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TMI Blog2020 (12) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court in H. Anraj and Ors. Vs. State of Maharashtra, [ 1984 (1) TMI 336 - SUPREME COURT ] where the writ petitioner, who were agents for the sale of tickets for the lottery filed a writ petition questioning the ban imposed on the sale of lottery tickets within the State of Maharashtra. Even judgment of this Court in H. Anraj Vs. Government of Tamil Nadu, [ 1985 (10) TMI 258 - SUPREME COURT ] was also a writ petition, which was heard alongwith a civil appeal questioning the leviability of the sales tax by the State Legislature on the sale of lottery tickets - thus, the grounds, which have been raised in the writ petition, the writ petition cannot be said to be not maintainable under Article 32 and the preliminary objection made by the learned ASG that the writ petition cannot be entertained under Article 32 and is overruled. Whether the inclusion of actionable claim in the definition of goods as given in Section 2(52) of Central Goods and Services Tax Act, 2017 is contrary to the legal meaning of goods and unconstitutional? - Whether the Constitution Bench judgment of this Court in Sunrise Associates (supra) in paragraphs 33, 40, 43 and 48 of the judgment has laid down as the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of GST, prize money is to be excluded for purposes of levy of GST? - HELD THAT:- The value of taxable supply is a matter of statutory regulation and when the value is to be transaction value which is to be determined as per Section 15 it is not permissible to compute the value of taxable supply by excluding prize which has been contemplated in the statutory scheme. When prize paid by the distributor/agent is not contemplated to be excluded from the value of taxable supply, we are not persuaded to accept the submission of the petitioner that prize money should be excluded for computing the taxable value of supply the prize money should be excluded. We, thus, conclude that while determining the taxable value of supply the prize money is not to be excluded for the purpose of levy of GST - the petitioner is not entitled to reliefs as claimed in the writ petition. The petitioner has prayed for grant of liberty of challenging the notifications dated 21.02.2020/02.03.2020 by which rate of GST for lottery run by the State and lottery organized by the State have been made the same, which notification has not been challenged in the writ petition since the notifications were issued during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, levying tax on the sale of lottery tickets. Reference is made to Bengal Finance Sales Tax Act, 1941 and Madras General Sales Tax Act, 1939. Another Statute to be noticed is Bombay Lotteries (Control and Tax) and Prize Competitions (Tax) Act, 1958. 2.2 There has been a series of litigation regarding taxability of lottery tickets and this Court had occasion to deliver several judgments on the subject which we shall notice hereinafter. Service tax was levied on lottery tickets by Finance Act, 1994. A Circular dated 14/21.2.2017 was also issued providing for mode of determination of the amount of service tax. Rules were also framed namely Lotteries (Regulation) Rules, 2010 by the Central Government containing a set of rules for regulation of the lotteries organized by the States. 2.3 By Constitution (One Hundred and First Amendment) Act, 2016, Article 246A was inserted in the Constitution containing special provisions with respect to Goods and Services Tax. Article 269A and Article 279A were also inserted by same constitutional amendment. Article 279A provided for constitution of Goods and Services Tax Council. The Parliament enacted the Central Goods and Services Tax Act, 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGST, SGST and IGST Act. b) In the Alternative, byappropriate writ, order or direction quash and set aside the impugned Notifications 01/2017 Central Tax (Rate), 01/2017 Integrated Tax (Rate) 01/2017 and the State rate Notification of the Respondent State of Punjab to the extent it levies tax on the face value of the lottery ticket without abating the prize money Component of the lottery ticket when the said amount never forms part of the income of the Petitioner or the lottery trade. c) In the Alternative, byappropriate writ, order or direction quash and set aside the Impugned Notifications 01/2017 Central Tax (Rate), 01/2017 Integrated Tax (Rate) 01/2017 and the State rate Notification of the Respondent State of Punjab to the extent it levies two different rates on tax on the face value of the lottery ticket and declare that the Respondents can levy an uniform rate of 12% Tax on Lottery irrespective of place where it is being sold, and after adjusting the prize money component from the face value of lottery tickets." 3. We have heard Shri Ravindra Shrivastava, learned senior counsel for the petitioner and Shri Vikramjit Banerjee, learned Additional Solicitor General for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the meaning ascribed to it by the Constitution of India as held by Gannon Dunkerley (supra). The words defined in the Constitution of India will have to be ascribed their legal meaning and not the popular meaning. 