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TMI Blog2023 (5) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... played with/without stakes tantamount to gambling or betting as contemplated in Entry 6 of Schedule III of the Goods and Services Act, 2017? HELD THAT:- Based on the jurisprudence [ 1958 (4) TMI 42 - SUPREME COURT] , the words gambling , game of chance , game of skill have developed meanings in judicial parlance. Therefore, applying the principle of nomen-juris, the words should be construed in their legal sense, instead of general parlance. While gambling or game of chance have been held to involve chance as a predominant element, on the other hand game of skill has an exercise of skill which can control the chance. The element of chance cannot be completely overruled in any case but what is to be seen is the predominant element. In a game of rummy, certain amount of skill is required because the fall of the cards has to be memorised and the building up of rummy requires considerable skill in holding and discarding cards. Therefore, a game of rummy is a game of skill as held in Satyanarayana [ 1967 (11) TMI 109 - Supreme Court ]. It is concluded as under: There is a distinct difference between games of skill and games of chance; games such as rummy, etc. as was discussed in sever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h stakes or without stakes is not gambling; Other Online/Electronic/Digital games which are also substantially and preponderantly games of skill and not of chance are also not gambling; The expressions, Betting and Gambling having become nomen juris, the same are applicable for the purpose of GST also and consequently, the said words, Betting and Gambling contained in Entry 6 of Schedule III to the CGST Act are not applicable to Online/Electronic/Digital Rummy, whether played with stakes or without stakes as well as to any other Online/Electronic/Digital games which are also substantially and preponderantly games of skill; The subject Online/Electronic/Digital Rummy game and other Online/Electronic/Digital games played on the Petitioners platforms are not taxable as Betting and Gambling as contended by the respondents under the CGST Act and Rules or under the impugned show cause notice issued by the respondents. The impugned Show Cause Notice dated 23.09.2022 issued by the respondents to the petitioners is illegal, arbitrary and without jurisdiction or authority of law and deserves to be quashed - Petition allowed. - HON'BLE MR. JUSTICE S.R. KRISHNA KUMAR For the Petitioners: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L under Section 83 of the CGST Act, to which, objections were filed by GTPL, pursuant to which, respondents passed an Attachment Confirmation order dated 30.11.2021. 3. W.P. No. 22010/2021 is preferred by GTPL challenging the aforesaid attachment orders and on 03.12.2021, this Court passed an interim order permitting the petitioner to operate the Bank accounts for limited purposes mentioned in the said order. 4. Meanwhile, the officials / founders / employees of GTPL were summoned by the respondents for recording of statements and the same continued upto August, 2022. On 02.08.2022, in addition to the interim order passed earlier in W.P.No. 22010/2021, this Court directed that no precipitative action be taken against the petitioner GTPL and the matter was heard finally and reserved for orders on 07.09.2022 by continuing the interim orders / directions. 5. Subsequently, on 08.09.2022, respondents issued Intimation Notice under Section 74(5) of the CGST Act, calling upon GTPL to deposit a sum of Rs. 2,09,89,31,31,501/- along with interest and penalty by 16.09.2022. The said Notice is challenged in W.P. No. 18304/2022, in which, this Court passed an interim order of stay dated 23.09.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes are concerned. The users/players choose the games based on the amount they want to stake to match their skills against other players who want to play for a similar amount. The Petitioner merely hosts the games and the discretion to play a game and the stake for which it is to be played entire lies with the players with no role of the Petitioner, who seeks to demonstrate the same by the following illustration: Assuming that A and B have downloaded the mobile application of the Petitioner and intend to play a game of rummy against each other by using the Petitioner s online platform/mobile application. As per the construct of the game, A and B has to deposit INR 200 each for participation in the game. The winner at the end of the game gets INR 360 as winnings. Further, for allowing A and B to use its platform for participating in the game of rummy hosted by the Petitioner, it would charge INR 20 each from A and B . Therefore while A and B deposit INR 200 each, the winner gets INR 360 and INR 40 is retained by the Petitioner as its platform fee . During the course of the game, INR 360 is held by the Petitioner in a designated account and on this amount, the Petitioner has no lien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same has to be disbursed to the winning players once the game is over. The Respondents with a view to mislead this Hon ble Court is trying to portray an inflated figure, which in reality is not even the income of the Petitioner. Further, the absurdity in the allegations made in the impugned SCN can be gauged from the fact that the Respondents have not even mentioned the Terms Conditions of the game plays facilitated by the Petitioner. In the Terms Conditions, it is specifically stated that the monies deposited by the players are held in trust by the Petitioner. This undisputed contractual understanding between the Petitioner and its players completely negates the allegations in the Impugned SCN that the entire buy- in amount is the Petitioner s income. The Impugned SCN has also alleged that the Petitioner by providing discounts / bonuses induce the players to indulge in more game plays. At the outset, it is to be noted that the withdrawal wallet which is created for each player is the property of the player. This is in the sense that the player can choose either to withdraw the winnings and get it transferred to his bank account or he can choose to use the same for further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, violates the Petitioners fundamental rights guaranteed under Articles 14 and 19(1)(g) of the Constitution of India. The Impugned SCN is actuated by malice, since it comes in the backdrop of pendency of W.P.22010 / 2021 and W.P.18304 / 2022, wherein interim orders have been granted. The Impugned SCN is a colourable exercise of power and gross attempt the overreach the orders of this Hon ble Court. The allegations raised against the Petitioner in the earlier proceedings by the Respondents changed all of a sudden in the present proceedings. Initially the thrust of the allegation was that the Petitioner evaded GST by claiming ineligible discounts from its platform fee . This was the narrative for most part of the investigation when suddenly the same changed and it was alleged that the Petitioner was involved in betting . The very fact that the Respondents have kept on changing their narrative shows the utter arbitrariness and malice on their part. It is fairly evident that the prime objective of the Respondents is to harass and intimidate the Petitioner and its employees. Further, as per the Impugned SCN, the Respondents supposedly had the intelligence from the beginning that the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hirlpool Corporation vs. Registrar General (1998) 8 SCC 1; (9) Linde Engineering Pvt. Ltd., vs. Union of India (2022) 57 GSTL 358 (GUJ); (10) Calcutta Discount Co., Ltd., vs. Income Tax Officer (1961) 2 SCR 241; (11) Magadh Sugar and Energy Ltd., vs. State of Bihar (2021) SCC Online (SC) 801; (12) Director General of Foreign Exports vs. Kanak Exports (2016) 2 SCC 226; (13) Collector of Central Excise vs. ONGC (1999) 1 SCC 257; (14) Narendra Udeshi vs. Union of India (2002) SCC Online Bom 962; (15) Siemens Ltd., vs. State of Maharastra (2006) 12 SCC 33; (16) ORYX Fisheries vs. Union of India (2011) 266 ELT 422; (17) Spirotech Heat Exchangers vs. Union of India (2016) 341 ELT 110 (Del); (18) Topland Engines Pvt. Ltd., vs. Union of India (2006) 199 ELT 209 (Guj); (19) East India Commercial Co., Ltd., vs. Collector of Customs (1983) 13 ELT 1342 (SC); (20) NKAS Services Pvt. Ltd., vs. State of Jharkhand (2022) 58 GSTL 257; (21) Gurdeep Singh Sachar vs. Union of India (2019) 30 GSTL 441 (Bom); (22) Ravindra Singh Choudhary vs. Union of India (2020) 42 GSTL 195 (Raj); (23) State of Karnataka vs. State of Meghalaya 2022 SCC Online SC 350; (24) Varun Gumber vs. Union Territory of Chandigarh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the outcome of such games of rummy. In addition to this, the Petitioner is making profits and gains from such games of rummy played on its platform, which according to the Hon ble Supreme Court in the case of State of Andhra Pradesh v. K. Satyanarayana Ors., AIR 1968 SC 825 would amount to betting and gambling. The contention of the Petitioner that the game of rummy played in its platform is a Game