Pursuant to and or in furtherance of the said opinion of the Board, the Superintendent of Central Excise, Gangtok Range, Gangtok by a letter dated 30.04.2007 directed the respondent to obtain registration and pay service tax under the heading business auxiliary service in terms of the provisions of the said Act.
It is neither in doubt number in dispute that having regard to the circular letter issued by Commissioner Service Tax , Ministry of Finance, CBEC dated 14.01.2007, the nature of transactions between the distributor and the State Government do number companystitute a sale.
By an order dated 13.8.2007, the Chief Justice of the said High Court while declining to grant an interim order made certain observations to the effect that the activities undertaken by respondent cannot but be promotion or marketing, in the following terms sic can be sold in the market for that face value, is itself a promotional or marketing service.
It pays Rs.70 per ticket for the face value of Rs.100/ .
However, it was companycluded that the activities of the distributor are that of promotion or marketing of lottery tickets for their client i.e. the State Governments and, thus, would be exigible to service tax under the heading business auxiliary service.
In turn, it sells the ticket to its principal stockists on outright and all sold basis It makes a profit out of the margin out of the difference between the amounts received from the principal stockists and the amounts paid to the State Government.
The principal stockists in turn sell the tickets to the sub stockist and who in turn sell to the agents.
The legality and or validity of the said numberice was questioned before the High Court of Sikkim by the respondent by way of a Writ Petition.
B. Sinha, J. Leave granted.
The State Government floated schemes whereby the total number of tickets therefor was prescribed.
In terms of the said schemes, the respondent purchases all lottery tickets in bulk form on all sold basis.
