Bengaluru: The High Court of Karnataka on Wednesday declared as unconstitutional the Karnataka Forests (Amendment) Act, 2016 and directed the government to refund hundreds of crores of rupees collected as forest development fee (FDF) from private mining leaseholders.

A Division Bench comprising Chief Justice Subhro Kamal Mukherjee and Justice P.S. Dinesh Kumar delivered the verdict, while allowing a batch of petitions filed by B.R. Rudra Gowda and other individual mining leaseholders, and private mining companies such as Vedanta Ltd. and others. The State amended the Act in 2016 to empower the government to collect FDF of 12 per cent, with retrospective effect from 2008, on the sale price of minerals sold by private mining companies.

However, the petitioners contended that the amendment was enacted “only for the purpose of circumventing the High Court’s December 3, 2015 judgement with the object of avoiding the liability to refund the amount wrongfully and illegally collected from the miners under the erstwhile name – forest development tax (FDT).

The High Court, in its December 2015 verdict, held that private mining or quarrying leaseholders in forest areas are not liable to pay the FDT when they dispose of iron ore and other minerals and had directed the State to refund the collected FDT.