9911796707
TMI Blog1984 (8) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... stating himself to be the proprietor of M/s. Dhar Agencies, on 27th April, 1984. In the petition the legality and validity of the said 1984 Amendment whereby an amendment of the provisions of the said Act tax has been sought to be levied on the sale of lottery tickets, was challenged and the learned Judge issuing the rule, also granted an interim order of injunction restraining the respondents concerned in the rule from taking any steps and/or proceeding for the purpose of levy, imposition and collection of tax on the sale of lottery tickets under the provisions of section 5(1)(aa), 5(1)(dd), section 5(2)(a)(vb) and section 5(2)(b)(iva) of the said Act, till the disposal of the rule, with liberty to the respondents concerned to apply for variation and/or vacation of the interim order upon notice to the petitioners in the rule. It should also be noted that the learned Judge also made the rule returnable before the Division Bench of this Court under rule 26 of the Rules of the High Court at Calcutta, relating to application under article 226 of the Constitution of India. The appeal in question was preferred by the respondents in that rule, against such order of issuing the rule and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the claim and case of the petitioners that State lotteries are sponsored and organised under auspices of various State Governments, who organise and run the State lotteries and sell the lottery tickets to the different agents, who in their turn either sell these tickets to the wholesalers or to the individual customers. It was the case of the petitioners that the agents are allowed a certain percentage of commission on the price of the lottery ticket and normally the percentage which is allowed by the West Bengal State Lotteries is about 25 per cent on the face value of the tickets and some other States allowed 20 per cent commission to the agents on the face value of the tickets. It was the case of the petitioners that the persons who are appointed as authorised agents under the West Bengal State Lotteries, are required to make application for being appointed as such agent and the necessary appointment is made by the Director and/or by the Collector of the district in accordance with rule 7 of the West Bengal State Lottery Rules, 1968 (hereinafter be referred to as the said Rules), which provides as under: "7. (1) The appointment of agents shall be made by the Director an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents as their commission. To illustrate this it has been indicated that if an agent is allowed 20 per cent commission on the face value of lottery tickets when the agents in their turn selling it to wholesalers, he would normally sell such tickets at Rs. 78 if the face value of the tickets is Rs. 100, thereby incurring a loss of Rs. 2 of the face value of Rs. 100. The petitioners have stated that such loss is expected to be recompensated by the agents, from bonus available to them on the basis of the prize winning tickets, if such tickets were sold by them. The said bonus, according to the petitioners, appropriately comes to 3 per cent of the face value of the tickets and thus it has been stated that, after meeting the loss of Rs. 2, the agents normally retain a sum of Re. 1 when the face value of the tickets is Rs. 100. The petitioners have stated that proportionately the gross profit is also reduced if the face value of the tickets is of lesser denomination. It was also the case of the petitioners that out of the said 1 per cent gross profit, the agents have to incur all the expenses necessary and incidental to carrying on their business. It has further been stated by the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Partika on 22nd March, 1984, that the Honourable Finance Minister of the Government of West Bengal, had announced that a tax shall be levied on wholesale dealers of lottery tickets and according to the said statement, such imposition will not affect the persons who are ultimately to purchase such lottery tickets from such wholesale dealers of lottery tickets and the burden of such tickets cannot be shifted to the individual persons, who are ultimately to purchase the said lottery tickets from the wholesale dealers. According to the petitioners, the said Amendment of 1984 was published in the issues of the Calcutta Gazette (Extraordinary), dated 14th March, 1984, together with the statement of objects and reasons and such Bill was brought to amend the said Act. They have stated that in the statement of objects and reasons, the objects of the Bill has been stated to be to amend the said Act for levy of sales tax consequent upon the 46th Amendment of the Constitution and thus to levy tax on sales of lottery tickets at 20 per cent. It has also been stated by the petitioners that along with that other amendments were proposed to be made under the West Bengal Taxation Laws (Second Amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry No. 54 of List II of the Seventh Schedule to the Constitution of India, which deals with "taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I". The said entry 92A states that taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce and entry 62 of List II of the Seventh Schedule deals with "taxes