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TMI Blog1998 (7) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... the Black's Law Dictionary (6th Edn, p.947). It goes on to say- An unlawful gambling scheme in which (a) the players pay or agree to pay something of value for chances, represented and differentiated by numbers or by combinations of numbers or by some other media, one or more of which chances are to be designated the winning ones; and (b) the winning chances are to be determined by a drawing or by some other method based upon the element of chance; and (c) the holders of the winning chances are to receive something of value. 2. Lottery is a game of chance and hence like gambling it is a vice. Gambling is as old as the human ingenuity itself. So is the history of attempts at controlling if not preventing the evil. The expression 'Betting and gambling' included and has always been understood to have included the conduct of lotteries. That is Entry No.34 of List-II of Seventh Schedule. However, lotteries organized by the Govt of India or the Govt of a State have been included in Entry No.40 of List-I of the Seventh Schedule of the Constitution. 3. 'Gambling ( Dyuta) has been considered as a pernicious vice in all the works of Dharmashastras, but the instinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by other law givers when conducted ( with the permission of the King) subject to payment of tax to the King. Contents of para 3 borrowed from Legal Constitutional History of India, M.Rama Jois, Vol I, Ch.13, para 1 at pp 207-209) 4. Before the Supreme Court the first dispute as to lotteries was agitated and decided in H. Anraj, Vs . State of Maharashtra [1984]2SCR440 (hereinafter H. Anraj-I, for reference ). It appears that the Govt of Maharashtra and various other State Govts were requesting Union Govt to authorise them to conduct lotteries for the purpose of finding funds for advancing their development plans. Such authorisation was strictly not necessary in the absence of law made by Parliament pursuant to Entry 40 List-I of Seventh Schedule. Article 298 extends the executive power of the Union and of each State to the carrying on of any trade or business and to the acquisition, holding and disposal of the property and making of contracts for any purpose with the stipulation that if trade business or purpose is not one with respect to which Union may make laws, the said executive power of Parliament shall be subject in each State to legislation by the State and if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o forbear from giving effect to the ban on the sale of tickets of lotteries organized by other States. 5. The effort of State of Maharashtra to prevent the evil of lotteries extended by other states into its territory thus failed ( though the State of Maharashtra intended to continue with its own evil of lottery, rather consistently, by monopolising its own lottery within its own State by excluding other States). The lottery trade by several Governments of States thus came to hold the field. 6. Then comes H. Anraj Vs . Government of Tamil Nadu AIR1986SC63 (referred to hereinafter as Anraj-II.) Tamil Nadu General Sales Tax Act 1959 and Bengal Finance ( Sales Tax ) Act, 1941 were amended respectively w.e.f. Jan 28,1984 and May 1,1984 so as to bring the lottery tickets within the purview of the charge of sales tax and to levy tax on the sale of such tickets @ 20% at the point of first sale in the State. Presumably this was done in exercise of its own independent taxing power under Entry 54 of List-II in the Seventh Schedule of the Constitution. Several writ petitions were filed challenging the amendment and levy of tax on sale of lottery tickets raising the question of law- whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e price, if any, refunded by the dealer to a purchaser in respect of any goods purchased and returned by the purchaser within the prescribed period : 4. Rate of tax_ (1) The tax payable by a dealer under this Act shall be levied (a) in the case of taxable turnover in respect of the goods specified in the First Schedule, at the rate of twelve paise in the rupee; (b) in the case of taxable turnover in respect of the goods specified in the Second Schedule at such rate not exceeding four paise in the rupee as the Central Govt may, from time to time by notification in the Official Gazette determine; (c) in the case of taxable turnover in respect of any food or drink served for consumption in a hotel or restaurant or part thereof with which a cabaret floor show or similar entertainment is provided therein, at the rate of forty paise in the rupee; (d) in the case of taxable turnover in respect of any other goods, at the rate of seven paise in the rupee: Provided that the Administrator may with the previous approval of the Central Govt and by notification in the Official Gazette, add to, or omit from, or otherwise amend, the First Schedule or the Second Schedule eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NEW DELHI-110002 ATTN: ALL LOTTERY DEALERS It is notified for information of all concerned that lottery tickets are now taxable at 20 paise in a rupee at first point. For the convenience of the dealers engaged in the business of the