5. Shri Shrivastava further submits that the Parliament does not enjoy an absolute power to make an inclusive definition of something to be taxed which is not taxable otherwise. There is no absolute power with the legislature to define something. If such definition has no rationale, such artificial definition cannot be treated only for the purpose of assuming taxation power. Shri Shrivastava further submits that taxing actionable claim only is discriminatory since all actionable claims are not being taxed. Shri Shrivastava submits that according to Schedule III to the Act, 2017 under Item No.6 actionable claims other than lottery, betting and gambling have been treated neither as supply of goods nor supply of services. There is a clear hostile discrimination in taxing only lottery, betting and gambling whereas all other actionable claims have been left out of the taxing net. Shri Shrivastava has further submitted that the observations made in the judgment of Constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with the legislative and taxing policy. It is well settled that courts would not review the wisdom or advisability or expediency of a tax. The levy on face value is authorised by section 15(1) read with section 15(5) of the Act, 2017 and Rule 31(A) of the Central Goods and Services Tax Rules, 2017. The levy of 28% tax on face value is neither discriminatory nor beyond the taxing policy/powers of the State. 7. Shri Banerjee further submits that during pendency of the writ petition, Rule 31A has been amended vide notification dated 02.03.2020 merging earlier two separate rates, i.e., regarding value of supply of lottery run by the State Government, which was earlier 100/112 and value of supply of lottery authorised by the State Government, which was 100/128 has been made uniform and by virtue of Rule 31A subrule(2), value of supply of lottery is one and the same, i.e., 100/128 of the face value of the ticket or prize as notified by the organising State, whichever is higher. He submits that in view of the above amendment dated 02.03.2020, which is not challenged in the present writ petition, the argument on the ground of discrimination in the rate of tax is no longer available to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of tax net. 9. Shri Ravindra Shrivastava in his rejoinder submits that he is not claiming any violation of right under Article 19(1)(g) or Article 301. He submits that writ petition is fully maintainable under Article 32 of the Constitution. A Parliamentary enactment on ground of violation of Article 14 is sought to be challenged in the writ petition, which writ petition is fully maintainable. Shri Shrivastava questions the legislative competence of Parliament to tax lottery as goods. Shri Shrivastava submits that he has placed reliance on the principle, which has been laid down by this Court in Gannon Dunkerley (supra). This court in Gannon Dunkerley (supra) laid down that definition of goods has to be taken as it is meant under the Sale of Goods Act, 1930, which definition is also to be taken for the purposes of Article 366(12) of the Constitution. Goods has to be interpreted in its legal sense. Goods cannot be defined in an artificial manner as has been done by the Parliament in Section 2(52). Shri Shrivastava submits that inclusive definition cannot be expansive and unrealistic. He submits that there is no similarity in goods and actionable claims. There cannot be artificia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re only an obiter dicta and not declaration of law? (IV) Whether exclusion of lottery, betting and gambling from Item No.6 Schedule III of Central Goods and Services Tax Act, 2017 is hostile discrimination and violative of Article 14 of the Constitution of India? (V) Whether while determining the face value of the lottery tickets for levy of GST, prize money is to be excluded for purposes of levy of GST? Question No. I 13. Learned Additional Solicitor General submits that petitioner, who is an authorised agent on behalf of the State of Punjab for the lotteries organised by the State of Punjab cannot complain violation of Article 19(1)(g) of the Constitution and lottery being a res extra commercium, the writ petition cannot be entertained. He submits that right to practice any profession or to carry on any occupation, trade or business does not extend to practicing a profession or carrying on an occupation, trade or business which is inherently vicious and pernicious. Shri Ravindra Shrivastava, learned senior counsel appearing for the petitioner submits that he is not claiming any violation of right under Article 19(1)(g) in the writ petition. In view of this submission of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he considered opinion that on the grounds, which have been raised in the writ petition, the writ petition cannot be said to be not maintainable under Article 32 and the preliminary objection made by the learned ASG that the writ petition cannot be entertained under Article 32 and is overruled. Question Nos. II and III 18. Both the above questions being interrelated are taken together. The question to be considered is as to what is the legal meaning of goods and whether actionable claim can also be a part of goods. We need to first notice as to what is the concept of goods. 