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Issues Involved:
1. Whether the money credited by the State Government to the account of the petitioner-company is income from winnings from lotteries. 2. Whether, on a true construction of the agreement dated December 21, 1989, the company is an agent in relation to its principal, the State of Goa, and can the company be said to have purchased the unsold tickets? 3. Preliminary objections regarding the maintainability of the petition and locus standi of the petitioner. Summary: Issue 1: Income from Winnings from Lotteries The court examined whether the money credited to the petitioner-company by the State Government under clause 15 of the agreement is income from winnings from lotteries. The petitioner argued that the credited money is merely a return of monies deposited with the Government for prize monies on unsold lottery tickets. The court referred to several legal precedents and concluded that a lottery involves a chance for a prize against a price and participation in the draw. Since the petitioner-company does not purchase the tickets nor participate in the draw, the credited money cannot be considered as winnings from lotteries. Thus, the court declared that monies credited to the petitioner-company by the Government of Goa under clause 15 of the agreement are not income by way of winnings from lottery. Issue 2: Agency Relationship and Purchase of Tickets The court analyzed the agreement dated December 21, 1989, to determine whether the company is an agent of the State of Goa or a purchaser of the unsold tickets. The agreement clearly indicated that the company was engaged to organize and conduct lotteries on behalf of the State Government, with stringent controls and guidelines imposed by the Government. The court observed that the agreement did not involve any sale of lottery tickets to the company but was purely an agency agreement. The company was responsible for organizing the lottery and selling tickets on behalf of the Government, with no transfer of property in the tickets. Therefore, the court concluded that the agreement is one of agency and not of sale. Preliminary Objections: Maintainability and Locus Standi The Income-tax Department raised preliminary objections regarding the maintainability of the petition and the locus standi of the petitioner. The court addressed these objections by stating that the petitioner-company is indeed an aggrieved party as the incidence of tax affects it directly. The court referenced several legal precedents to establish that a person prejudicially affected by an act or omission of an authority can file a writ even if they do not have a proprietary interest. The court also dismissed the argument that the petitioner should seek alternative remedies under the Income-tax Act, noting that the petitioner cannot be expected to await orders from the assessing authority while being out of business under the agreement. Conclusion: The court declared that the money credited to the petitioner-company by the Government of Goa under clause 15 of the agreement is not income by way of winnings from lottery. A writ of mandamus was issued directing the Income-tax Officer, Ward-2, Panaji, to withdraw the demand for income-tax and surcharge made on the ex-officio Director of Lotteries, and the letter dated February 25, 1992, was quashed. The court ruled in favor of the petitioner, establishing that the agreement was one of agency, not sale, and the credited money was a return of deposit, not winnings from lotteries.
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