sale of lottery tickets, a Lottery Cell has been created in the Department to give a centralised service and render assistance for the purpose of registration, levy and collection of tax and assessments of such cases. Please note that it is an offence to carry on the business of lotteries after incurring the liability under the Delhi Sales Tax Act without seeking registration from the Department. All concerned are, Therefore advised to immediately apply for registration as per the provision contained in the Delhi Sales Tax Act. In case of any difficulty please do not hesitate to contact STO (Lottery Cell Tel No. 3318487, 3318556 Extn 3603) or in person in room No. 312, Third Floor, Bikrikar Bhawan, MSO-II NEW DELHI-110002. Commissioner DIP/291/95/K Sales Tax: New Delhi 10. It is interesting to note while Presidential Order authorises the Government of States entering into lottery business and the decision of the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me time in the year 1996 and 1997. All the petitioners seek a declaration that the provisions of Section 4(1)(cc) of Delhi Sales Tax Act 1975, as inserted by the Delhi Sales Tax (Second Amendment) Act, 1994 w.e.f. 2.1.1995 are unconstitutional and void. The relief of quashing of the notices is also sought for . 13. CWP 1254/97 is filed by Haryana State Lottery. During the pendency of the petition, an order of assessment (Annexure-P/10) has been passed on 26.3.1997 whereby a demand of ₹ 59,60,000/- under Delhi Sales Tax Act and a demand of ₹ 10 lakhs under Central Sales Tax Act relevant to the period 1990-91 has been raised. An application for amendment in the writ petition has been filed by the petitioner seeking the setting aside of the said order of assessment. 14. In CWP 2106/97 filed by Rajasthan State Lottery Deptt an order of assessment, (Annexure-P/9), has been passed on 31.3.1997 by STO Ward 89 (Lottery Cell) whereby gross turnover/taxable turnover of the petitioner for the period 1990-91 has been assessed at ₹ 43,11,09,874/- resulting into a demand of tax to the tune of ₹ 3,01,77,691/-calculated @ 7% plus a penalty of ₹ 5,000/-. 15. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of about 8-9 years, the law should be deemed to have been repealed by doctrine of desuetude and Therefore levy and recovery of sales tax on sale of lottery tickets cannot be enforced; (vi) That until the year 1996-97 the authorities administering the sales tax law as also all those dealing in the lottery tickets believed that trading in lottery tickets did not attract the applicability of sales tax law. By applying principle of contemporanea expositio the sales tax law should be so interpreted as to hold that the lottery tickets were not 'goods' and were not liable to levy of tax; (vii) That the impugned amendment and the impugned notice under Section 23(6) of the DST Act are vitiated by malafides and hence are liable to be annulled. (viii) That tax on lottery tickets @ 20% is unreasonable and discriminatory; hence hit by Art. 14. 19. On behalf of the respondents a brief counter has been filed in practically all the petitions. It is submitted that the impugned amendment is constitutionally valid and is within the legislative competence of the Legislative Assembly of National Capital Territory of Delhi. The impugned Amendment Act is not repugnant to any pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce liable to sales tax; the controversy sought to be raised by the petitioners stands concluded by H.Anraj-II and cannot now be permitted to be revived. Thus each of the contending parties has tried to read the law laid down in H.Anraj-II as supporting its own plea. 24. Learned counsel for the petitioners have relied on the following passages from the judgment of the Supreme Court :- Every participant is required to purchase a lottery ticket by paying a price Therefore (the face value of the ticket) and such purchase entitles him not merely to receive or claim a prize in the draw, if successful but before that also to participate in such draw. In other words, a sale of lottery ticket confers on the purchaser thereof two rights (a) a right to participate in the draw and (b) a right to claim a prize contingent upon his being successful in the draw. Both would be beneficial interests in movable property, the former `in praesenti', the latter `in futuro' depending on a contingency. Lottery tickets, not as physical articles, but as slips of paper or memoranda evidence not one but both these beneficial interests in movable property which are obviously capable of being tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of lottery tickets cannot be separated from the value of actionable claim included in it and ascertained for computing the tax liability and Therefore the levy must fail. 27. To test the validity of these submissions made by either party, we shall have to examine the law laid down by their Lordships in H.Anraj-II (supra) in little more details. 27.1 Question posed before their Lordships was: whether sales tax can be levied by a State legislature on the sale of lottery tickets in the same State ? 