of Skill deserves to be rejected. To the contrary, it is nothing but a pure game of chance. The test according to the Hon ble Supreme Court is threefold to determine, whether a particular game is a Game of Chance or a Game of Skill. Firstly, it has to be identified on the facts and circumstances of each case. Secondly, the underlying facts must disclose that the success in the game preponderantly depends on skill or chance. If it is skill, then it is Game of Skill and if it is chance, then it is a Game of Chance. Thirdly, the skill must be discernible from the superior knowledge, training, attention, experience and adroitness of the player. In the present facts of the case, the only criteria to enter a particular table in the Petitioner s platform is to stake a particular amount. Onc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. When this is the ratio of the Hon ble Supreme Court in Satyanarayana s case supra, any number of judgments holding the contrary is per incuriam. A game of skill played for stakes would still amount to betting and the Hon ble Supreme Court has not specially blessed such games alone to be played with stakes. Any submission contrary to this settled position deserves to be rejected. The judgments of the Punjab and Haryana High Court, Bombay High Court and Rajasthan High Court in the cases of Varun Gumber, Gurdeep Singh and Ravindra Singh s cases supra, pertaining to Dream 11 will have no application, as no factual investigations were made on a case to case basis and the Petitioners therein approached by way of public interest litigations. When the Bombay High Court decided on aspects relating to GST, the Hon ble Supreme Court permitted the Union of India to file a review before the High Court and the same is still pending. The Rajasthan High Court took note of this and left it to the GST authorities to decide the issues. Therefore, the aspects of GST are still wide open and have not attained finality. Out of abundant caution, it is clarified that even the aspects of betting/gamblin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. 2011 SCC Online Mad 1997; (20) Director General of Police, State of Tamilnadu vs. Mahalakshmi Cultural Association - 2012 SCC Online Mad 1130; (21) Mahalakshmi Cultural Association vs. Director General of Police Ors. SLP(C)No.15371/2012 Dated 13.08.2015; (22) Mahalakshmi Cultural Association vs. Director General of Police Ors. SLP(C)No.15371/2012 Dated 18.08.2015; (23) M/s. Krida Sports And Games Pvt. Ltd., vs. Director General of Police Ors. Diary No(s). 7161/2019; (24) Ramachandran K. vs. The Circle Inspector of Police Perinthalmanna WP(C)No.35535 of 2018; (25) Play Games 24 x 7 Private Limited vs. Ramachandran K. and Anr. 2019 SCC Online Ker 23736; (26) Skill Lotto Solutions Pvt. Ltd., vs. Union of India and others 2020 SCC Online SC 990; (27) Gaussian Network Pvt. Ltd., vs. Monica Lakhanpal Anr. C.R.P.119/2012 Dated 21.04.2016; (28) The State vs. Ramprakash P. Puri and Ors. AIR 1964 Guj 223; (29) R.Chitralekha Anr. Vs. State of Mysore Ors. 1964 AIR 1823; (30) Santosh vs. Central Bank of India AIR 2003 MP 218; (31) State of U.P. Ors. Vs. Jeet S. Bisht Anr. (2007) 6 SCC 586; (32) Deb Narayan Shyam and Ors. Vs. State of West Bengal and Ors. AIR 2005 SC 1167; (33) State of M.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ially differentiated from games of chance; For distinguishing between skill and chance, the Courts have applied predominance test, which is the watershed test. Statutes which save games of mere skill mean that the skill element is more than chance - never 100% skill For example - how cards are distributed from a pack. We are concerned with Rummy - Rummy per se in law has always been designated as a game of skill; The age-old distinction between skill and chance is vital and has been maintained in all statutes because States have no competence over skill but only chance. There is a rationale behind this distinction - goes to the root of legislative competence since skill cannot fall under Entry 34 of List II of the Constitution; It makes no difference if game of skill is played physically or virtually the same predominance test applies to ascertain the true character of the game - this artificial distinction between online and offline is merely to create a fear psychosis and to reopen settled legal principles; Why did earlier statutes codify exclusions for games of skill? Statutes are made by application of mind and the prevailing statement of law i.e. games of skill stand protected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t considered as gaming or gambling as held in AIGF, Head Digital, Junglee Games cases supra and the Andhra Pradesh High Court. In the case of G.S. Ananthaswamy Iyer vs. State of Karnataka, 1982 SCC OnLine Kar 104 , this Court dealt with the latter portion of para -12 of K. Satyanarayana s case supra and rejected the arguments (which were similar to the arguments advanced by the learned ASG behalf of the Respondents herein) advanced by the State in the said case. In another case of D.V.R Recreation Club vs. State of Karnataka - 2016 SCC OnLine Kar 8878 , this Court has clearly held that rummy played with stakes is permissible and not an offence. The Judgment of a Court is not to be read as the Euclid s Theorem shorn of the facts and the context in which the law has been declared and accordingly, RMDC 1 2, K. Satyanarayana, M.J.Sivani and K.R. Lakshmanan s cases supra must be construed harmoniously and not in a disharmonious manner. The contention of the Respondents that in RMDC-1, it was held that any game whose result is based on a forecast is a gambling activity is liable to be rejected. At paragraph 17, the tripartite categorisation of competitions by the Apex Court was in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng variety offered to the general public via a Newspaper. Therefore, Category II covers competitions which are akin to competitions that fall under Category I and III offered through the medium of a Newspaper. Category (ii) covers those rare category of games whose success requires the forecast of an event or a result, which cannot be made by ordinary persons (given that it may involve several imponderables). Such a forecast may possibly be made by conducting rigorous forensic or statistical study by persons who have the scientific or the technical or the super specialised knowledge to do so; it is when such games are offered to the general public, the forecast becomes a shot at the hidden target . That there is an element of chance in each game and a game of skill , may not necessarily be such an activity where skill must always prevail; however, it is well settled in law, where in an activity the exercise of skill can control the chance element involved in the particular activity, such that the better skilled would prevail more often than not, such activity qualifies as a game of skill. The game of rummy played with stakes is played between players on the basis of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince to fall within the said definition, an instrument of gaming must be used for profit or gain . However, at paragraph-12 of the said decision, the game of rummy was held to be protected under Section 14 of the Hyderabad Gambling Act, which necessarily implies that the said game is not hit by any of the other provisions of the Act and therefore, any profit or gain derived from playing rummy would not make the organiser a Common gambling-house. If the said judgment is interpreted to mean that no fees can be imposed on players for playing a skill-based game, then effectively even an organiser of a chess competition, who charges an entrance fee on the players to participate in the competition would be guilty of running a common gaming house. In addition, paragraph-10 (as interpreted by the respondents) falls foul with paragraph-5 of RMDC-2 s case, which permits running a business involving games of skill. Respondents are also not entitled to place reliance upon the latter portion of paragraph-12 which cannot be read in isolation. Paragraph-3 makes it abundantly clear that the game being played was rummy for stakes . The opening words of paragraph-12 make it clear that protection of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be construed to mean that playing a game which is preponderantly of skill played with either money or stakes amounts to gambling and must be seen to have been tempered by the clear enunciation of the law qua gaming and gambling in the later Three Judge Bench judgment in the case of K.R.Lakshmanan supra. It is contended that K.R.Lakshmanan s case supra, apart from not favouring the petitioner, actually supported the claim of the respondents. This contention of the respondents is based on apparent misreading and misinterpretation of the ratio laid down in the said judgment and the said contention is liable to be rejected. So also, the ratio laid down by the Division Bench of this Court in All India Gaming Federation s case is sufficient to reject all the claims put forth by the respondents as well their untenable attempt to distinguish the said judgment and contend that the same cannot be relied upon by the petitioner. GST