STATE OF KARNATAKA Vs. CANTREADS PRIVATE LIMITED

JUDGEMENT

(1.) all these writ appeals and the writ petition can be dealt with under a common judgment since the point involved is one and the same, namely, whether R.M.A. Rubber sheets of various grades could be called forest produce within the meaning of Section 2(7) of the Karnataka Forest Act, 1963 (hereinafter referred to as the act) as it stood prior to Amendment Act No. 10 of 1989.

(2.) the facts in W.A. No. 526 of 1989 wouldbe enough to dispose of these cases. Hence, we propose to take up W.A. No. 526 of 1989 first. This writ appeal is against the judgment in W.P. No. 23718 of 1981. Respondent 1-is a company engaged in the manufacture of tread rubber. It negotiated with the State of Karnataka - appellant 1 herein, for supply of 60 tonnes of Natural Rubber of Grades Rma I to v Per Month for a period of five years upto 31-3-1984 subject to certain conditions. The government of India on 17th april, 1979, in exercise of the powers under Section 13 of the rubber Act, 1947, fixed the minimum price at certain rates in respect of various grades and qualities of rubber and latex of different concentrations excluding the cost of container. This fixation of price was upto 30th june, 1980. Pursuant to this, appellant 1 issued a notification that in view of Section 13(3) of the rubber act of 1947, there should not be any sale of rubber below the minimum price fixed by the notification of the government of India dated 17th april, 1979. It was further directed that the rate indicated at 20 per cent below 'the average rate of previous three auctions should not be lower than the minimum price fixed by the government of India referable to the particular grade of rubber. In such an eventuality, the selling rate shall be at the minimum price fixed by the government of India. Thereafter, the government of Karnataka transferred the liability of supply of the quota of rubber to M/s. Karnataka forest plantation corporation . This was by a notification dated 27th july, 1981. While the matter stood thus, the chief conservator of forests fixed the seigniorage rate excluding all taxes for the raw smoked rubber exclusive of all taxes at a certain rate. This notification stood modified by a corrigendum issued on 16th june, 1981. The government of Karnataka, in view of this notification and the corrigendum, wrote to respondent 1 herein that the quota of rubber to be supplied from 12th june, 1981 onwards would be at the rates fixed by the chief conservator of forests under Section 101-a of the act. It was further stated that the supply of rubber from 9th january, 1981 onwards will be at the rates mentioned in the orders made by the chief conservator of forests. Aggrieved by the fixation of seigniorage rates W.P. No. 23718 of 1981 came to be filed.

(3.) the main contentions urged before the learned single judge were: rubber is not a forest produce within the meaning of Section 2(7) of the act. Rubber tree is not a forest tree. In any event, latex produced from rubber trees in a rubber plantation is only an agricultural produce. What is sold by the appellants in favour of respondent 1 herein is not latex got straight from the tree. It is a chemically and mechanically processed produce resulting from the treatment of latex converting it into sheets or blocks of rubber in factories. Such a processed sheet or block of rubber can in no sense be regarded as a forest produce. It is not understood as forest produce either in rubber industry or in common parlance. Therefore, the chief conservator of forests will have no power or jurisdiction to fix seigniorage value for rubber as is sold in favour of respondent 1 herein. The respondents do not extract rubber sheets produced by the government from the liquid as tapped by them from rubber trees. Seigniorage value means the royalty payable by the consumers and purchasers for the collection and removal of forest produce from forests on licences or permits at the rates fixed by the government. The demand based on the order of the chief conservator of forests is therefore without authority of law. Inasmuch as it is not a forest produce within the meaning of the Act, Section 98-a of the act is equally inapplicable. Therefore the levy of forest development tax as contemplated under the said Section is unauthorised. Consequently, respondent 1 herein would be entitled to the refund of the amount paid hitherto.