A common question as to whether forest development tax collected by the Forest Department on the auction sale of timber to the petitioners forms part of the turnover for the purpose of levy of tax under the Kerala General Sales Act, 1963 (for short “the Act”) arises for consideration in all these cases.

2. The petitioners in all these cases are engaged in the business of buying and selling of timber. They are all registered dealers both under the KGST and CST Act. All of them used to purchase timber from Forest depots belonging to the State. In all these Writ Petitions except Writ Petition No. 22610/2003, the petitioners seek a declaration that the respondents have no right or authority to collect sales tax on the element of forest development tax in the light of the Government communication dated 21.8.1996 (Exhibit P1) and in the light of the judgment dated 8.1.1997 in O.P. No. 378 of 1997 (Exhibit P2). They also sought for quashing Exhibits P4, P5, P7 and P9 to the extent it demand sales tax on the turnover of forest development tax.

3. The petitioner in W.P. (C) 22610 of 2003 seeks for refund of the excess sales tax collected by the respondents from him during the period from 95-96 to 98-99 as mentioned in Exhibit P4 with interest at the rate of 12% and or to adjust the said excess amount towards the amount due from the petitioner as per the final assessment of sales tax for the year 98-99 and subsequent years. There is also a prayer for quashing Exhibits P6 and P7 communications issued by the respondents.

4. It is stated in the Writ Petitions that as per the provisions contained in Section 75A of the Forest Act, the respondents used to collect along with the sale price an additional amount of 5% as forest development tax, that on a wrong assumption the said amount 5% charged as forest development tax was also added on the sale price and sales tax was charged on the aggregate amount. This according to the petitioners was being done by the forest officials who are conducting auction of timber in forest deposits of the State in spite of the objections taken by them and therefore the mater was taken up before the Government and the Government have issued a clarification dated 21.8.1996 wherein it is stated that it is not proper to collect sales tax on a tax already collected for the consideration paid. It is also their case that this Court in the judgment dated 8.1.1997 in O.P. No. 378 of 1997 held that forest development tax will not form part of the taxable turnover and therefore the respondents were not collecting any sales tax thereafter on the turnover including forest development tax. It is also stated that pursuant to the said judgment the petitioners and others have taken steps for getting refund of the tax already paid. The petitioners have produced a copy of the order dated 19.7.2002 issued by the 1st respondent rejecting one such claim. The present grievance of the petitioners is that the first respondent have forwarded the copy of the G.O. (Rt.) No. 405/2002/TD dated 19.7.2002 to all the Divisional Forest Officers and that on the basis of the said G.O., forest officials are taking steps to collect sales tax on the turnover of forest development tax. Petitioners have also received demand notices in respect of the bill which did not include forest development tax in the turnover for the purpose of levy of sales tax. It is in these circumstances, the petitioners have filed the above writ petitions. The material facts and circumstances in the other Writ petitions are by and large similar.

5. Two of the Forest Divisional Officers of the timber sales division at Perambavoor and Palakkad had filed counter affidavits in O.P. No. 2243 of 2003 wherein it is stated that in the Government order dated 19.7.2002 it is stated they have collected sales tax on forest development tax also. It is also stated that no sales tax was collected on the forest development tax till the receipt of the said communication and that as pe