on luxuries, including taxes on entertainments, amusements, betting and gambling". It was the further contention of the petitioners that article 366 of the Constitution of India defines certain words and expressions used in the Constitution, unless the context otherwise requires and under the 46th Constitution Amendment, as mentioned above, a new clause (29A) has been inserted in the said article, whereby the expression " 'tax' on the sale and purchase of goods" has been defined. It was claimed that by such extended definition, certain types of transfers, delivery and supply of goods would come within the purview of "'tax' on the sale or purchase of goods" and the said article 366(29A) provides now that taxes on the sale or purchase o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o participate in the draw and by the mere possession of a lottery ticket, he does not acquire an automatic right to use any goods. Thus, on consideration of the nature and character of lottery tickets, the petitioners have stated that it cannot be said that by the sale of such tickets, any right to use any goods is transferred. The petitioners have also referred to the dictionary meaning of the word "lottery" meaning the competition in which certain tickets drawn at random winning the prizes and the same also means a matter of chance. They have also stated that "lottery" has been judicially defined as a scheme for distribution of money by chance and the same usually takes the form of the creation of an event by participants in the lottery, who buy tickets against the offer, published for a prize on some contingency and the happening whereof depends on chance. Such a chance, the petitioners have stated, is not a saleable commodity or goods and the same according to them cannot be equated with the contingent sale of future goods. The petitioners have stated that that a transaction of a contingent sale may be a transfer of property in the future goods but such contingent sale of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kept outside the legislative competence of the State Legislature under entry 54 of List II of the Seventh Schedule to the Constitution of India and, according to them, entry 62 of List II of the said schedule authorises the State Legislature to levy taxes on betting and gambling. The petitioners have further stated that tax on sale of goods cannot be imposed or collected under entry 54 of the schedule, as mentioned above, on the lottery tickets, as they are neither existing goods nor future or unascertained goods within the meaning of the Sale of Goods Act, 1930. The definition appearing in entry 54 of the list and schedule as mentioned above and in article 366(12) of the Constitution of India do suggest only corporeal properties and according to them if the definition of "goods" is given a wide definition and unrestricted meaning so as to include the lottery tickets, a logical sequel will have to be conceded in respect of the power to levy sales tax on such things as railway tickets, air tickets and even the postage stamps. The petitioners have stated the power to levy sales tax on such things will have to be found only under the power of Parliament in terms of article 248 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commodities and articles. According to the petitioners under section 2(7) of the Sale of Goods Act, 1930, "goods" are defined to mean every kind of movable property other than actionable claims and money; and includes stocks and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale. They have stated that the words "future goods" as defined in section 2(6) of that Act of 1930, would mean goods to be manufactured or produced or acquired by the seller after the making of the contract of sale and "specific goods" as defined in section 2(14) of that Act would mean goods identified and agreed upon at the time of the contract of sale. It has also been stated by the petitioners that actionable claim would mean a claim to any commodity other than a debt secured by mortgage of immovable property or to any beneficial interest in such property which are not in the possession either actual or constructive of the claimants which the civil courts recognise as affording ground for relief, whether such debt be of any existing beneficial interest, accruing on the happening of some conditions or conti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to be sale price of the tickets inasmuch as lottery ticket has got no value unless the conditions for prices are contained therein which again is to be distributed among the participants upon drawing of the number contained in the ticket. Sale price as mentioned in section 2(h) of the said Act, according to the petitioners, would mean the amount payable to a dealer as valuable consideration for the sale of any goods, less any amount allowed as cash discount according to ordinary trade practice, but the same includes any sum charged for anything done by the dealer in respect of the goods at the time of or delivery thereof, other than the cost of freight or delivery or the cost of installation when the same is separately charged. In this case, the petitioners have stated that the amount payable by the participants purchasing the tickets from them cannot be said to be the sale of any goods as such the sale of lottery