19. The Sale of Goods Act, 1930 defines goods in Section 2(7) in following words: Section 2. Definitions. In this Act, unless there is anything repugnant in the subject or context,- ..... (7)"goods" means every kind of movable property other than actionable claims and money; and includes stock 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;" 20. Section 311(2) of the Government of India Act, 1935 which has been referred by this Court as Constitution Act defines the goods as including all mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck on the inclusion of actionable claim in the definition of goods under Section 2(52) as raised by the learned counsel for the petitioner. The first ground of attack of the learned counsel for the petitioner is that expression goods is well known concept and is also defined in the Constitution of India. The definition of goods as meant and understood in the Constitution of India has to be adopted and not departed by the Legislature. 25. Shri Srivastava in his usual persuasive style submits that goods as defined in the Sale of Goods Act, 1930 is the concept which has been held to be applicable with respect to goods as understood in the Constitution of India also. The Act, 2017 could not have taken any contrary definition and the contrary definition taken in Section 2(52) of Act, 2017 is unconstitutional and liable to be struck down. Sheet anchor of the arguments of Shri Srivastava is the Constitution Bench Judgment in The State of Madras vs. Gannon Dunkerley & Co.(Madras) Ltd., 1959 SCR 379. In the above case this Court had occasion to consider Entry 48 in List II in Schedule VII of the Government of India Act, 1935 that is "Taxes on the sale of goods". The Madras General Sales Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connotation in that sense is, must now be ascertained...." 27. This Court at page 404 held: "...We think that the true legislative intent is that the expression "sale of goods" in Entry 48 should bear the precise and definite meaning it has in law, and that that meaning should not be left to fluctuate with the definition of "sale" in laws relating to sale of goods which might be in force for the time being. ..." 28. Interpreting the expression of "sale of goods" at page 413 this Court held: "...If the words "sale of goods" have to be interpreted in their legal sense, that sense can only be what it has in the interpretation that words of legal import occurring in a statute should be construed in their legal sense is that those words have, in law, acquired a definite and precise sense, and that, accordingly, the legislature must be taken to have intended that they should be understood in that sense. In interpreting an expression used in a legal sense, therefore, we have only to ascertain the precise connotation which it possesses in law. ..." 29. Summing up its conclusion this Court at page 425 held: "To sum up, the expression "sale of goods" in Entry 48 is a nomen juris, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment of India Act, 1935. We may notice that in the above judgment this Court had occasion to deal with the definition of term "sale" and explaining the legal meaning as existed at the time of enactment of Government of India Act, 1935, the above law was laid down. 32. We may further notice that by the Constitution (Fortysixth Amendment) Act, 1982 sub-Article (29A) has been inserted in the Article 366 of the Constitution. Defining tax on sale or purchase of goods which is inclusive definition. the above Constitution Amendment was made with the intent to tax on the sale or purchase of goods on the transfer, otherwise than in pursuance of a contract, of property. Definition of sale as interpreted by this Court in Gannon Dunkerley & Co.(Madras) Ltd. case (supra) is no longer applicable any more and work contracts were also taxed. We may also notice subsequent Constitution Bench judgment in the case of M/s Gannon Dunkerley and Co. and Others Vs. State of Rajasthan and others, 1993 (1) SCC 364, where this Court had occasion to examine Article 366(29A) subclause (b) of the Constitution. This Court referring to its earlier judgment in Builders' Association of India vs. Union of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x leviable by virtue of Sub-clause (b) of clause (29-A) of Article . 366 of the Constitution is subject to the discipline to which any levy under Entry 54 of the State List is made subject to under the Constitution." 33. Definition of goods as occurring in Section 311(12) of Government of India Act, 1935 although was noticed by this Court in Gannon Dunkerley and Co.(supra) but definition of goods was not further elaborated. Definition of goods as occurring in Article 366(12) is inclusive definition and does not specifically excludes actionable claim from its definition. Whenever inclusive definition is given of an expression it always intended to enlarge the meaning of words or phrases, used in the definition. In this context, it is relevant to refer to the judgment of this Court in Reserve Bank of India vs. Peerless General Finance and Investment co.Ltd. And others,1987(1) SCC 424 with regard to the inclusive definition. Following was observed in paragraphs 32-33: "32....All that is necessary for us to say is this: Legislatures resort to inclusive definitions (1) to enlarge the meaning of words or phrases so as to take in the ordinary, popular and natural sense of the words and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of interState trade or commerce. Explanation.-The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council." 