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‘Forest development fee unconstitutional’

The state will have to shell out hundreds of crores of rupees to miners, as the High Court declared the amendment to the Forest Act to retain forest development tax collected in the form of fee.

Published: 05th October 2017 02:44 AM  |   Last Updated: 05th October 2017 08:43 AM   |  A+A-

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By Express News Service

BENGALURU: The state will have to shell out hundreds of crores of rupees to miners, as the High Court on Wednesday declared the amendment to the Forest Act to retain forest development tax collected in the form of ‘fee’ as contrary to the Constitution.

Allowing a batch of petitions filed by mining firms, a division bench of Chief Justice Subhro Kamal Mukherjee and Justice P S Dinesh Kumar asked the state to refund fee already collected from miners.
“In this case, and this incident particularly, the extraction of mineral upon which royalty is imposed under MMDR Act, remaining constant, imposition of levy by changing the name from ‘tax’ to ‘fee’ is impermissible. Thus the mode in which the state has brought in the amendment is contrary to well established position of law,” the division bench said in the judgement pronounced.

The firms have challenged the constitutional validity of Karnataka Forest (Amendment) Act 2016 contending that the state lacks legislative competence to bring such amendment as it is contrary to law. After hearing the arguments of both state and the mining firms, the division bench said: “The most important aspect which remains for consideration is, whether at all, the state could have sought to rename ‘tax’ as ‘fee’ in Section 98-a by mere substitution (word ‘tax’ substituted by ‘fee’) without removing the base upon which there existed earlier judicial pronouncements. .. The state proceeded to impose their assumption that ‘tax’ was in fact, ‘fee’ and imposed by levy all over again by rechristening it as ‘fee.”

Stating that the government shall have no authority to retain the levy collected by seeking to appropriate the same by virtue of the impugned amendment, the bench said, “We, therefore, direct the refund of the forest development fees already collected by the state.”

Rs 3,000 crore refund?

Sources in Mines and Geology Department said that state government has to refund around `3,000 crore forest development fee collected from the mining companies, in view of this judgment.

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