number 219 dated 31.3.1984 panguni 18 ruthrodh kari thiruvalluver andu 2015 r e a d g o p number 77 dt.
read above the government have ordered the levy of sales tax at 20 single point on the sale of lottery tickets at the point of first sale in the state.
in substance the high court came to the companyclusion that lottery tickets were number actionable claims but goods within the definition of that expression given in the bengal finance sales tax act 1941 and therefore the state legislature was companypetent under entry 54 of list ii to enact the companycerned amendments levying sales tax on the sale of lottery tickets.
28.1.1984.
shri h. anraj the companymon petitioner in both the writ petitions who has been carrying on business in the state of tamilnadu as a dealer in lottery tickets issued by the royal government of bhutan the state of assam and various other lotteries has challenged the validity of both the levy of sales tax on the sale of lottery tickets as also the exemption granted under numberification goms 219 dated 31.3.1984.
presumably on the entrustment of the function of conducting a state lottery by the union government under a similar presidential order the government of west bengal organised its own lottery by sponsoring a raffle scheme and framing appropriate rules in that behalf and for the purpose of levying sales tax on the sale of the lottery tickets the state legislature promulgated the west bengal taxation laws second amendment act 1984 whereunder by making appropriate amendments by way of additions to sections 5 1 aa 5 1 dd 5 2 a vb and 5 2 v iva of the bengal finance sales tax act 1941 sales tax at the rate of 20 was levied on the taxable turnumberer of every dealer in regard to the sale of lottery tickets.
number 77 dated january 28 1984 issued under s. 59 of the tamil nadu general sales tax act 1959 the state government inserted an entry 163 in the first schedule to the act whereby lottery tickets were brought within the purview of the charge and tax at the rate of 20 was levied on the sale of such tickets at the point of first sale in the state.
the companymissioner of raffle is requested to give wide publicity on these orders immediately.
according to the petitioners the arrangement under the numberification is that the raffle department of the government of tamil nadu pays the tax to the companymercial taxes department of the government of tamil nadu and the tax is number passed on to the purchaser in other words effectively exemption from payment of sales tax is granted to the purchaser.
hence the appeal.
thus in substance lottery tickets issued by the government of tamil nadu do number suffer any tax while on the other hand the lottery tickets issued by other government and sold within the state of tamil nadu are subject to tax.
in the g .o.
from the judgment and order dated 14.8.1984 of the calcutta high companyrt in civil rule number 6431 w of 1984.
the state government was also desirous of levying sales tax on the sale of the lottery tickets by placing the incidence thereof on every dealer selling such tickets within the state and for that purpose by a numberification g.o.p.
435 and 436 of 1985.
therefore the finance raffle department of the state government issued a numberification goms number 219 on march 31 1984 bringing into force certain arrangement whereunder while retaining the sale price of the ticket at its face value the tax was number passed on to the licenced dealer or to purchaser in other words effectively exemption from payment of sales tax was granted to the purchaser.
by a writ petition filed in the calcutta high court the appellants being three petitioners who carry on business in the state of west bengal as agents and stockists of various lotteries organised by different states including the state of west bengal challenged the validity of the aforesaid amendments made in the bengal finance sales tax act 1941 whereunder sales tax has been levied on the sale of lottery tickets substantially on the ground that a lottery tickets when sold represented an actionable claim and number goods and such a transaction being merely a sale of a chance to win a prize in the draw was number exigible to sales tax and therefore the amendments made were beyond the legislative companypetence of the state legislature as entry 54 of the list ii in the seventh schedule authorises legislation levying sales tax only on the sale or purchase of goods the matter ultimately went before a division bench of that companyrt who by its judgment and order dated august 14 1984 dismissed the writ petition upholding there constitutional validity of the amendments in question as also the levy imposed thereunder.
under article 32 of the companystitution of india and civil appeal number 4099 nt of 1984.
by a numberification number 1020 ft dated march 29 1984 the levy imposed under the aforesaid amendments was brought into force with effect from may 1 1984.
number 436 of 1985.
original jurisdiction writ petitions number.
the facts giving rise to the aforesaid question lie in a narrow companypass and in the writ petitions the question arises out of the levy imposed for the first time on such sales of lottery tickets by an amendment made in the tamil nadu general sales tax act 1959 with effect from january 28 1984 while in the civil appeal it arises out of a similar levy imposed for the first time by making suitable amendments in the bengal finance sales tax act 1941 with effect from may 1 1984.
accordingly at the instance of the tamil nadu government which proposed to organise its own state lottery the central government entrusted that function to the state government by means of a presidential order dated october 271971 the operative part whereof ran thus number therefore the president is pleased to permit the government of tamil nadu to companyduct a state lottery subject to the companydition that the tickets of the lottery shall number be sold in any other state without the permission of the government of that state.
s. chitale vineet kumar and k. srinivasan for the petitioners in w.p.
puri for the respondent in c.a.
the following judgments were delivered tulzapurkar j. these writ petitions and the civil appeal raise a companymon question of law namely whether sales tax can be levied by a state legislature on the sale of the lottery tickets in the companycerned state?
indisputably the subject of lotteries organised either by the government of india or by the government of a state falls within the union list entry 40 of list i but in the absence of any law having been enacted by the parliament on the subject the running of lotteries companyld be done by the government of various states only under article 258 1 of the companystitution on entrustment of that function by the union to the companycerned state.
the president is further pleased to entrust the government of tamil nadu under clause 1 of article 258 of the companystitution the executive power of the union in respect of lotteries organised by that government.
raju and vineet kumar for the petitioners in w.p.
soli j. sorabjee k. srinivasan n.b.b.
as regards the exemption granted by the tamil nadu government under numberification number goms.
by order of the governumber ramachandran commissioner and secretary to govt.
number 435 of 1985.
number 4099 of 1984.
number.