37. When the Parliament has been conferred power to make law with respect to goods and services, the legislative power of the Parliament is plenary. The observations of this Court in The State of Madras v. Gannon Dunkerley & Co.,(supra) at page 426 are clear pointer that although the State Legislature had no legislative competence to enact impugned legislation but Parliament on the strength of residual power could have legislated. We are the view that the judgment of this Court in The State of Madras v. Gannon Dunkerley & Co.,(supra) does not lend support to the submission of the learned counsel for the petitioner that Parliament could not have defined the goods in Act, 2017, expanding the definition of goods as existing in Sale of Goods Act, 1930. 38. Now, we come to the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which it has in the Indian Sale of Goods Act, 1930(vide Ganon Dunkerley's case) MANU/SC/0152/1958 : [1959] 1 SCR 379 "goods under Section 2(7) thereof comprises within its scope every kind of movable property but specifically excludes actionable claim, that the essence of lottery is a chance for a prize, that a sale of such a chance is not a sale of goods and therefore the levy of sales tax on sale of lottery tickets would be beyond the ambit of Entry 54 of List II. Alternatively, counsel contended that a lottery ticket is an actionable claim as defined in Section 3 of Transfer of Property Act or a chose-in-action known to English law, the ticket itself being merely a slip of paper or memorandum evidencing the right of the holder thereof to claim or receive a prize if successful in the draw and therefore the impugned levy is outside Entry 54 of List II. …" 40. This Court in the above judgment noted the definitions of goods as occurring in Sale of Goods Act, 1930, sale of goods in Tamil Nadu General Sales Act, 1959, and definition of goods in Article 366 (12). After considering, this Court in H Anraj came to the conclusion that lottery to the extent that they comprise t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right to claim the prize, it was not goods but an actionable claim and therefore not 'goods' under the Sales Tax Laws. A transfer of it was consequently not a sale. The lottery ticket per se had no innate value. The interpretation by the Delhi High Court of the ratio in H. Anraj was in our opinion erroneous." 42. The pertinent observation has been made by the Constitution Bench in paragraph 36 wherein it noticed that in States sales tax laws actionable claims have been uniformly excluded from the definition of goods. This Court held "were actionable claims, etc. not otherwise includible in the definition of "goods" there was no need for excluding them". Following has been laid down in paragraph 36: "36. We have noted earlier that all the statutory definitions of the word 'goods' in the State Sales Tax Laws have uniformly excluded, inter alia, actionable claims from the definition for the purposes of the Act. Were actionable claims etc., not otherwise includible in the definition of 'goods' there was no need for excluding them. In other words, actionable claims are 'goods' but not for the purposes of the Sales Tax Acts and but for this statutory e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt concluded in paragraph 51 that in H Anraj it was incorrectly held that a sale of a lottery ticket involved a sale of goods. Paragraph 51 is as follows: "51 We are therefore of the view that the decision in H. Anraj incorrectly held that a sale of a lottery ticket involved a sale of goods. There was no sale of goods within the meaning of Sales Tax Acts of the different States but at the highest a transfer of an actionable claim. The decision to the extent that it held otherwise is accordingly overruled though prospectively with effect from the date of this judgment." 46. One of the submissions which has been pressed by Shri Srivastava is that the observations made by the Constitution Bench in the above paragraphs that lottery is an actionable claim is based on an obiter dicta since the question was not up for consideration. He submits that Court was to consider as to whether lottery tickets are goods or not within the meaning of Section 2(j) of Tamil Nadu General Sales Act, 1959 as amended. The definition of goods in Section 2(j) as noticed by the Constitution Bench in paragraph 9 states that 'goods' means all kinds of movable property (other than newspaper, actionable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ict with definition given in Article 366(12). As noted above the Parliament by the Constitution(One Hundred and First Amendment) Act, 2016 inserted Article 246A. a special provision with respect to goods and services tax. The Parliament was fully empowered to make laws with respect to goods and services tax. Article 246A begins with non obstante clause that is "Notwithstanding anything contained in Articles 246 and 254", Which confers very wide power to make laws. The power to make laws as conferred by Article 246A fully empowers the Parliament to make laws with respect to goods and services tax and expansive definition of goods given in Section 2(52) cannot be said to be not in accord with the constitutional provisions. 