is a tax on supply of goods and services. Alternatively and without prejudice to the points discussed above and irrespective of qualification as betting and gambling , GST liability as alleged in the impugned SCN can be affixed on the Petitioners, only if the Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration of the platform fees (A) only. The contribution towards the prize pool is not a consideration for the platform services and the Operators have no interest over the same. In other words, the Operators do not have any skin in the game . The players contract with each other to make contributions to the prize pool and contract with each other to abide by the rules of the game. In terms of the service terms of the platforms, operators manage the prize pool and implement the rules of the game by distributing the prize pool to the winners of the game on behalf of the players. The prize pool is a fund held by the Operators in trust, for a brief period of time (i.e., from the time of the contribution by the players prior to the commencement of the game till its completion), subsequent to which the prize pool amount is distributed among the winners. The amounts comprising the prize pool are not a consideration for any services provided by the Operators. Since these amounts contributed towards the prize pool are (i) not supplies made by the Operators; and alternatively (ii) consideration for supply of actionable claims, no goods and services tax (GST) is required to be discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e another. The term betting partakes the colour and character of the term gambling , which means that the term betting can only be interpreted to apply to games of chance and games of skill stand excluded from betting. It is not disputed that rummy is a game of skill. The key skills involved in rummy are memorizing the fall of the cards, building up the right sequences by discarding cards and drawing cards from the open pile. The game of rummy requires a player to strategize his/ her moves, exercise experience, adroitness, alertness on the table and skills in permutations and combinations. A player with greater skills is always more likely to win against players with inferior skills, purely based on the skill that the players possess. The dispute only pertains to whether rummy when played for stakes amounts to gambling / betting which question has been held in the negative against the respondents not only in the aforesaid judgments but also by the Andhra Pradesh High Court in the case of Executive Club v. State of Andhra Pradesh -1998 (3) APL) 138 and D. Krishna Kumar v. State of Andhra Pradesh-2002 SCC OnLine AP 810. It is the Respondents submission that playing a game of skill fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entities merely charge a service fee for service provided (on which GST is paid). Accordingly, there is no supply of any goods or actionable claim by the entities involved. As on date, the revenue of the entire industry itself is not INR 21,000 crores. Therefore, to tax just one entity over INR 21,000 crores by way of the Impugned SCN is absurd. The stated stand of the Revenue is also that the allegations made in the Impugned SCN form the basis, on which further demands will be made on the entire industry. It is distressing to note that while on the one hand, the Central and the State Governments are pushing to make the country a gaming hub, on the other hand, the Revenue is seeking to effectively kill the industry. It was submitted that the Impugned SCN is arbitrary and ignores settled law, reiterated time and again by the Hon ble Supreme Court. Betting and gambling under the CGST Act is to be ascribed the same meaning as that under the Constitution of India. Betting and Gambling under Entry 34 List II has attained constitutional significance. Betting and Gambling only relates to games of chance and its scope cannot be extended to include games preponderantly and substantiall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot required for conviction under the respective acts. Admittedly these acts deal with gambling activities. Reference may be also had to Section 176 of the Karnataka Police Act, 1963, which exempts wagering by persons taking part in a game of skill. An amendment to this provision removing this exemption was struck down in All India Gaming Federation s case being manifestly arbitrary. Therefore, to say that placing of stakes on games of skill will make it gambling, does complete violence to the legislative intent that has consistently been in vogue for over 150 years. The argument that games of skill played with stakes amounts to gambling obliterates the distinction between games of skill and games of chance. The Respondents argument that the distinction remains for the purpose of conducting competitions is entirely a figment of their imagination and finds no mention in any jurisprudence on the subject. They cannot be seen to supply such hidden interpretations. As noticed by the Hon ble Division Bench of this Court in All India Gaming Federation s case, a game that involves substantial amount of skill is not gambling. The Hon ble Division Bench has further conclusively held that a ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llects a percentage of the amounts staked as its platform fees / commission for providing its services as an intermediary. Thus, the Respondents cannot be permitted to supply words to these observations and say that placing of stakes on a game of skill amounts to gambling. In any event, from a reading of the whole judgment, it is evident that this last line is not the ratio of the judgment at all. The decision of the Three Judge Bench of the Hon ble Supreme Court in Lakshmanan s case is also entirely in favour of the Petitioner herein. The Hon ble Supreme Court clearly notes that the term gaming can only be interpreted in the light of the law laid down in the RMDC 1 and 2, i.e., competition which substantially depends on skill is not gambling. The Hon ble Supreme Court has held that Gaming is the act or practice of gambling on a game of chance. It is staking on chance where chance is the controlling factor. Thus, accordingly, the Hon ble Supreme Court concludes Even if there is wagering or betting with the Club it is on a game of mere skill and as such it would not be gaming under the two Acts. Hence, the ratio that emerges is that wager or betting on a game of skill does not amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s likely to win against a novice, i.e., the outcome of the game is decided on the basis of the skills of the players involved. Further, the observations made herein will also have to be read in the context of the observations on this point made in RMDC-1, where the Hon ble Supreme Court observes that even in a game of chance, expert statisticians may form some idea of the result of an uncertain future event but it is difficult to treat these as a game of skill. Thus, the only test to ascertain the nature of the game is the preponderance test and not on the basis of the skill level of the player involved. The judgment of this Court in All India Gaming Federation is neither per incuriam nor sub-silentio as contended by the Respondents. Only because a specific paragraph in a precedent has not been excerpted by a Court, does not mean that a precedent has not been considered in its entirety. By that logic, if the entirety of a precedent judgment is not excerpted in a subsequent judgment, the subsequent judgment will become automatically sub silentio and per-incuriam, which is a completely absurd proposition. Thus it cannot be said that the decision of the Hon ble Division Bench of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own and uncertain till the game gets over, whether such activity of wagering, staking or betting on the unknown and uncertain outcome would tantamount to betting and gambling irrespective of the nature of the underlying game, i.e., of skill or of chance. This issue is also no longer res integra as the Hon ble Supreme Court in the very same case of Satyanarayana held at paragraph-12 that giving away prizes based on the forecasting i.e., predicting in anticipation an unknown and uncertain future outcome is nothing but betting and gambling. The Petitioner before this Hon ble Court had admitted both in the Affidavits and during arguments that the game of rummy is played for stakes. A simple illustration would explain the position. The players of online rummy on the Petitioner s platform are forecasting i.e., predicting in anticipation the unknown and uncertain future event of the player winning the game of rummy, and are placing stakes on that unknown and uncertain future event. Assuming a scenario where in table of four players, each of them have staked INR 1,000. Each player stakes INR 1,000 with a hope to win INR 3,600, on the event that the player wins, which event is a future unkn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Lakshmanan s case Paras 35 and 37). The affidavit filed by the learned ASG deals elaborately with the taxation and contentions of the respondents, the salient features of which are set out hereunder: The only question that