tickets cannot come within the expression of the words "sale price" as defined in section 2(h) of the said Act. According to the petitioners, the taxes on sale of goods, is assigned exclusively to the State Legislature under entry 54, List II, of the Seventh Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated above, the petitioners have stated the same to be contrary to and beyond the legislative competence of the State Legislature. In fact, it has been stated that the State Legislature in imposing the concerned tax on lottery tickets has sought to camouflage or clothe the enactments in a garb so as to bring them within the legislative competence and constitutional validity. It was also the case of the petitioners that equating lottery tickets with the goods would also be a colourable piece of legislation and imposition, if any made, would be outside the purview of the entry, list, as mentioned above. Thus, the said 1984 Amendment or the connected legislation has been claimed by the petitioners to be illegal, invalid and inoperative, apart from being beyond the competence of the State Legislature. The petitioners have further stated that sales tax is imposable on the transaction of sale of goods and as, in the instant case, no sale of goods, even under the exclusive definition of section 2(g) of the said Act as substituted by the said 1984 Amendment is involved in the sale of lottery tickets, such levy of sales tax on the lottery tickets would clearly be illegal and invalid a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances, the petitioners have stated that they will have to pay sales tax at 20 per cent on the value of the lottery tickets, out of the meagre profit of 1/2 per cent which may roughly be retained after meeting all expenses and overhead charges. In such circumstances, the petitioners have claimed and stated that the imposition of sales tax on lottery tickets would completely eliminate them from their arena of business of dealing with lottery tickets, which they have been carrying on for many years. Such imposition of sales tax, according to the petitioners, would not only unreasonably interfere with their fundamental rights of carrying on business as mentioned above but would also completely deprive them of their rights to carry on their business, as they would not be in a position to shift the burden of sales tax, which is sought to be imposed on lottery tickets, to other buyers. The imposition of sales tax, according to the petitioners, would also create restrictions and they have further claimed that such restrictions have no rational nexus to the object sought to be achieved by the imposition of such sales tax. In any event, it has been claimed that the sales tax as sought to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lottery tickets, the petitioners have further stated, would introduce an unreasonable restriction or complete prohibition in the matter of sale of lottery tickets. Such levy, in so far as other States are concerned, the petitioners have stated, would cause an impediment on the trade and commerce guaranteed under article 301 of the Constitution of India, in view of the fact that in most of the States, there is no sales tax on the sale of lottery tickets. The imposition of sales tax on the sale of lottery tickets, the petitioners have claimed, would completely eliminate the sub-agents and small agents from the field and that would totally prohibit the trade and occupation of the petitioners. It was also the case of the petitioners that in view of the concerned amendment of the provisions, the business being run by them, the sub-stockists, the sub-agents and other retailers, have become paralysed, as they are unable to collect any tax on the sale of tickets in such circumstances, the petitioners have stated to be incurring substantial and heavy loss in the business. As such also the concerned imposition has further been claimed to be violative of articles 14 and 19(1)(g) of the Const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fted to the purchasers and the concerned levy and imposition of sales tax on the sale of lottery tickets would not be a tax on the sale of goods within the meaning of entry 54 of List II of the Seventh Schedule. It was his specific case that the imposition of sales tax on the sale of lottery tickets has nothing to do with the 46th Amendment of the Constitution of India, since the power of the State Government to tax sales of goods was always there in the statute. The deponent has further denied that the impugned tax is not a tax on the sale of lottery tickets but the same is licence fee for participating in the draw as claimed. He has also denied that such tax on the sale of lottery tickets is on an actionable claim or is on a wagering contract. He has categorically stated that the tax on the sale of lottery tickets can be imposed and collection under entry 54 of List II of the Seventh Schedule to the Constitution of India as mentioned hereinbefore, can be made. It was also the case of the deponent that a dealer selling goods in West Bengal is liable to pay tax, with effect from the date immediately following the day in which his turnover first exceeds the taxable quantum, on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Legislature in terms of entry 54, List II, of the Seventh Schedule to the