2009 (1) TMI 265 - SC - VAT and Sales Tax

Nature of lottery tickets - goods or actionable claims - held that - The question is, what is this right which the ticket represents? There can be no doubt that on purchasing a lottery ticket, the purchaser would have a claim to a conditional interest in the prize money which is not in the purchaser s possession. The right would fall squarely within the definition of an actionable claim and would therefore be excluded from the definition of goods under the Sale of Goods Act and the Sales tax statutes.

Summary

The Supreme Court of India, in a judgement by Dr. Arijit Pasayat and Asok Kumar Ganguly, dismissed an appeal based on the decision of the Constitution Bench in Sunrise Associates vs. Govt. of NCT of Delhi & Ors. The court highlighted that actionable claims are excluded from the definition of 'goods' in State Sales Tax Laws. A lottery ticket, being a mere piece of paper representing a conditional benefit, is considered an actionable claim and not subject to sales tax. The ticket holder possesses a conditional interest in the prize money, which falls within the definition of an actionable claim and is therefore excluded from the definition of 'goods' under the Sale of Goods Act and Sales tax statutes.