27.2 Tamil Nadu General Sales Tax Act, 1959 was amended w.e.f. 28.1.1984. A similar amendment was made in Bengal Finance ( Sales Tax) Act, 1941 w.e.f. May 1, 1984. The result of both amendments was to bring the lottery tickets within the purview of the charge to tax @ 20% on the sale of such tax at the point of first sale in the State. 27.3 The plea raised on behalf of the petitioner who was a licensed dealer in the lottery tickets was that the lottery was a chance for a prize for a price and sale of such a chance was not a sale of goods. Relevant definitions under the two acts defined the 'goods' to mean all kinds of movable property but specifically excluded actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in united States v. Mueller (178 2nd Series) Federal Reports 593) ( supra) on which counsel for dealers relied the court while emphasising the aspect that lottery tickets are more in the nature of choses in action (because of the right to claim a prize by chance) has observed that these are merchandise in the limited sense. The aforesaid aspect of the matter really clinches in my view the position that for the purpose of imposing the levy of sales tax lottery tickets comprising the entitlement to participate in a draw will have to be regarded as `goods' properly so called (pr. 29) It is true that this entitlement to a right to participate in the draw is an entitlement to beneficial interest which is of incorporeal or intangible nature but that cannot prevent it from being regarded as goods. (pr.30) ..right to participate in the draw under a lottery ticket remains a valuable right till the draw takes place and it is for this reason that license agents or wholesalers or dealers of such tickets are enabled to effect sales thereof till the draw actually takes place and Therefore lottery tickets, not as physical articles but as slips of paper or memoranda evidencing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the expression 'goods' say that it includes all kinds of 'movable property' and Therefore, it becomes necessary to notice the meaning of the expression 'movable property' which was not defined in the Sales Tax enactments. The definition in the respective State General Clauses Acts was not very helpful as all that they said was that the movable property means property of every kind except immovable property. Accordingly, their Lordships proceeded to refer to Black's Law Dictionary, Jowitt's Dictionary of English Law, Dictionary of Commercial Law by A.H. Hudson and Salmond's Jurisprudence and concluded that the expression 'movable property' includes corporeal as well as non-corporeal property. Applying the principles so deduced to REP licence, their Lordships held, vide para 24, that REP licences have their own value. They are bought and sold as such. They are traded and dealt with in the commercial world as merchandise, as goods. Thus a REP license is by itself a property and it is for this reason that it is freely bought and sold in the market. For all purposes and intents, it is goods. Unrelated to the goods which can be imported o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng not earned a prize should be kept in view. Once the draw takes place a ticket which has failed to earn any prize becomes a useless piece of paper or a waste merely. Such of the tickets which have earned a prize, become actionable claims entitling the purchaser to claim the prize. Therefore, so long as the draw has not taken place the lottery ticket remains goods. 31. We are constrained to observe that the controversy sought to be raised by the petitioners on the issue whether the lottery tickets are 'goods' is wholly unwarranted in view of the authoritative pronouncement of their Lordships in H.Anraj-II which has set at rest the entire controversy and it is only unfortunate that such controversy should have been reopened. The petitioners are trying to make a capital out of the phraseology used by their Lordships in para 33 of the judgment and quoted hereinabove in para 24- lottery tickets to the extent that they comprise the entitlement to participate in the draw are goods properly so called . They are utilising this phraseology to contend that their Lordships have held the lottery tickets comprising partly of the goods and partly of the actionable claim (not goods.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax in the absence of the Constitutional amendment analogous to Clause (29A) of Article 366 as inserted by 46th Amendment? It was submitted by the counsel for the petitioners that if only a part of the property involved in the transaction passes as goods, and such two components be indivisible or not separable, the transaction in its entirety would not be susceptible to sales tax. Attention of the court was invited to a series of decisions beginning with First Gannon Dunkerley's case (1958) 9 STC 3531 and various cases thereafter such as State of Himachal Pradesh Vs. Associated Hotels of India Ltd (1972) 29 STC 474, Hindustan Aeronautics Ltd vs State of Karnataka (1984) 55 STC 314 , Builder Association of India Vs. UOI (1989) 73 STC 370 and Gannon Dunkerley Co Vs. State of Rajasthan (1993) 88 STC 204 . Most of the cases relate to works contract and hoteliers, whereat in pursuance of the performance of the building or service contracts some property in goods also passed to the other party and in such circumstances their