arises for consideration, is whether the players of online rummy on the platform of the Petitioner are betting and gambling by placing stakes on the outcome of games of rummy. If the answer to this question is in the affirmative and Respondents most humbly submit, it is so, then according to the Hon ble Supreme Court in Skill Lotto Solutions Pvt Ltd v. Union of India - 2020 SCC Online SC 990 , such a transaction would be a supply of actionable claims in the form of betting and gambling. Consequently, the scheme of CGST r/w Rule 31A will govern the transaction to be taxed at 28% on 100% of the bet value. Games can be categorized into three categories: - A game of pure skill An example under this category would be the game of Chess and Cricket. - A game of pure chance An example under this category would be three cards and mankatha where there is no requirement for any skill. - A game of mixed skill and chance. An example under this category would be the game of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o gambling. When the Petitioner does not dispute this example, the Petitioner has virtually conceded the case as the scenario does not change when the underlying game is a game of skill as the outcome still remains uncertain and placing stakes on such an uncertain event would still amount to Betting and Gambling. The example placed before this Hon ble Court during oral arguments is reiterated herein. Dhoni can play the game of cricket, a pure game of skill and the act of playing the game of cricket per se is not illegal and is in fact protected under Article 19(1)(g). The outcome of the game depends purely on the skill sets of Dhoni. According to the Petitioner, in such a scenario, if Dhoni stakes on the outcome of the game, it would not amount to Gambling. Now assuming for a moment that Dhoni places stakes of INR 100 on the outcome of the game of cricket, the outcome still remains to be uncertain and Dhoni with precision cannot predict the outcome as it is impossible. Therefore, placing stakes even on the outcome of a game of skill would continue to be gambling as stakes are placed on an uncertain event with a hope to gain more money. The Petitioner contends that in a game of skil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a player indulges in is to play the game of rummy, a game of predominant skill. This per se, is not illegal and enjoys Constitutional Protection under Article 19(1)(g). The second transaction a player indulges in is to place stakes on the outcome of games of rummy played on the Petitioner s platform which is an uncertain unknown event. The second transaction unequivocally qualifies as an act of betting and gambling. During oral arguments, it was contended by the Petitioner that the Respondents are bifurcating a single transaction and the same must not be permitted. According to the Petitioner, the act of playing the game of skill and placing stakes on it is a single transaction. This argument deserves to be rejected for the sole reason that the game of rummy can be played independent of the stakes and without placing stakes on the outcome. When the element of staking on the outcome of the games of rummy is introduced, it is nothing but an independent transaction which is in the nature of betting and gambling on the outcome of a game which is an uncertain event. It was also contended alternatively, the judgment of this Court in All India Gaming Federation s case in addition to not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carved out the following exceptions in abstinence for exercise of discretionary powers: - Notice is without jurisdiction - Notice is in abuse of process of law - Notice issued after inordinate delay - Notice is illusory in nature - Notice issued with premeditation or prejudgment - Vires of an enactment is challenged - Violation of principles of natural justice - Notice is barred by limitation - Authority is incompetent to issue Notice as per statutes governing it. - Allegation that Notice is malafide - Infringement of Fundamental Rights (2) In the instant case, the material on record makes it clear that it is the specific contention of the petitioners that the respondents did not have jurisdiction or authority of law to issue the impugned SCN in the light of the law laid down by the Apex Court, this Court and other High Courts have held that a games involving skill and games of betting/gambling are significantly different and that the former category of cases cannot be brought to tax similar to the latter category and any attempt to unsettle a settled position would clearly mean that the tax authority has no jurisdiction; in other words, in view of the specific contention of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is inherently vicious and pernicious, and is condemned by all civilised societies. It does not entitle citizens to carry on trade or business in activities which are immoral and criminal and in articles or goods which are obnoxious and injurious to health, safety and welfare of the general public, i.e., res extra commercium, (outside commerce). There cannot be business in crime. Potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commercium being inherently harmful. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited. Article 47 of the Constitution considers intoxicating drinks and drugs as injurious to health and impeding the raising of level of nutrition and the standard of living of the people and improvement of the public health. It, therefore, ordains the State to bring about prohibition of the consumption of intoxicating drinks which obviously include liquor, except for medicinal purposes. Article 47 is one of the directive principles which is fundamental in the gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be said that gambling is recognised and authorized by law, may be through regulations, licences, etc. Thus, imposition of tax on gambling of course has to be legal to impose tax on it. What makes lottery a pernicious is its gambling nature? Can it be said that in the State organized lotteries this element of gambling is excluded? The stringent measures and the conditions imposed under the State lotteries are only to inculcate faith to the participant of such lottery, that it is being conducted fairly with no possibility of fraud, misappropriation or deceit and assure and hopeful recipients of high prizes that all is fair and safe. 4. In the case of Union of India Vs Martin Lottery Agencies Ltd (2008)12 SCC 209, it was held as under: The doctrine of res extra Commercium was invoked in the United States of America where keeping in view the nature of right conferred on its citizens and the concept of imposition of reasonable restrictions thereon being absent, it was held that gambling should be frowned upon being opposed to constitutional jurisprudence. While borrowing the said principle in the Indian context, however, it must be borne in mind that Constitution of India envisages r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intra-State supplies of goods or services or both at the rates prescribed by the Government. It is relevant to note that State GST laws are a replica of the CGST provisions (save for some provisions relating to savings, etc) and the discussion on provisions of CGST Act, 2017 would equally be applicable to the SGST provisions also. 3. Similarly, Section 5 of the IGST Act, 2017 deals with the levy and collection of taxes where the supply is in the course of inter-State supply of goods or services or both. The said provision also provides that integrated tax on goods imported into India will be levied and collected in accordance with the provisions of Section 3 of the Customs Tariff Act, 1975 on the value as determined thereunder at the point when duties of customs are levied on the said goods under Section 12 of the Customs Act, 1962. 4. The provisions relating to levy could be summarized as below : Levy is on Supply of goods and/or services or both, other than on the supply of alcoholic liquor for human consumption Rate To be notified - but shall not exceed 20% each of CGST and SGST Value Value determined in terms of Section 15 of CGST Dual tax of CGST+SGST would apply On intra-Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration. Explanation For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another; (b) import of services for a consideration whether or not in the course or furtherance of business; and (c) the activities specified in Schedule I, made or agreed to be made without a consideration. (d) omitted. (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1): (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the following 3 sub-groups: (a) to include all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. (aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration. Explanation For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another; (b) to include importation of services for a consideration whether or not in the course or furtherance of business. (c) the activities specified in Schedule I, made or agreed to be made without a consideration. 