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TMI Blog1990 (12) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged the levy before the Supreme Court and the Supreme Court by its judgment in H. Anraj v. Government of Tamil Nadu [1986] 61 STC 165; AIR 1986 SC 63, held that the State Government has power to impose levy on sale of lottery tickets. While so, in exercise of the powers conferred by section 53 of the Act, the Tamil Nadu Government, by G.O. Ps. No. 1158, Commercial Taxes and Religious Endowments, dated October 20, 1984, effected amendments to the Tamil Nadu General Sales Tax Rules, 1959, hereinafter referred to as "the Rules", by introducing sub-rules (18), (19) and (20) to rule 26 of the said Rules. Sub-rules (18) to (20) are as follows: "(18) Every dealer in lottery tickets shall maintain in respect of all tickets liable to tax on the sales effected by him, in addition to the other accounts maintained in the usual course of his business or in accordance with the other provisions of these rules, a day-to-day sales-cum-stock account in form XXX-A and a monthly account of all receipts and sales of lottery tickets, State-wise, in form XXX-B. (19) Every dealer in lottery tickets shall maintain, in respect of all tickets not liable to tax on the sales effected by him, a daily ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tical and disproportionate to any evil sought to be remedied and that the amendments fetter the petitioners' right to deal with the property. 5.. It is also stated that the impugned amendments have a telling effect on the sale of what are called daily lotteries, i.e., lotteries in which there is a draw every day and it has been found impossible to do so consistent with the individual ticket sealing procedure introduced by the impugned amendment and that the respondents do not have the necessary staff or machinery or infrastructure to seal every lottery ticket of the petitioners each day before sale. It is also stated that the State has not prescribed any procedure for stamping/sealing of other articles of other States sold in Tamil Nadu. It is stated that the tax on sale cannot be augmented by stifling the very sales and if the impugned rule makes the sale itself effectively and practically unworthwhile, sales tax collection can certainly not be expected to increase. The more easy the sale, the more sales tax is leviable and that the petitioners have to incur extra expenditure to have sufficient number of staff in order to comply with the formal requirement of the amended rules. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate the procedure for the purpose of implementing the provisions relating to the levy of tax. It is stated that there is legislative control in the framing of the rule so that the rule making powers may not become arbitrary and abuse of power without fear of check or control does not take place. There are procedural safeguards provided to keep watch over the exercise of these powers by the administrative authorities. The amended rules do not vitiate any constitutional provisions. The rules are framed in order to prevent evasion of tax. It is stated that it is the department to seal the tickets for the purpose of sale and it is the burden on the department to make arrangements and to provide adequate measures to seal the tickets. It is competent for Legislature to make all such incidental and ancillary provisions as may be necessary to effectuate the law. In the absence of such a provision, it would be impossible, to track the movement of sales of lottery tickets of other States. In the absence of such regulatory measures, it would be practically impossible to prevent evasion and suppression of sales of raffle tickets and that the petitioners cannot assume that there could be no saf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealers are expected to maintain day-to-day sales-cum-stock account in form XXX-A and monthly account of all receipts and sales of lottery tickets State-wise in form XXX-B and also to maintain in respect of all tickets not liable to tax on the sales effected by them, a daily account in form XXX-C and that is practically not possible to maintain day-to-day of day account, having due regard to the nature of the business that is being transacted by the dealers, viz., that the dealers have to distribute the tickets to various agents and it is not possible to make an entry in forms XXX-A, XXX-B and XXX-C. The said contention can be said to be well-founded because the practical difficulties pointed out by the learned counsel for the petitioners are possible by reason of the fact that dealers cannot be in a position to get the details of the sale on the very same day, with the result the dealers should be put into difficulties to maintain day-to-day or daily account, as required under sub-rules (18) and (19) to rule 26 of the Rules. 11.. On going through the forms XXX-A, XXX-B and XXX-C, there appears to be no requirement that the details in the forms should be filled on the very same d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prevent evasion of tax such regulatory measures have to be imposed. Considering the above, it can be said that the contention of the State Government in this behalf is also well-founded. But the State Government has to take note of the hardship that is being experienced and explained by the learned counsel for the petitioners and it should be alleviated by improving the State machinery and by providing adequate staff so as to comply the formalities of sealing of all the tickets produced each day and if this is done the petitioners cannot have any grievance at all. That apart, the petitioners have no grievance at all and the petitioners have not contended that the impugned sub-rules have suffered any other infirmity except that what they have contended hereinabove and as such it cannot be said that the impugned rules are liable to be struck down for the reasons stated by the petitioners supra. 14.. It is, in these circumstances, made clear that the State Government should take note of the observation made hereinabove with reference to the obligation on the part of the petitioners to submit their returns once a week and also with reference to the responsibility of the State to im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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