Lordships held that where the transaction was one entire and indivisible involving transfer in part of the property in goods so as to amount to sale of goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1.2.1992. Clause (3) of this Article which is relevant for our purpose, is extracted and reproduced hereunder :- 3(a) Subject to the provisions of this Constitution, the Legislative Assembly shall have power to make laws for the whole or any part of the National Capital Territory with respect to any of the matters enumerated in the State List or in the Concurrent List in so far as any such matter is applicable to Union territories except matters with respect to Entries 1,2 and 18 of the State List and Entries 64,65 and 66 of that List in so far as they relate to the said Entries 1,2 and 18. (b) Nothing in sub-clause(a) shall derogate from the powers of Parliament under this Constitution to make laws with respect to any matter for a Union territory or any part thereof. (c) If any provision of a law made by the Legislative Assembly with respect to any matter is repugnant to any provision of a law made by Parliament with respect to that matter, whether passed before or after the law made by the Legislative Assembly, or of an earlier law, other than a law made by the Legislative Assembly, then in either case, the law made by Parliament, or, as the case may be, such earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assembly so created was empowered by Clause (3) of the said Article to make laws for the whole or any part of the National Capital Territory with respect to any of the matters enumerated in the State List or in the Concurrent List in so far as any such matter is applicable to Union territories except matters with respect to Entries 1,2 and 18 of the State List and Entries 64,65,66 of that List in so far as they relate to the said entries 1,2, and 18. Clause (3) further provides that the power conferred upon the Legislative Assembly of Delhi by the said Article shall not derogate from the power of the Parliament to make laws with respect to any matter for a Union Territory or any part thereof . It further provides that in case of repugnancy, the law made by the Parliament shall prevail, whether the Parliamentary law is earlier or later to the law made by the Delhi Legislative Assembly. The Parliament is also empowered to amend, vary or repeal any law made by the Legislative Assembly. 38.1 Article 239AA came into force w.e.f. 1.2.1992. Pursuant to the Article, the Parliament enacted the Government of National Capital Territory of Delhi Act. It not only provided for constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act to prove that it is unconstitutional. Prima facie, there does not appear to us to be any inconsistency between the State Act and the Central Act. Before any repugnancy can arise, the following conditions must be satisfied 1. That there is a clear and direct in -consistency between the Central Act and the State Act. 2. That such an inconsistency is absolutely irreconcilable. 3. That the inconsistency between the provisions of the two Acts is of such a nature as to bring the two Acts into direct collision with each other and a situation is reached where it is impossible to obey the one without disobeying the other. 42.1. Having made a review of the authorities available on the point, their Lordships have summed up the following principles vide para 35 :- 35. On a careful consideration, Therefore, of the authorities referred to above, the following propositions emerge :- 1. That in order to decide the question of repugnancy it must be shown that the two enactments contain inconsistent and irreconcilable provisions, so that they cannot stand together or operate in the same field. 2. That there can be no repeal by implication unless the inconsistency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment, the lottery tickets have ceased to be 'any other goods' within the meaning of clause (d). The two provisions can Therefore stand together: while clause (cc) would apply to lottery tickets, clause (d) would apply to 'any other goods'- not covered by clauses (a)(b)(c) until 2.1.95 and not covered by clauses (a)(b)(c) and (cc) w e.f.2.1.95. 45. In Cantonment Board Mhow Vs. MRSRTC [1997]3SCR813 their Lordships have held that if any harmonious construction can be worked out by which both the provisions suggested to be repugnant remain operative, it is the duty of the court to adopt such construction. 46. Thus, there is no repugnancy between the amendment inserted as clause (cc) by the Legislative Assembly for the National Capital Territory of Delhi and the provisions of Section 4 of the Delhi Sales Tax Act, 1975 as they stood enacted by the Parliament. (V) Whether DOCTRINE OF DESUETUDE hits levy of tax on sale of lottery tickets ? 