2. It is relevant to note that Section 7 of CGST Act, 2017 has been amended by CGST (Amendment) Act, 2018 with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould satisfy the factors stipulated in Section 7(1)(a) except to the variation specifically stipulated in the respective clauses. (iii) Section 7(1)(b) treats import of service as supply irrespective of whether it is in course or furtherance of business or not. But for that exception, in order to qualify as supply under section 7(1)(b), the rest of the factors stipulated in section 7(1)(a) should be satisfied. (iv) Section 7(1)(c) dispenses with the requirement of presence of consideration in respect of activities stipulated in Schedule I. But for that exception, for the activities stipulated under Schedule I to qualify as supply under Section 7(1)(c), it should be established that it is made or agreed to be made during the course or furtherance of business. (v) Finally, the purpose of Section 7(1)(d) is to only classify an activity as supply of goods and supply of services. The other factors to qualify as supply stipulated in section 7(1)(a); for Eg : there should be consideration, it should be in course or furtherance of business should be satisfied even by the activities falling under section 7(1)(d). This view is now reiterated by the insertion of sub-section (1A) to Section 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Code apply. Advanced Law Lexicon by P Ramanatha Aiyar s Wagering Contract- A wagering contract is one by which two persons, professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependant on the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the parties having any other interest in that contract than the sum or stake he will win or lose, there is no other consideration for making of such contract by either of the parties. If either of the parties may win but cannot lose or may lose but cannot win, it is not a wagering contract [ Carlill vs Carbolic Smoke Ball co. [1892 (2) QB 484 ] An agreement for payment of prize money on a lottery ticket comes within the ambit of the expression wagering contract as contemplated under Section 30 of the Act. [ Subhash Kumar Manwani vs State of MP, AIR 2000 MP 109, 110 ] Black s Law Dictionary Wager A contract by which two or more parties agree that a certain sum of money or other thing shall be paid or delivered to one of them or that they shall gain or lose on the happening of an uncertain event ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hazard of loss by chance. Definition of business under GST to include betting, gambling, lottery; The principle of res extra commercium applies to betting, gambling, wagering for the purpose of other laws. However, with respect to GST law, the definition of business is much wider to include wager or any other similar activity . Therefore, for the purpose of GST, business also includes, betting, gambling, lottery, etc. Given the wide scope of the definition of business under CGST Act, 2017, for the limited purpose of GST, a view is possible that protection under Article 19(1)(g) of the Constitution of India is available to wagering, betting, gambling, lottery, etc. But that in itself, therefore, would not mean that lottery, betting and gambling are the same as other games of skill, which distinction can still be made to justify lower tax rates for the latter, if any and that is precisely what would be decided in this petition. Actionable claim under Schedule III of CGST Act The said Schedule III referred in Section 7(2) of the Act reads as under: SCHEDULE III [See Section 7] Activities or transactions which shall be treated neither as a supply of goods nor a supply of services 1 .. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f skill. Law expositing game of skill vs game of chance It must be noted that there is no denying the fact that game of skill and game of chance indeed have been differentiated by the highest Courts of this country and that is more so in the context of whether protection under Article 19(1)(g) can be taken. The decisions have clearly held that such protection is not available for lottery, betting and gambling which does not amount to a business. However, we have already seen how the definition of business would include wagering and other similar activities and that lottery, betting and gambling which are actionable claims is defined as goods under the legislation. However, since Schedule III clearly mentions and excepts lottery, betting and gambling from the generic term of actionable claims to ensure that it could be taxed, necessarily the interpretation of games of skill is fundamental to understand whether they fit into the realm of actionable claim on one side or whether they would fit into the realm of the sub sect of actionable claim, that is, lottery, betting and gambling so that they could be subjected to tax in the latter category. If they are in the former category, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition clause and would result in unpalatable consequences. A reasonable and just interpretation of existence requires understanding the context, the purpose and the relevant legal norms applicable for a binding and enforceable arbitration agreement. An agreement evidenced in writing has no meaning unless the parties can be compelled to adhere and abide by the terms. A party cannot sue and claim rights based on an unenforceable document. Thus, there are good reasons to hold that an arbitration agreement exists only when it is valid and legal. A void and unenforceable understanding is no agreement to do anything. Existence of an arbitration agreement means an arbitration agreement that meets and satisfies the statutory requirements of both the Arbitration Act and the Contract Act and when it is enforceable in law. 147. xxx xxx xxx 147.1. In Garware Wall Ropes Ltd. v. Coastal Marine Constructions Engg. Ltd., (2019) 9 SCC 209 , this Court had examined the question of stamp duty in an underlying contract with an arbitration clause and in the context had drawn a distinction between the first and second part of Section 7(2) of the Arbitration Act, albeit the observations made and quoted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be treated as the ratio decidendi of the case, the proposition is to be inversed, i.e. to remove from the text of the judgment as if it did not exist. If the conclusion of the case would still have been the same even without examining the proposition, then it cannot be regarded as the ratio decidendi of the case. In Jayant Verma (supra), this Court has referred to an earlier decision of this Court in Dalbir Singh Ors. vs. State of Punjab 5 to state that it is not the findings of material facts, direct and inferential, but the statements of the principles of law applicable to the legal problems disclosed by the facts, which is the vital element in the decision and operates as a precedent. Even the conclusion does not operate as a precedent, albeit operates as res judicata. Thus, it is not everything said by a Judge when giving judgment that constitutes a precedent. The only thing in a Judge's decision binding as a legal precedent is the principle upon which the case is decided and, for this reason, it is important to analyse a decision and isolate from it the obiter dicta. RMDC-1 This is an appeal by the State of Bombay from the judgment and order passed on January 12, 1955 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the second petitioner works out to about 5% only. 6. On November 20, 1952 the State of Bombay passed the Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act (Bom 30 of 1952). This Act amended the provisions of the 1948 Act in several particulars. Thus, the words but does not include a prize competition contained in a newspaper printed and published outside the Province of Bombay , which occurred in the definition of Prize Competition in Section 2(1)(d) of the 1948 Act, were deleted and the effect of this deletion was that the scope and the application of the 1948 Act so amended became enlarged and extended so as to cover prize competitions contained in newspapers printed and published outside the State of Bombay. After clause (d) of Section 2(1) the Amending Act inserted a new clause (dd) which defined the words Promoter . A new section was substituted for the old Section 12 and another new section was inserted after Section 12 and numbered as Section 12-A. By this new Section 12-A provision was made for the levy in respect of every prize competition contained in a newspaper or a publication printed outside the State of Bombay for which a licence was obtained un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restrictions on trade, commerce and intercourse between the States and was not saved by Article 304(b) of the Constitution. (h) The restrictions imposed by the impugned Act on the trade or business of the petitioners were not reasonable restrictions in the interests of the general public and, therefore, contravened the fundamental right of the petitioners, who were citizens of India, to carry on their trade or business under Article 19(1)(g) of the Constitution. (i) That Sections 10, 12 and 12-A of the said Act offended against Article 14 of the Constitution inasmuch as they empowered discrimination between prize competitions contained in newspapers or publications printed and published within the State and those printed and published outside the State. 