Constitution of India. It was also specifically contended by the deponent that the petitioners cannot have any grievance against the levy and imposition of tax on the sale of lottery tickets because it is the consumer or the purchaser who will have to pay the tax and the registered dealers would simply act as agencies for collection of price. In fact, it has been stated that the dealers are agents of the State and nothing precludes them to collect the tax and pass it on to the State. It was also the case of the deponent that those dealers can never be loser after they start collecting the tax and, in any event, if such collection is made by them, the deponent has stated that the dealers would not suffer in anyway. The increase in price of 20 per cent per ticket, according to the deponent, is not a binding factor in the business of selling of lottery tickets and such increase, according to him, would not reduce the turnover of the dealers. As such, the deponent has stated that the tax as sought to be levied cannot be claimed to be violative of articles 14, 19(1)(g), 301 and 304 of the Constitution o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concerned tax is not a tax on the sale of lottery tickets, but an entry fee for participating in the draw for a chance to win prize as declared by the organiser. He has further referred to rule 3(1) of the West Bengal State Lottery Rules, 1968 (hereinafter be referred to as the said Rules), which lays down that tickets for every draw of the State lotteries shall be issued in the denomination of rupee 1 only, provided that the Government shall have the power to charge the price of all the tickets for any draw or draws after due publicity before the commencement of the sale of tickets for such draw. According to the deponent, such being the position of the concerned rule as a result of the impugned amendment, the petitioners are not authorised by the State Government to collect more price than the price as declared in terms of the said rule 3(1). He has also stated that under the said rule, only the Government has power to increase the price of the lottery tickets under the certain conditions as specified and as such there cannot be any way out but to hold, that in case the concerned imposition is allowed, the petitioners would suffer much, as they would not be in a position to inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Act 11 of 1974), the West Bengal Rural Employment and Production Act, 1976 (West Bengal Act 16 of 1976), and the West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979 (West Bengal Act 6 of 1979), for the purposes and in the manner hereinafter appearing. The statement of objects and reasons for having the amendment to the said Act are also quoted hereunder: "(a) to levy sales tax consequent upon the 46th Amendment of the Constitution: (1) on transfers of the right to use goods for any purpose and transfers of property in goods (whether as goods or in some other form) involved in the execution of a works contract at the rate of 4 per cent and (2) on deliveries of goods on hire-purchase at the rate applicable in respect of sale of such goods; (b) to levy on sales of lottery tickets at the rate of 20 per cent; (c) to withdraw the benefit of special rate of tax of 3 per cent on sales of tea to registered dealers at auction centres at Calcutta and Siliguri; (d) to change the exemption limit of sales of cooked food from Rs. 15 to Rs. 10; (e) to withdraw tax on purchases of goods by the contractors for use in execution of contracts; (f) to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment and by incorporation of sub-clause (dd) after section 5(1)(d) now stands at 20 per centum of such part of dealer's taxable turnover as represents his sales of lottery tickets and section 7 which deals with registration of dealers. Dr. Pal also wanted to contend that lottery tickets are not goods and as such they would not be liable to sales tax. Dr. Pal also submitted that "sale" under the said Act means, "any transfer of property in goods for cash or deferred payment or other valuable consideration including a transfer of property in goods involved in the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge. Explanation 1.-A transfer of goods on hire-purchase or other instalment system of payment shall, notwithstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale; Explanation 2.-A sale shall be deemed to take place in West Bengal if the goods are within West Bengal (a) in the case of specific or ascertained goods, at the time the contract of sale is made; and (b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more particularly for ascribing to the meaning of the same, the particulars whereof have been indicated hereinbefore. Dr. Pal contended that lottery ticket is an actionable claim which means a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in immovable property not in the possession, either actual or constructive, of the claimant, which the civil courts recognise as affording grounds for relief, whether such debt or beneficial interest is existent, accruing, conditional or contingent and such claim creates contractual obligations but without any involvement of transfer of property. To establish the real character of lottery ticket reference was made firstly to the case of Barclay v. Pearson [1893] 2 Ch 154, where the defendant, who was the proprietor of a newspaper, carried on in connection therewith a competition under the following conditions. He published in his paper a paragraph omitting the last word. In the same paper he printed a coupon with a direction that persons wishing to enter the competition must cut out the coupon, fill in the word missing from the paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been observed that the right to claim the benefit of a contract for the purchase of goods is a "beneficial interest in moveable property" within the definition of "actionable claim" in section 3 of the Transfer of Property Act (4 of 1882), and as such assignable. In that case it has further been indicated that, "the benefit of a contract, that is, the beneficial right or interest of a party under the contract and the right to sue to recover the benefits created thereby are assignable, provided that- (a) the benefit is not coupled with any liability or obligation that the assignor is bound to discharge and (b) the contract has not been induced by personal qualifications or considerations as regards the parties to it", and on such observations, Dr. Pal contended that the benefit due to be derived from a lottery ticket would thus be assignable. The question of assignability of a contract or the law relating thereto has been laid down by the Supreme Court to the effect that an assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well-recognised distinction between these two classes of assignments. As a rule obl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to a writ. Case law relied on. It has also been observed in the case of Sir Dorabji Jamshedji Tata, Kt. v. Edward F. Lance AIR 1917 (42) Bom 676 that a contract to purchase a ticket in a lottery though sanctioned by Government is void and that being the position, injunction cannot be granted in support of such void contract. The said determination was made on the basis of the provisions in section 30 of the Indian Contract Act, which provides that "agreement by way of wager are void" and also that "no suit shall be brought for recovering anything alleged to be won on any wager, etc.". The two portions of the section as indicated above were of course held to be independent. In view of the decisions as above Dr. Pal wanted to argue that the contract as entered through and by and between the purchaser of a lottery ticket and the Government or the organisers of the lottery is a wagering and not a valid contract and as such the same cannot be enforced. The lottery tickets as involved in this proceeding are admittedly sold subject to rule 3(1) of the said Rules and so far as the West Bengal State Lotteries are concerned, the purchase price of a ticket has been fixed at Re. 1. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar whereof have been indicated hereinbefore, has been sought to be amended as under: "(a) ................................................... (b) ................................................... (c) ................................................... (d) in clause (g),- (i) for the words beginning with '"sale" means' and ending with 'charge or pledge.', the following words shall be substituted: '"Sale" means any transfer of property in goods for cash or deferred payment or other valuable consideration, and includes- (i) any delivery of goods on hire-purchase or any system of payment by instalments, (ii) any transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration, or (iii) any supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration, and such delivery, transfer or supply of any goods shall be deemed to be a sale of those goods by the person making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which the common law did not provide; third, what remedy the Parliament hath resolved and appointed to cure the disease; and, fourth, the true reason of the remedy; and then the office of all the Judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and pro privato commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bona publico.", apart from holding that the marginal note to article 286 is "Restrictions as to imposition of tax on the sale or purchase of goods", which, unlike the marginal notes in Acts of the British Parliament, is part of the Constitution as passed by the Constituent Assembly, and Prima facie, furnishes some clue as to the meaning and purpose of the article. In that case, it has also been held that there are four separate and independent restrictions placed upon the legislative competency of the States to make a law with respect to matters enumerated in entry 54 of List II of the Seventh Schedule. In order to make the ban effective and to leave no loophole the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion, as indicated above, was that of S.C. Prashar v. Vasantsen Dwarkadas [1963] 49 ITR (SC) 1, where it has been observed that it is indeed true that the statement of objects and reasons for introducing a particular piece of legislation cannot be used for interpreting the legislation if the words used therein are clear enough. But the statement of objects and reasons can be referred to for the purpose of ascertaining the circumstances which led to the legislation in order to find out what was the mischief which the legislation aimed