47. The plea based on the doctrine of desuetude was raised and most vehemently canvassed by Shri Raja Ram Aggarwal, learned Sr Advocate appearing for the petitioner in CWP 530/97. The learned counsel submitted that assumi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce for such period for which the law itself was slumbering. Secondly, the principle of contemporanea expositio will be attracted, as every one dealing with the sales tax law in the State was not only under an impression but also believed that lottery tickets were not goods. Those who have dealt in lottery tickets cannot now be made to suffer by interpreting the law in such a way as would run counter to the contemporaneous belief and let the citizens suffer in retrospect. Strong reliance was placed by Mr Aggarwal, Sr Advocate on the law laid down by their Lordships of the Supreme Court in a recent decision delivered in Municipal Corporation for City of Pune Vs. Bharat Forge Co Ltd (1995) 3 SCC 434 . 48. First we will deal with the principle of desuetude. Black's Law Dictionary ( 6th Edn 1990 ) defines desuetude to mean- disuse, cessation, discontinuance of use, especially in the phrase 'to fall into desuetude.' Applied to obsolete practices and statutes. 49. It would be appropriate to have a review of the opinion of the jurists on the principle of desuetude. Craies on the Statute Law ( 7th Edn, 1971) dealing with the principle at pages 6-7, states : .......a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to be imposed for a statutory offence, it is likely to take account of practical obsolescence where it exists. So recently as 1979 Omrod J cited approvingly Bacon's dictum: 'Therefore let penal laws, if they have been sleepers of long or if they be grown unfit for the present time be by wise judges confined in the execution'. The courts are quite willing to apply the term 'obsolete' to an Act. Moreover where judges dislike an Act, their decisions tend to reflect the Fact. 51. Crawford in Statutory Construction, (1998 Edn), states (vide para 133) that the power to repeal i.e. the power to abrogate or revoke the existing legislation is a legislative function or attribute. By way of footnote, the learned author has noticed Mix v. Illinois Central R. Co. 116 III 502 6 NE 42 taking the view:- Still statutes may be repealed by non-user or desuetude. The instances are numerous of statutes being repealed in fact- a kind of silent legislation. As to the abrogation of statutes by `non-user', there may rest some doubt; for myself, I own my opinion is, that non-user may be such as to render them obsolete, when their objects vanish or their reason cease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not obey such provisions, and the administrators of such penal laws do not apply them. Long unenforced, these acts are in fact a dead letter. (p. 558 supra) 53.2 Despite the legislature's failure to repeal such acts two points can be preliminarily suggested. First, a very long continued and well settled failure to enforce a widely-ignored statute is as much a positive expression of public policy as would be its express legislative abrogation. Second, when the community acquiesced in an enactment's long continued administrative nullification, the provision disappears as law in any meaningful sense. (p. 560 supra) 53.3 Abrogation by desuetude, however, required greater proof than the state's mere failure to enforce the enactment for a protracted period. A tacit consent to the act's demise could not be realistically inferred from just any protracted failure to enforce it. Merely protracted customary failure to apply a statute is not enough. A statute would fall into desuetude only if the long failure to enforce it was in the face of a public disregard so prevalent and long established that one could deduce a custom of its non-observance. ( p. 564 supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed are legislative in nature. The unsettling effect of an assumption of power by the judiciary to declare a statute inoperative for nonuser would be widespread, the price would be too high to pay, particularly in view of the fact that executive abuse of desuetudenal legislation has been minimal, considering the pernicious potentialities. In many states a good portion of the penal law has never been invoked. If the courts adopted a pro-desuetude position, whatever deterrent effect these laws might carry would be jeopardized. There is also a danger that ordinances and statutes protecting minority rights may often be frustrated by apathy or even hostility on the part of some law enforcement officials. Most important, this form of negative law-making is highly unsatisfactory, for it creates perpetual uncertainty as to the rules that govern our conduct. The notice objections cut both ways: If... statutes can only be repealed by other statutes, everyone has notice of the rules of statute law by which he is bound. But, if statutes may be repealed by process of desuetude, no one can say with certainty whether or not desuetude has effectively set in until the matter has been judicially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and because a good many people disobey it, the Act is Therefore obsolescent and no one need pay any attention to it, is very dangerous proposition to hold in any constitutional country. So long as an Act is on the statute book, the way to get rid of it is to repeal or alter it in Parliament, not for subordinate bodies, who are bound to obey the law, to take upon themselves to disobey an Act of Parliament. 