2009 (2) TMI 915 - SC - VAT and Sales Tax

Summary

Issues involved: Interpretation of the term 'goods' under the Sales Tax Acts and applicability to lottery tickets.

Interpretation of 'goods' u/s Sales Tax Acts:
The Supreme Court, in reference to the decision in Sunrise Associates v. Govt. of NCT of Delhi, highlighted that statutory definitions of 'goods' in State Sales Tax Laws consistently exclude actionable claims from the definition. The Court emphasized that actionable claims are considered 'goods' in a broader sense but are specifically excluded under the Sales Tax Acts. It was clarified that although an actionable claim is movable property and falls under the category of 'goods,' the sale of an actionable claim is not subject to sales tax laws due to this statutory exclusion.

Nature of lottery tickets and actionable claims:
The Court analyzed the nature of a lottery ticket, emphasizing that its value lies in representing a chance or right to a conditional benefit of winning a prize greater than the ticket's cost. It was noted that a lottery ticket is essentially a token or evidence of this right, with no intrinsic value apart from its representation of a potential prize. The Court referred to the case of H.Anraj, which established that a lottery ticket is a document evidencing the transfer of certain rights. The Court affirmed that upon purchasing a lottery ticket, the buyer acquires a conditional interest in the prize money, which qualifies as an actionable claim. Consequently, this right is excluded from the definition of 'goods' under the Sale of Goods Act and Sales Tax statutes.

In conclusion, the Supreme Court dismissed the appeal based on the interpretation of 'goods' under the Sales Tax Acts, emphasizing the exclusion of actionable claims from this definition. The judgment clarified the nature of lottery tickets as representing actionable claims, which are not subject to sales tax laws due to their exclusion from the definition of 'goods.'