50. Shri Shrivastava with his usual ability and skill submits that Parliament does not enjoy an absolute power to make an inclusive definition of something to be taxed, which is not taxable otherwise. The power of legislature to lay definition has limitations and cannot include something which cannot in rational sense be included. While goods and actionable claims are both different concepts, lottery has no resemblance with either. The legislature can only provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by owner himself was treated to be sale was held ultra vires to the legislative competence of the State. The present is a case where we are not dealing with concept of sale and further in the case before us, it is the Parliament, which has enacted the Act, 2017 which has competence to make a law imposing tax on goods and services. 53. We may notice another Constitution Bench Judgment of this Court in Navinchandra Mafatlal Bombay Vs. Commissioner of Income Tax, Bombay City, AIR 1955 SC 58. In the above case, challenge was made to Section 12-B of the Indian Income Tax Act, 1922. It was contended that Section 12-B, which authorise the levy of tax on capital gains was ultra vires to the central legislature. The Constitution Bench laid down following in paragraph 5:- "5. ………………………….If we hold, as we are asked to do, that the meaning of the word "income" has become rigidly crystallized by reason of the judicial interpretation of that word appearing in the Income Tax Act then logically no enlargement of the scope of the Income Tax Act, by amendment or otherwise, will be permissible in future. A conclusion so extravag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, it has created a fiction by which the amount ostensibly and nominally advanced to a shareholder as a loan is treated in reality for tax purposes as the payment of dividend to him. We have already explained how a small number of shareholders controlling a private company adopt this device. Having regard to the fact that the legislature was aware of such devices, would it not be competent to the legislature to devise a fiction for treating the ostensible loan as the receipt of dividend? In our opinion, it would be difficult to hold that in making the fiction, the legislature has travelled beyond the legislative field assigned to it by Entry 82 in List I." 57. In view of what has been laid down by the Constitution Bench, as above, there has to be a rational connection between the item taxed but it is well settled that with regard to taxing policy of the legislature, the Courts have very limited role to play. It is useful to refer the observations of this Court in Sri Krishna Das Vs. Town Area Committee, Chirgaon, (1990) 3 SCC 645 wherein paragraph 31, following was observed:- "31. The contention that the tax is discriminatory in view of the exemptions granted to some of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable claim as proposition of law. The observation cannot be said to be obiter dicta. Question No. IV 63. As noted above, another limb of attack mounted by Shri Shrivastava is on the ground of hostile discrimination while taxing lottery, betting and gambling and excluding other actionable claims. Reference is made to Item No.6 of Schedule III of Act, 2017. Schedule III begins with heading "activities or transactions which shall be treated neither as supply of goods nor supply of services. Item No.6 of Schedule III is as follows:- "Item No.6 - Actionable claims other than lottery, betting and gambling." 64. Submission is that assuming the lotteries to be actionable claims, the Act, 2017 suffers from a hostile discrimination in first including actionable claims within the category of goods and then excluding all actionable claims from supply of goods and creating a further exception of lottery, betting and gambling in Schedule III. Further submission is that there is no intelligible differentia for excluding lotteries, betting and gambling from the other actionable claims, nor does such exclusion have any nexus with the purpose of the Act. In support of the above preposition, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er actionable claims out of the tax net. 68. Even before enforcement of the Constitution of India, there were several legislations by different States regulating lottery, betting and gambling. Before a Constitution bench of this court in State of Bombay Vs. R.M.D. Chamarbaugwala and Anr., AIR 1957 SC 699, this Court had occasion to consider the nature of activities akin to lottery, betting and gambling. Bombay Lotteries and prize Competition Control and Tax Act, 1948 was enacted to regulate the tax, lotteries and prize competition. The petitioner, who was conducting and running the prize competition from State of Mysore where entries were received from various parts of India including the State of Bombay had challenged the Act, 1948 and the Rules namely Bombay Lotteries and Prize Competitions Control and Tax Rules, 1952. The writ petition was allowed by the High Court, against which State of Bombay had filed an appeal. The Constitution Bench held the activity of respondent as activity of gambling nature. This Court laid down following in paragraphs 41 and 46:- "41. It will be abundantly clear from the foregoing observations that the activities which have been condemned in this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarded as trade or commerce and as such the petitioners cannot claim any fundamental right under Article 19(1)(g) in respect of such competitions, nor are they entitled to the protection of Article 301. The result, therefore, is that this appeal must be allowed and the orders of the lower courts set aside and the petitions dismissed and we do so with costs throughout. The state will get only one set of costs of hearing of this and Appeals Nos. 135, 136, & 187 of 1956 throughout." 