10. The State of Bombay, which is now the appellant before us, on the other hand, maintained that (a) The prize competitions conducted by the petitioners were a lottery. (b) The provisions of the impugned Act were valid and competent legislation under Entries 33, 34 and 62 of the State List. (c) The impugned Act was not extra-territorial in its operation. (d) The prize competitions conducted by the petitioners were opposed to public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and that the State of Bombay, its servants and agents, do allow the petitioners to carry on their trade and business of running the Prize Competition mentioned in the petition and do forbear from demanding, collecting or recovering from the petitioners any tax as provided in the impugned Act or the said Rules in respect of the said Prize Competition and that the State of Bombay do pay to the petitioners their costs of the said applications. 11. Being aggrieved by the decision of the trial Judge, the State of Bombay preferred an appeal on June 8, 1954. The court of appeal dismissed the appeal and confirmed the order of the trial Judge, though on somewhat different grounds. It differed from the learned trial Judge on the view that he had taken that there was no legislative competence in the Legislature to enact the legislation. It held that the topic of legislation was gambling and the Legislature was competent to enact it under Entry 34 of the State List. It, however, agreed with the learned trial Judge that the tax levied under Section 12-A was not a tax on gambling but that it was a tax which fell under Entry 60. It held that there was legislative competence in the Legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lotteries and prize competitions. It is not the purpose of the Act to prohibit either the lotteries or the prize competitions. They urge that the impugned Act deals alike with prize competitions which may partake of the nature of gambling and also prize competitions which call for knowledge and skill for winning success and in support of this contention reliance is placed on the definition of prize competition in Section 2(1)(d) of the impugned Act. We are pressed to hold that the impugned Act in its entirety or at any rate insofar as it covers legitimate and innocent prize competition is a law with respect to trade and commerce under Entry 26 and not with respect to betting and gambling under Entry 34. They also urge that in any event the taxing provisions, namely, Sections 12 and 12-A are taxes on the trade of running prize competitions under Entry 60 and not taxes on betting and gambling under Entry 62. We are unable to accept the correctness of the aforesaid contentions for reasons which we proceed immediately to state. 17. As it has already been mentioned, the impugned Act replaced the 1939 Act which dealt only with prize competitions. Section 2(2) of the 1939 Act defined pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of prize competitions which they qualified were of a gambling nature. Thus a prize competition for which a solution was prepared before hand was clearly a gambling prize competition, for the competitors were only invited to guess what the solution prepared beforehand by the promoters might be, or in other words, as Lord Hewart, C.J., observed in Coles v. Odhams Press, Ltd. [LR (1936) 1 KB 416], the competitors are invited to pay certain number of pence to have the opportunity of taking blind shots at a hidden target . Prize competitions to which the second part of the qualifying clause applied, that is to say, the prize competitions for which the solution was determined by lot, was necessarily a gambling adventure. On the language used in the definition section of the 1939 Act as well as in the 1948 Act, as originally enacted, there could be no doubt that each of the five kinds of prize competitions included in the first category to each of which the qualifying clause applied was of a gambling nature. Nor has it been questioned that the third category, which comprised any other competition success in which does not depend to a substantial degree upon the exercise of skill , con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed outside the Province of Bombay has been deleted. This deletion has very far reaching effect, for it has done away with the exclusion of prize competitions contained in a newspaper printed and published outside the State of Bombay from the scope of the definition. In the next place, it should be noted that the definition of prize competition still comprises three categories as before. The second and the third categories are couched in exactly the same language as were their counterparts in the earlier definitions. It is only in the first category that certain changes are noticeable. The five kinds of prize competitions that were included in the first category of the old definitions are still there but instead of their being set out one after another in a continuous sentence, they have been set out one below another with a separate number assigned to each of them. The qualifying clause has been amended by inserting the words or is not after the word is and before the word prepared and by adding the words or chance after the word lot . The qualifying clause appears, as before, after the fifth item in the first category. It will be noticed that there is a comma after each of the fiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as to include innocent prize competitions. To hold that the first category of prize competitions include innocent prize competitions will go against the obvious tenor of the impugned Act. The 1939 Act dealt with prize competitions only and the first category in the definition given there comprised only gambling competitions. The 1948 Act clubbed together lotteries and prize competitions and the first category of the prize competitions included in the definition as originally enacted was purely gambling as both parts of the qualifying clause clearly indicated. Section 3 of the Act declared all lotteries and all prize competitions unlawful. There could be no reason for declaring innocent prize competitions unlawful. The regulatory provisions for licensing and taxing apply to all prize competitions. If it were intended to include innocent prize competitions in the first category, one would have expected the Legislature to have made separate provisions for the legitimate prize competitions imposing less rigorous regulations than what had been imposed on illegitimate prize competitions. It will become difficult to apply the same taxing sections to legitimate as well as to illegitimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and prize competitions with the same brush as indicated by Section 3 would squeeze in innocent prize competitions in between two categories of purely gambling varieties of them, all the considerations and difficulties we have adverted to in connection with the construction of the first category and the qualifying clause therein will apply mutatis mutandis to the interpretation of this second clause. 21. Reliance is placed on Section 26 of the English Betting and Lotteries Act, 1934 (24 25 Geo. 5 c. 58) in aid of the construction of the second category of prize competitions included in the definition given in the impugned Act. The relevant portion of Section 26 of the aforesaid Act runs thus: 26. (1) It shall be unlawful to conduct in or through any news paper, or in connection with any trade or business or the sale of any article to the public (a) any competition in which prizes are offered for forecasts of the result either of a future event, or of a past event the result of which is not yet ascertained or not yet generally known; (b) any other competition success in which does not depend to a substantial degree upon the exercise of skill: It will be noticed that this section i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction includes two things, for we are unable, with great respect, to agree with The court of appeal that on a proper construction the definition covers both gambling and innocent competitions. In our view, the section, on a true construction, covers only gambling prize competitions and the Act is a law with respect to betting and gambling under Entry 34. As, for the foregoing reasons, we have already arrived at the conclusion just stated, it is unnecessary for us to refer to the language used in the third category and to invoke the rule of construction which goes by the name of noscitur a sociis relied on by learned counsel for the appellant. 