SESA Goa Limited vs State of Karnataka and Others

V.G. Sabhahit, J.—Heard the learned Senior counsel appearing'' for the parties wherein applications have been filed, for modification of the order dated 19.8.2009,

These writ petitions are tiled challenging the notification dated 16.8.2008 amending Section 98-A of Karnataka Forest Act imposing Forest Development Tax. This Court, by order data 19.8.2009 after hearing the learned Counsel for the parties expressed that until a provision of Statute is held unconstitutional, the same is deemed to be valid in law and therefore enforceable and observed that no blanket stay can be granted and interim order was granted subject to the following conditions:

i) The respondents are at liberty to levy Development Tax as proposed in the impugned notification.

ii) However, the demand shall be restricted only to 50%. Forest Development Tax levied as an interim arrangement pending disposal of the writ petition.

iii) This order shall haws effect from the dace of publication of notification.

iv) The respondent shall give maximum time of three months to pay arrears of 50% toe levied for the period from 27.8.2008 till 27.5.2009.

The present applications have been filed for modification of the order dated 19.8.2009 seeking for furnishing the bank guarantee for payment of Forest Development Tex as demanded, by modifying condition Nos. 2 arid 4 wherein 50% of that arrears was directed to be paid within three months from 27.8.2008 till 27.5.2009.

Learned senior counsel for the petitioner-applicant submitted that interim order passed by this Court had been challenged before the Hon''ble Supreme Court in SLP (Civil Nos. 30369/09) and Hon''ble Supreme Court has passed the following order on 30.11.2009:

Learned senior Counsel for the petitioner/applicant submits that there is already an application for modification of the impugned order filed before the High Court and the same is pending. We request the High Court to dispose of the same by passing appropriate orders at the earliest atleast within a reasonable period. We are told that the matter is posted on 7.12.2009. We do not express any opinion on merits regarding the same. As the High Court has directed the petitioner to pay 50%, the petitioner may furnish a Bank guarantee for the same and the authorities may consider it as a payment.

Learned Senior counsel for the petitioner-applicant submitted that in view of the observation made by the Handle Supreme Court that furnishing of bank guarantee shall be deemed to be payment, the order passed by this Court on 19.8.2009 may be modified.

Learned Government Advocate appearing for the respondents submitted that this Court has already imposed appropriate conditions and only 50% of the tax is ordered to be paid as interim arrangement and if bank guarantee is furnished, State will not haw. any revenue and Hon�ble Supreme Court has stated that application for modification shall be decided on merits as no opinion is expressed by the Hon�ble Supreme Court as stated in the order regarding application for modification of the order dated 19.8.2009 and the SLP as well as IA are disposed of accordingly by the Hon''ble Supreme Court.

Learned Senior counsel for the applicant in other writ petitions submitted that the order that would be passed in Writ Petition No. 13595/08 may be passed in ether writ petitions also wherever application for modification is made.

We have given careful consideration to the contentions of the learned senior counsel for the parties.

In view of the observation made by the Hon''ble Supreme Court to consider the application for modification of the interim order dated 19.8.2009, the application is taken up for final hearing.

Hon''ble Supreme Court has observed in the order dated 30.11.2009 as narrated above that this Court shall dispose of the application for modification of the order dated 19.82009 independently as the Hon''ble Supreme Court has not expressed any opinion on merits. Learned Senior counsel for the appellant has submitted that though the order passed in Writ Petition No. 35525/93 has been confirmed in W.A. No. 3166-70/97, no amendment has been made to the Act and in view of the Division Bench judgment of the Court in W.A. No. 3166-70/97, it is observed in the said order dated 17.11.1998 that respondents are not entitled to levy tax on the royalty payable to the State and that Section 98-A was not applicable in the case of mining leases. Learned Government Advocate submits that the said case pertains to imposition of royalty on the value of the mineral and now tax is imposed on the value of the mineral. However, the question has to be decided on merits at the time of final hearing. At this stage, with regard to the contention of the parties and to safeguard the interest of both the parties, we modify condition No. 2 which reads as follows:

ii) However, the demand shall be restricted only to 50% Forest Development Tax levied as an interim arrangement pending disposal of the writ petition.

We direct that the demand shall be restricted to 50% Forest Development Tax as an interim arrangement pending disposal of the writ petition and the petitioners shall pay 25% of the demand in cash and furnish bank guarantee for the balance 25%. However, petitioner is granted four weeks'' time to furnish bank guarantee. Furnishing of bank guarantee shall be without prejudice to the contentions of the parties in the writ petition.

12, Modification of condition No. 4 does not arise as the said condition imposed has already been complied with. Apart from modification of condition No. 2 all other conditions imposed on 19.8.2009 stands unaltered.

According, these Misc. Writs are allowed.