56.1 On the theory of desuetude, their Lordships quoted Allen _ Law in the Making, 5th Edn, p 454 :- Age cannot wither an Act of Parliament and at no time, so far as I am aware, has it ever been admitted in our jurisprudence that a statute might become inoperative through obsolescence. ( p.52 ) 56.2 Their Lordships observed :- The learned author mentions that there was at one time a theory which, in the name of `non-observance' came very near to the doctrine of desuetude, that if a statute had been in existence for any considerable period without ever being put into operation, it may be of little or no effect. (p.52) 56.3. Vide para 15. their Lordships have held: A statute can be abrogated only by express or implied repeal. It cannot fall into de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court would be the law of the land and binding on this court. Therein the dispute related to imposition of octroi duty by reference to certain notifications. Material was brought on record to show that certain notifications of 1918 were not implemented till date and in fact, what had been done was to the contrary and that too for a long period. Their Lordships held that the notifications of 1918 had stood repealed quasily. Vide paras 30 to 36 of the judgment their lordships have dealt with 'desuetude'. Having referred to Francis Bennion's Statutory Interpretation and Craies on Statute Law and several other authorities, their Lordships have (vide para 34) so stated the law :- Though in India the doctrine of desuetude does not appear to have been used so far to hold that any statute has stood repealed because of this process, we find no objection in principle to apply this doctrine to our statutes as well. This is for the reason that a citizen should know whether, despite a statute having been in disuse for long duration and instead a contrary practice being in use, he is still required to act as per the dead letter . We would think it would advance the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly, as we have already stated, the sales tax legislation under consideration is of the year 1975 i.e. of a recent origin and not an ancient one. Secondly, except in the case of M/S Amrit Agencies (CWP 530/97), there is no other material brought on record to show non-implementation of the Act to lottery tickets. Even in the case of M/S Amrit Agencies the order as to registration of the petitioner as dealer for lottery tickets suffers from silence merely. It does not expressly record that the Sales Tax Act was not applicable ( in the opinion of the Sales Tax Officer dealing with the petitioner) to lottery tickets. Thus, there is total lack of material before us enabling recording of a finding that what was being done was contrary to the provisions of the statute. Thirdly, the present one is a case where there was a legal quarrel over the juristic concept of the goods_ whether it would include lottery tickets_ and that was settled by the Supreme Court in the case of H. AnrajII. We are definitely and unhesitatingly of the opinion that desuetude shall have no application in such facts and circumstances of the case. (VI) Impact of Contemporanea Expositio ? 62. Simply stated the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of sale of lottery tickets, the principle of contemporanea expositio would not be attracted. The present one is not a case where the question was consciously deliberated upon and the authorities implementing the Act consciously took a decision and then expressed their opinion that a vague expression or ambiguity in Delhi Sales Tax Act was to be so interpreted as to exclude the sale of lottery tickets from within its ken. Secondly, the Delhi Sales Tax Act is not an ancient law; it is an enactment comparatively of modern origin. Moreover the authoritative pronouncements of their Lordships in H.Anraj-II is the law of the land and what has been held therein cannot be afforded to be bypassed by applying the principle of contemporanea expositio. As held by their Lordships of the Supreme Court in Suresh Chander Verma v. Chancellor Nagpur University, (1991)ILLJ574SC , the interpretation given by the Court in a judicial pronouncement declares the law as it stood from the very beginning as per its decision and that it was never the law otherwise. A judicial interpretation neither changes the law nor brings a law in existence on the date of pronouncement. We are Therefore clearly of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar ban on all lotteries by the Central Govt such a measure by the Govt of Delhi may not achieve the desired objective. However, imposition of 20% tax on sale of all lottery tickets can serve as a deterrent to this social evil and will curb, if not totally eliminate, lotteries. The Government may also gain some revenue as a result of this measure. It is, Therefore, proposed to impose Sales Tax @ 20% on sale of lottery tickets by amending the Delhi Sales Tax Act, 1975. 69. In the Financial Memorandum attached to the Bill, it was stated : For levy of tax on lotteries no extra financial expenditure would be involved and this can be done without spending any amount with the existing infrastructure available with the Department. 