Chiang Mai's Administrative Court on Wednesday dismissed a controversial case involving a housing project for judicial staff situated at the foot of Doi Suthep.
It ruled on Wednesday the Treasury Department granted permission for the Office of the Judiciary to use the land.
The court also found the project did not encroach upon national park areas.
The court dismissed a case filed by Suwit Rungwisai, coordinator of a network fighting to reclaim the Doi Suthep forest area, against the department.
It called for the demolition of the housing project, which was intended for staff of the Administrative Office of Appeal Region 5 in the province.
The complex features scores of houses and residential buildings spread over 147 rai and had a budget of more than 1 billion baht.
It is located at the foot of Doi Suthep mountain, in tambon Don Kaeo, Mae Rim district in Chiang Mai.
The court's judgement said the land plot is not a part of Doi Suthep-Pui National Park.
Moreover, according to the Ministry of Science, Technology and Environment Act -- now the Ministry of Natural Resources and Environment -- the land is classified in watershed categories 2, 3 and 4.
That exempts it from the need for Environmental Impact Assessment (EIA) reports before any construction.
The Treasury Department also granted permission for the Court of Justice to construct a residential complex which had proceeded according to the law.