LexH. ANRAJ ETC. versus GOVERNMENT OF TAMILNADU ETC.
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A B 342 H. ANRAJ ETC. v. GOVERNMENT OF TAMILNADU ETC, OCTOBER 4, 1985 [V, lJ, 'IULZAPURKAR AND SAllYASA.Clil MUKHARJl I JJ. J Sales Tax on the sale of lottery tickets - The Tamilnsdu General Sales Tax Act, 1959 amending section 59(2) and the West Bengal Taxation Laws (second amendment) Act, 1984 making appro- priate additions to sections 5(l) (aa), 5(l) (dd), 5(2) (a) (vb) and 5(2) (v) (iva) to the Bengal Finance (Sales Tax) Act, 1941 are within the legislative competence of the Stste L.egislature c and covered by Entry 54 of List lI in the Seventh Schedule - Concept of a lottery, lottery ticket, "goods", "sale", "movable property" and "immovable property" - Whether the sale of a lottery ticket il\volves a transfer of property in goods and therefore a sale of goods - Constitution of India, 19501 Article 3bb(l2) read with 1ections 2(j) and i(n) of the Tamil Nadu c;sT Act and sections i(d) aild (g) of the aengal Act section 2(7) of u the Sale of !;oods Act, section 3 of the Transfer of Property Act and section 3(26) of the General Clauses Act - Whether c.l.lMs 219 dated 3l.3.l984 of the Tamil Nadu !;overnment iB diacriroinstory and violative of Article 14 and 304(9) of the Constitution. The subject of "lotteries" organised either by the Govern- E ment of India or by the Government of a State falls within the Ullion 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 could be done by the Government of various Stetea only under Article 258(1) of the Constitution on entruatment of that function by the Union to the concerned State. By virtue of F that power entrusted to them by Presidential ordera, the Govern- ment of Tamil Nadu and the Government of Weit Bengal organieed a State lottery by apo1111oring a l!affle echeme and framing appro- priate Rulea in that behalf. The State Governments were aleo deairou1 of levying aalee tax on the isle of the lottery ticket• by placing the incidence thereof on every dealer aelling such G ticket• within the State. II In the State of Tamil Nadu1 by a Notification GOP No. 77 dated January 28, 1984 i11ued under aection 59 of the Tamil Nadu General Sales Tax Act, 1959 the State Government ill8erted an ( H.ANRAJ V• GOvr. OF TAMILNADU 343 Entry 163 in the F.f.rst Schedule to the Act whereby lottery tickets were brought within the purview of the charge· and tax at A the rate of 20% was levied on the sale of such tickets "at the point of first sale in the State." This Notification was lster followed by a regular legisl.a"tive amendment made in the Act as required by section 59(2). . Under the Raffle scheme so promulgated, the first sale of lottery tickets issued thereuDder was by the State Government of Tamil Nadu to various llceQCed B ··agents, whole salers, stockists etc. and the State Government became liable to pay sales tax as the first dealer• Therefore, the Finance (Raffle) Department of the State Goverment issued a Notification W1s No. 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 wa~ not passed on to the C licenced dealer or to purchaser; in other- words effectively exenption from payment of aales tax was granted to the purchaser. Shri· H. · Anraj the comnon petitioner, in both the writ petitions · filed under Article 32 of the Constitution, who has been carrying on business in the State of Iamil. Nadu as ·a dealer in lottery tickets issued by the Royal Government of Bhutan, the State. of ; D Assam and various other lotteries, has challenged the validity of both the levy of sales tax on the sale of lottery ticket.a as also the execption granted under Notifkation GOMs 219 · dated 31.3.1984. In. West Bengal, the State Legislsture promulgated the West · E Bengal Taxation L.iws (second amendment). Act, 1984 whereuDder by making appropriate amendments (by way of additions) to sections 5(l)(aa) ,5(l)(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'turnover of every deiiler in regard to the sale of lottery tickets. By a Notification NO. 1020 FT 'dated March 29, 1984 the levy imposed under the aforesaid amendinents p was brought into force with effect from May l, 1984. By a writ petition filed "in the Calcutta High Court the appellan
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