dated 23 April 2024 in W.P. No. 101820 of 2024 and connected matters: demand, collection, and refund of FDT would be subject to the final outcome of W.A. No. 743 of 2021 and connected matters, and Civil Appeal Nos. 3974–4068 of 2016 and 3214–3271 of 2018; authorities could take further action after those proceedings concluded.

The quoted earlier order also recorded that Sections 98-A and 98-B had been held ultra vires in B. Rudragouda’s case, with the challenge pending before the Supreme Court and no stay of that decision, apart from an interim order against refund.

The Court did not decide the validity of the FDT levy or the challenge to the tender notifications on their merits.

Given that the related appellate proceedings remained pending and the petitioners accepted disposal on the terms of the 2024 order, the Court applied the same case-management approach: the consequences of demand, collection, or refund would await the final outcomes of the identified proceedings.

Demand, collection, and refund of FDT are subject to the final outcome of W.A. No. 743 of 2021 and connected matters, and the specified civil appeals before the Supreme Court. The authorities may take further action concerning the demand or recovery of FDT only after those proceedings are disposed of.