22. The next point urged is that although the Act may come under Entry 34, the taxing provisions of Section 12-A cannot be said to impose a tax on betting and gambling under Entry 62 but imposes a tax on trade under Entry 60. Once it is held that the impugned Act is on the topic of betting and gambling under Entry 34, the tax imposed by such a statute, one would think, would be a tax on betting and gambling under Entry 62. The Appeal Court has expressed the view that Section 12-A does not fall within Entry 62, for it does not impose a ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in the language of J.S. Mill quoted by Lord Hobhouse in Bank of Toronto v. Lambe [LR (1887) 12 AC 575] is demanded from the promoter in the expectation and intention that he shall indemnify himself at the expense of the gamblers who sent entrance fees to him. That, we think, is the general tendency of the tax according to the common understanding of men. It is not difficult for the promoters to pass on the tax to the gamblers, for they may charge the proportionate percentage on the amount of each entry as the seller of goods charges the sales tax or he may increase the entrance fee from 4 annas to 5 annas 6 pies to cover the tax. If in particular circumstances it is economically undesirable or practically impossible to pass on the tax to the gamblers, that circumstance is not a decisive or even a relevant consideration for ascertaining the true nature of the tax, for it does not affect the general tendency of the tax which remains. If taxation on betting and gambling is to be regarded as a means of controlling betting and gambling activities, then the easiest and surest way of doing so is to get at the promoters who encourage and promote the unsocial activities and who hold the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es substantially upon exercise of skill cannot be classified as gambling ; it was also held that gambling or conducting the business of gambling is extra-commercium and hence not included within the meaning of trade, commerce or intercourse and consequently, not protected by the fundamental right to trade and profession under Article 19(1)(g) or the freedom of trade, commerce and intercourse under Article 301. 2. The contention of the respondents that in RMDC-1, it was held that category (ii) i.e., any competition in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or not yet generally known may not be dependent on chance, but may include competitions, in which the exercise of knowledge and skill is present was rejected by the Apex Court, which that such a competition is a game of chance and is therefore of a gambling nature. 3. The Apex Court did not agree that such a competition was a game of skill and upheld the tax as falling within the ambit of the then Entry 62 of List II i.e., tax on betting and gambling . The case was not one where it was held that the competition was a game of skill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce that he has on his skills and not his luck. 7. As rightly contended by the petitioners and intervenors, the contention of the respondents that in RMDC-1, it was held that any game whose result is based on a forecast is a gambling activity is liable to be rejected. At paragraph 17, the tripartite categorisation of competitions by the Apex Court was in the context of Clauses (i), (ii) and (iii) of the definition of prize competition as defined under Section 2(1) (d) of the 1948 Act. Such prize competitions were offered through the medium of Newspapers. In the said paragraph-17, it was concluded that the competitions that fall under Category I III were in the nature of gambling. Notably, paragraph-17 lays down a general principle which is that, a competition success wherein does not depend to a substantial degree upon the exercise of skill is now recognised to be of a gambling nature. In other words, competitions wherein success depends on a substantial degree of the exercise of skill are not of a gambling nature. Therefore, de hors the definition of prize competition, the said legal principle at paragraph - 17 will remain constant and universal in its application. On a plain read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture event, and consequently amounts to gambling, by placing reliance on RMDC-1 is entirely misplaced. The Apex Court in RMDC-1 has held that sub- clause (b) of the definition of prize competitions in Section 2 (1) (d) of the Bombay Lotteries and Prize Competition Control and Tax Act, 1948, should be read to mean as applying only to games that are gambling in nature and cannot take within its sweep innocent prize competitions. Thus, forecasting for the purposes of sub clause (b) of Section 2 (1) (d) can only mean forecasting by a third party on an event, the outcome of which is not dependant on the skill of the player involved, such as the result of the rolling of a dice. This is an exclusion of games of skill and cannot be read to mean that all manner of forecasting is gambling. 11. That there is an element of chance in each game and a game of skill , may not necessarily be such an activity where skill must always prevail; however, it is well settled in law, wherein, an activity the exercise of skill can control the chance element involved in the particular activity, such that the better skill would prevail more often than not, such activity qualifies as a game of skill. The game ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less he has obtained in this behalf a licence granted in accordance with the provisions of this Act and the rules made thereunder. Then follow provisions as to licensing, maintaining of accounts and penalties for violation thereof. Section 20 confers power on the State Governments to frame rules for carrying out the purpose of the Act. In exercise of the powers conferred by this section, the Central Government has framed rules for Part C States, and they have been, in general, adopted by all the States. Two of these rules, namely, Rules 11 and 12 are impugned by the petitioners as unconstitutional, and they are as follows: 11. Entry fee. ( 1) Where an entry fee is charged in respect of a prize competition, such fee shall be paid in money only and not in any other manner. (2) The maximum amount of any entry fee shall not exceed Re 1 where the total value of the prize or prizes to be offered is rupees one thousand but not less than rupees five hundred; and in all other cases the maximum amount of an entry fee shall be at the following rates, namely (a) as where the total value of the prize or prizes to be offered is less than rupees five hundred but not less than rupees two hundred a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sections 4 and 5 and Rules 11 and 12 are reasonable restrictions enacted in public interest. But Mr Seervai has fairly conceded before us that on the materials on record in these proceedings, he could not maintain that the restrictions contained in those provisions are saved by Article 19(6) as being reasonable and in the public interest. The ground being thus cleared, the only questions that survive for our decision are (1) whether, on the definition of prize competition in Section 2(d), the Act applies to competitions which involve substantial skill and are not in the nature of gambling; and (2) if it does, whether the provisions of Sections 4 and 5 and Rules 11 and 12 which are, ex concessi void, as regards such competitions, can on the principle of severability be enforced against competitions which are in the nature of gambling. 6. If the question whether the Act applies also to prize competitions in which success depends to a substantial degree on skill is to be answered solely on a literal construction of Section 2 (d), it will be difficult to resist the contention of the petitioners that it does. The definition of prize competition in Section 2(d) is wide and unqualified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in court. They had done no harm to the public and had presented no problems to the States, and at no time had there been any legislation directed to regulating them. And if the State legislatures felt that there was any need to regulate even those competitions, they could have themselves effectively done so without resort to the special jurisdiction under Article 252(1). It should further be observed that the language of the resolutions is that it is desirable to control competitions. If it was intended that Parliament should legislate also on competitions involving skill, the word control would seem to be not appropriate. While control and regulation would be requisite in the case of gambling, mere regulation would have been sufficient as regards competitions involving skill. The use of the word control which is to be found not only in the resolution but also in the short title and the preamble to the Act appears to us to clearly indicate that it was only competitions of the character dealt with in the Bombay judgment, that were within the contemplation of the legislature. 10. Our attention was invited by Mr Seervai to the statement of objects and reasons in the Bill introducing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect either the texture or the colour of the Act; nor do the provisions require to be touched and re-written before they could be applied to them. They will squarely apply to them on their own terms and in their true spirit, and form a code complete in themselves with reference to the subject. The conclusion is therefore inescapable that the impugned provisions, assuming that they apply by virtue of the definition in Section 2(d) to all kinds of competitions, are severable in their application to competitions in which success does not depend to any substantial extent on skill. 