at. From the above determinations, one thing is certain that in case of ambiguity, the objects of a legislation can be looked into. On a reference to the averments in the petition, Dr. Pal then contended that the provisions of sections 6(1)(aa), 5(1)(dd), 5(2)(a)(vb) and 5(2)(b)(iva) of the said Act are violative of article 19(1)(g) of the Constitution of India as by incorporation of them the fundamental right of the petitioners to carry on their business, has been sought to be interfered with. The other relevant facts and pleadings as available, have been indicated hereinbefore. Dr. Pal claimed that in this case the petitioners have the factual fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government order as referred to above. Thus, sales tax having been levied now on lottery tickets, the writ petitions as indicated hereinbefore, were filed and pending disposal of them, prayers were made for the stay of imposition of the taxes and the point which arose for consideration was whether lottery ticket is "goods" or not. On the basis of the definition of "actionable claim" or in respect of section 3 of the Transfer of Property Act, section 2(7) of the Sale of Goods Act and article 366(12) of the Constitution of India wherein "goods" is defined as including all materials, commodities and articles, which was also the claim in this case, it was contended in that case that no levy of tax could be imposed. In that case, like that of the case before us it was contended that in view of the facts and definition as indicated above, an incorporeal right was involved and checked with gambling element only and nothing more, lottery ticket could not be treated as "goods" and the more so when the same is not a movable property. In the case of Commissioner of Sales Tax, Madhya Pradesh, Indore v. Madhya Pradesh Electricity Board [1970] 25 STC 188 (SC), which case was referred to in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... movable property and the expression "all kinds of movable property" in the definition of "goods " in the Madras General Sales Tax Act, 1959, would necessarily take within its sweep even intangible or incorporeal movable property, apart from holding that the expression "goods" has not been defined in article 311 of the Constitution of India in an exhaustive manner. It may be that in so far as incorporeal movable property is concerned, there might be difficulties in levying the appropriate tax, such as those contemplated in entry 30, 84 or 89 of List I or entry 51, 52 or 56 of List II of the Seventh Schedule of the Constitution. But that cannot control the definition of "goods" in any way. Notwithstanding the fact that the expressions employed in defining "goods" embody only the natural sense of the word, it cannot be held that "goods" has been restrictively defined in the Constitution to comprise only materials, commodities and articles, that is to say, concrete goods. Therefore the definition of "goods" in the Madras General Sales Tax Act, 1959, as meaning all kinds of movable property, does not go beyond the meaning given to that expression in the Constitution and has made a dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that would be transitional and momentary and ultimately such imposition would have no impact on the legality of the levy as made. Such being the position, even though we are not required to answer the question on the propriety of the levy or imposition of sales tax on the basis of articles 301 and 304 as indicated above, we feel that the imposition if made or allowed would not make the levy as made in colourable exercise of powers. Like the Tamil Nadu Act hereunder the said Act "lottery ticket" has not been defined and the learned Judge in that unreported determination of the Madras High Court has referred to the definition of "lottery ticket" in section 55(1) of the Betting, Gambling and Lotteries Act, 1963, of England where "lottery ticket" has been defined as "any document evidencing the claim of any person to participate in the chances of a lottery". Such definition in our view has not given any deviated version to the meaning of "lottery ticket" as mentioned hereinbefore and which was put forward at the Bar. On a reference to Murray's Dictionary and Halsbury's Laws of England, it would appear that "lottery ticket" is nothing but a scheme for distribution of prizes of lot or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticket is an actionable claim and as such, the said determination cannot and should not be looked into or applied in this case. He further claimed that the case of Commissioner of Sales Tax, Madhya Pradesh, Indore v. Madhya Pradsh Electricity Board [1970] 25 STC 188 (SC) is not applicable in the instant case and the same is distinguishable. In fact, Dr. Pal claimed and contended that the said unreported judgment of the Madras High Court is not really or strictly speaking a decision on the issues as involved, but the same is only an order, whereby neither the rights of the parties nor the point in issue in that case have been finally decided. It was further claimed by him that in the said unreported judgment of the Madras High Court the case of A.V. Meiyappan v. Commissioner of Commercial Taxes, Board of Revenue, Madras [1967] 20 STC 115 was referred to without considering the decision as a whole or what was