69. In a later decision, Union of India and Ors. Vs. Martin Lottery Agencies Limited, (2009) 12 SCC 209, this Court had occasion to consider levy of service tax on the lottery tickets. This Court had held that law as it stands today recognises lottery to be gambling, which is res extra commercium. In paragraph 17, following has been laid down:- "17. We fail to persuade ourselves to agree with the aforementioned submission. The law, as it stands today (although it is possible that this Court in future may take a different view), recognises lottery to be gambling. Gambling is res extra commercium as has been held by this Court in State of Bombay v. R.M.D. Chamarbaugwala [AIR 1957 SC 699] and B.R. Enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax the value of service tax was taken into account as the total face value of the ticket sold minus the total cost of the ticket and the prize money paid by the distributor. Further, service tax was levied at a miniscule rate of 0.82% and 1.2% as compared to the exorbitant rate of 28% which is being charged now. The question to be answered is that while determining the face value of the ticket for levy of tax the price money of the ticket is to be excluded. The reliance has also been placed on the circular dated 14.02.2007 which provided that the value of taxable service shall be taken into account at the total face value of the ticket sold minus (a) the total cost of the ticket paid by the distributor to the State Government and (b) price money paid by the distributer. Further, reliance has been placed on the Constitution Bench judgment of this Court in M/s. Gannon Dunkerley and co. and others vs. State of Rajasthan and others, 1993(1) SCC 364, where the Constitution Bench laid down that the value of the goods involved in execution of a works contract on which tax is leviable must exclude the charges which appertain to the contract for supply of labour and services. The reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; (d) interest or late fee or penalty for delayed payment of any consideration for any supply; and (e) subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments. Explanation.--For the purposes of this subsection, the amount of subsidy shall be included in the value of supply of the supplier who receives the subsidy. (3) The value of the supply shall not include any discount which is given-- (a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and (b) after the supply has been effected, if - (i) such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and (ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply. (4) Where the value of the supply of goods or services or both cannot be determined under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable service by deducting total cost of ticket paid by the distributor and price money paid by the distributor, that was regime when it was treated as business auxilliary service rendered by distributor. The said circular has no relevance or application after the 2017 enactment. 77. We may also refer to Constitution Bench judgment of Gannon Dankerley and Co.(second) where this Court laid down that value of the goods involved in the execution of the works contract on which tax is leviable must exclude the charges which appertain to the contract for supply of labour and services. As noted above in paragraph 47 this Court noted items which were to be excluded while determining the value of goods involved in the works contract. What was held by this Court in the above case relates to works contract which judgment has no application on the issue which has arisen before us that is abatement of price money while determining the value of the lottery. 78. For determining the value of the lottery, now, there is statutory provision contained in Section 15 read with Rule 31A as noted above. Section 15 of the Act, 2017 by sub-section (2) it is provided what shall be included in the value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein the petitioner submits that prize money of the lottery ticket are not being computing for levy of tax. He has referred to provisions of United Kingdom Value Added Tax, 1994; Excise Tax Act of Canada; Goods and Services Tax Act of Singapore; Goods and Services Act, 1985 of New Zealand and Sri Lanka-Value Added Tax Act, 2002. When the levy of GST, determination of taxable value are governed by the Parliamentary Act in this country, we are of the view that legislative scheme of other countries may not be relevant for determining the issue which has been raised before us. The taxing policy and the taxing statute of various countries are different which are in accordance with taxing regime suitable and applicable in different countries. The issue which has been raised before us has to be answered by looking into the statutory provisions of the Act, 2017 and the Rules framed therein which govern the field. 82. In the foregoing discussion we are of the view that the petitioner is not entitled to reliefs as claimed in the writ petition. 83. We may, however, notice that petitioner has prayed for grant of liberty of challenging the notifications dated 21.02.2020/02.03.2020 by whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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