70. While presenting the budget proposals for 1994-95, the Hon'ble Finance Minister of the Govt of NCT of Delhi had stated on the floor of the House : Our Government is painfully conscious of the increase in prices caused by the policies of the Government of India. I, therefore , do not propose any new levy or increase in the rates of Sales Tax. However, to offset any loss in revenue due to concessions given, I am making an exceptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of living and drive him into a chronic stage of indebtedness and eventually disrupt the peace. 74. As has already been noticed in the earlier part of the judgment, the above said prohibitory order was challenged in the High Court of Delhi and was struck down as it could not withstand the test of judicial scrutiny wherein it was found to be ultra virus the authority of the police commissioner to issue such prohibitory orders. 75. It was contended that what could not be done directly was sought to be achieved indirectly. The legislature could not have banned the sale of lottery tickets of other States in Delhi and Therefore, the legislature resorted to levying of sales tax at a high rate of 20% so as to render the trade in lottery tickets non-lucrative and Therefore, let it die its own death suffering from asphyxia. It was also submitted that the impugned notice under Section 23(6) of the Delhi Sales Tax Act calling upon the dealers to explain why proceedings be not taken for failure to file the return and secure registration for the period which had already elapsed amounted to malafide exercise of statutory power by the executive inasmuch as the intendment was to teach a les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic health and public morality because of the liquor trade being instinct with injury to individual and community. In S. Kodar Vs. State of Kerala, [1975]1SCR121 the Constitution Bench has approved the object of taxation being not only to raise revenue but also to regulate the economic life of the Society. 78. So far as, challenge to the notice under Section 23(6) of the DST Act on the ground of malafides is concerned it should also fail. The Constitutional authority of the impugned amendment having been upheld, the notice cannot be said to be vitiated by malafides in law inasmuch as the authority issuing the notice is merely exercising a power statutorily vested in it. There is no allegation of malice in fact in the sense of the authority issuing the notice being motivated by any malice or any ill-will towards the persons noticed. Whatever pleas that are available to the persons noticed are available still to be raised before the authority concerned. There is no reason to assume as to why such pleas would not be heard and disposed of as per law. (VIII) If the tax @ 20% is arbitrary and discriminatory ? 79. The challenge on the ground of unreasonability of the impugned enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his contention has again to be rejected for several reasons. 81.1 Firstly, a judgment of High Court is merely an exposition of law; it declares what law is and such exposition takes effect w.e.f. the date of legislation itself. In the garb of explaining the law, the High Court cannot usurp the function of legislature by saying that such act would apply only w.e.f. a particular date. However, such power does vest in the Supreme Court by virtue of Article 142, which supplements the existing law and confers vastly broad based power on the Supreme Court- undefined and uncatalogued- to meet myriad situations and do complete justice [See-Supreme Court Bar Association Vs. Union of India, [1998]2SCR795 Chanderkant Patil Vs. State 1998CriLJ1613 DDA Vs. Skipper Construction Co (P) Ltd AIR1996SC2005 ] If the ends of justice so demand the Supreme Court may say that the law declared by it shall apply only prospectively or with effect from a particular date. Obviously such a jurisdiction does not vest in the High Court. Wherever their Lordships have felt inclined to direct that the law declared by the Supreme Court shall apply prospectively or from a particular date, their Lordships have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porting the plea that the lottery tickets are not goods. vii) The Delhi Sales Tax ( 2nd Amendment) Act, 1994 and the notices under section 23(6) of DST Act issued pursuant thereto are neither vitiated by malafides nor are void. viii) The impugned levy of tax @ 20% on sale of lottery tickets is neither arbitrary nor discriminatory. ix) The present judgment cannot be made to operate prospectively merely ( i.e. made effective from the date of its pronouncement. 83. In view of the above said findings all the petitions excepting CWP 1254/97 and 2106/97 are held liable to be dismissed in their entirety. As to the above said two petitions we would like to deal with them separately so as to highlight their peculiar facts and construct the marginal relief to which alone they are found entitled in our opinion. 84. In CWP 1254/97 ( Haryana State Lottery Vs. Govt of NCT of Delhi and Ors) though an interim order of stay was passed on 21.3.97, an order of assessment ( Annexure-P10) was passed that very day. For the period of assessment 1990-91, the sale of the petitioners has been taken at ₹ 850 crores as per best judgment assessment resulting into tax liability of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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