in fact decided. We feel that it is very difficult for us to agree with such submissions of Dr. Pal or to accept them. We are also not in a position to agree with the submissions of Dr. Pal that the unreported decision of the Madras High Court, as mentioned hereinbefore, is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esults in transfer of absolute rights in the ticket in favour of the buyer by mutual consent and consideration and whatever be the ultimate outcome of such bargain, may be in one form of prize or in total loss of investment, and whatever be the speculative element, such sale results in transfer of interest in a movable property for value at the time of the sale. Such submissions of Mr. Gooptu were really in the same line as found in the unreported Madras decision as referred to hereinbefore. It was further claimed and contended by Mr. Gooptu that lottery ticket would be "goods" within the meaning of section 2(d) of the said Act as amended and sale thereof would constitute "sale price" as defined in section 2(h). He has further stated that the State Government has no concern or interest in the scheme or manner under which a particular lottery takes place or is run by any organisation. According to him the price of the lottery ticket is not in the nature of fee on speculation rather the same is a base for the levy of sales tax on goods. He has also contended that the tax as imposed is not a tax on chance or on any future event and such tax as imposed cannot be claimed to be made in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It should be noted that the present imposition of tax has been made effective from 1st May, 1984. It was Mr. Gooptu's further and specific contentions that lottery ticket is not an actionable claim and according to him the definition of "goods" under the said Act is inclusive and not exhaustive. The reference as made by him to the cases reported in A.V. Meiyappan v. Commissioner of Commercial Taxes, Board of Revenue, Madras [1967] 20 STC 115 and Commissioner of Sales Tax, Madhya Pradesh, Indore v. Madhya Pradesh Electricity Board [1970] 25 STC 188 (SC) have been mentioned hereinbefore and apart from them he also referred to the case of J.K. Trust, Bombay v. Commissioner of Income-tax/Excess Profits Tax, Bombay [1957] 32 ITR 535 (SC), where it has been observed that "property" is a term of the widest import, and subject to any limitation or qualification which the context might require, it signifies every possible interest which a person can acquire, hold and enjoy and business would undoubtedly be property, unless there is something to the contrary in the enactment apart from holding that there is nothing in section 4(3)(i) of the Indian Income-tax Act, 1922, which restricts in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bscribe to the view that "lottery ticket" is a wagering contract. We must also keep it on record that Dr. Pal, while on the point on consideration, made reference to the case of Kaluram v. Ramdayal decided by Mr. Stanyan, A.C.I., of the Nagpur judicial Commissioner's Court in Second Appeal No. 748 of 1908 as reported in [1909] 3 IC 55. That determination was made on 16th April, 1909, in a case where during the pendency of a suit for possession, the parties requested to one "G" to decide their case by arbitration. "G" proposed that a lottery might be put and one who obtained the "winning ticket" should win the subject-matter of the suit. The parties agreed to this. Accordingly a lottery was put and the defendant won the property. On such facts it has been held, (1) that "G" did not act as an arbitrator; he was no doubt appointed an arbitrator but he did not accept the proposal, instead he made a counter-proposal that the parties should refer the dispute, not to his own judgment, but to chance. An actor or a manager in a lottery is not an arbitrator in any sense, (2) that the result of the lottery was not an arbitration award. The result was not controlled by any opinion of the perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ckets" have been made by the State Legislature in exercise of their independent right under the Constitution of India and as such, these incorporations cannot be said to be void, illegal, ultra vires or made in excess of powers or in colourable exercise of the same. We further keep it on record that the question of violation of article 19(1)(g) has not been determined by us on the basis of concession as indicated hereinbefore and as made by Mr. Gooptu. "Lottery tickets", in terms of the determinations as cited at the Bar and the tests as laid down therein, should thus be deemed to be "goods" in terms of the definition of "goods" as in section 2(d) of the said Act, as amended, and so the imposition and levy of sales tax on them, in our view, must be upheld. The rule which was referred for determination before the Division Bench, thus fails and the same is discharged. There will however be no order as to costs. In view of the above the appeal is also disposed of without entering into the respective contentions and submissions including submissions regarding the maintainability of the same. The oral prayer for a certificate under article 133 of the Constitution is refused, as we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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