24. In the result, both the contentions must be found against the petitioners, and these petitions must be dismissed with costs. There will be only one set of counsel's fee. In this case, the petitioners, who were advertising and running prize tournaments in various Indian states, challenged the constitutionality of the Prize Competitions Act (42 of 955), Section 4 and 5, and Rules 11 and 12 framed under Section 20 of the Act. Their argument was that a prize competition, as defined in Section 2(d) of the Act, included not only gambling competitions but also those acts in which success depended to a signi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided by the Apex Court with reference to application of doctrine of severability that a statute which is void in part will be treated as void in overall or whether the valid part is capable of enforcement. 8. The Apex Court decided the interpretation of Section 2(d) by referring to the circumstances that led to the making of this legislation. Moreover, the Apex court applied the severability principle as to the application of Section 4 and Section 5 and Rules 11 and 12 of the Act not only to the acts involving skill but also to the acts which did not depend on any skill. 9. The Court herein referred to many previously decided cases and used certain criteria laid down by the American Courts while determining the doctrine of severability and came to the conclusion that the provisions challenged by the petitioners are severable in their application to competitions, in which, success is not based on skill in any significant way. 10. The Apex Court held that the impugned provisions were indeed valid following the application of the doctrine of severability, and that competitions that had skill as the main deciding factor of the outcome of the competition would not come within the ambit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as the Crescent Recreation Club situated in Secunderabad were being used as a common gambling house and whether the several respondents who were present at the time of the raid by the police could be said to be gambling therein . The facts of the case are as follows: 3. On May 4, 1963, the police headed by Circle Inspector Krishnaswami raided the premises of the club. They found Respondents 1-5 playing a card game known as rummy for stakes. At the time of the raid, there were some counters on the table as also money and of course the playing-cards with the players. Respondent 6, the Treasurer of the Club, was also present and was holding the stake money which is popularly known as kitty . The 7th respondent is the Secretary of the Club and he has been joined as an accused, because he was in charge of the management of the club. The kitty which the sixth respondent held was Rs 74.62 n.p. and a further sum of Rs 218 was recovered from the table of the 6th respondent. 66 counters were on the table and some more money was found with the persons who were indulging in the game. The evidence of the Circle Inspector is that he had received credible information that the premises of the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner assist in conducting, the business of, any such house, enclosure or open space. The members of the club which is a ( Members'Club ) would prima facie be liable but as they are not before us, we need not consider the question whether they should also have been arraigned in the case or not. The Secretary and the Treasurer, who were respectively Accused 7 and 6 were so arraigned as it was thought they came within the reach of Section 4 because they were in the care and management of the club itself. 5. The learned Magistrate who tried the case was of the opinion that the offence was proved, because of the presumption since it was not successfully repelled on behalf of the present respondents. In the order making the reference the learned Sessions Judge made two points : He first referred to Section 14 of the Act which provides that nothing done under the Act shall apply to any game of mere skill wherever played and he was of opinion on the authority of two cases decided by the Madras High Court and one of the Andhra High Court that the game of rummy was a game of skill and therefore the Act did not apply to the case. He also held that there was no profit made by the members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -idem as regards the ratio laid down by the Apex Court in Satyanarayana s case that Rummy preponderantly was a game of skill and that from this alone, it cannot be said that Rummy is a game of chance and there is no skill involved in it. 2. This decision was heavily relied upon by the Respondents to submit that playing a game of skill (rummy) for stakes also amounts to betting and gambling. Reliance was placed upon paragraph 12, which reads as under:- 12. The game of Rummy is not a game entirely of chance like the 'three-card' game mentioned in the Madras case to which we were referred. The 'three card' game which goes under different names such as 'flush', 'brag' etc. is a game of pure chance. Rummy, on the other hand, requires certain amount of skill because the fall of the cards has to be memorised and the building up of Rummy requires considerable skill in holding and discarding cards. We cannot, therefore, say that the game of Rummy is a game of entire chance. It is mainly and preponderantly a game of skill. The chance in Rummy is of the same character as the chance in a deal at a game of bridge. In fact in all games in which cards are shuffled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal was charging a heavy charge on the members for playing in card room for the purposes of making a profit or gain i.e., 5 points per game and the said scenario cannot be extended to the Petitioner Company s platform. 7. As rightly contended by the petitioners to suggest that paragraph-10 of the said judgment prohibits making of any profit or gain derived from organising a game of skill would run counter to the definition of a Common gambling-house since to fall within the said definition, an instrument of gaming must be used for profit or gain . However, at paragraph - 12 of the said decision, the game of rummy was held to be protected under Section 14 of the Hyderabad Gambling Act, which necessarily implies that the said game is not hit by any of the other provisions of the Act and therefore, any profit or gain derived from playing rummy would not make the organiser a common gambling-house. If the said judgment is interpreted to mean that no fees can be imposed on players for playing a skill-based game, then effectively even an organiser of a chess competition who charges an entrance fee on the players to participate in the competition would be guilty of running a common gaming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, the Petitioners, in terms of its contract with the players, collects a percentage of the amounts staked as its platform fees / commission for providing its services as an intermediary. Thus, the Respondents cannot be permitted to supply words to these observations and say that placing of stakes on a game of skill amounts to gambling. In any event, from a reading of the whole judgment, it is evident that this last line is not the ratio of the judgment at all. M.J. SIVANI S CASE In M.J.Sivani s case supra, in the context of video games, the Apex Court held as under: 3. The primary question is whether video games require to be regulated under the respective Mysore Police Act, 1963 and the notifications issued there under and the Madras City Police Act, 1888 and the orders of the Tamil Nadu Government in GOMs No. 166-0 dated 18-1-1993 and the allied..... 4. The main thrust in these appeals is whether the video games attract the relevant orders and is a game within the definition of 'gaming' defined under the Tamil Nadu Gaming Act, 1930 or the Madras City Police Act or of the Mysore Act etc. The contention of the appellants is that it does not involve collection, soliciting, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a volume control with a steering wheel and accelerator, guntrigger control or potentiometer etc...... Video gaming, therefore, is associated with stakes or money or money's worth on the result of a game, be it a game of pure chance or of mixed skill and chance. 15. For a commoner or a novice, it is difficult to play video game with skill. Ordinary common people who join the game can hardly be credited with skill for success in the game. The forecast is nothing better than a shot at a hidden target. Whether a particular video game is a game of skill or a game of chance, or mixed chance or skill requires to be determined on the main element, namely, skill or chance. If it is a game of pure chance or mixed chance and skill, it is gaming. Even if the game is for amusement or diversion of a person from his usual occupation for entertainment, it would constitute 'gaming'. The object of the relevant Act, notification or orders made thereunder is to regulate running of the video games and for that licence is required from the licensing authority 16. In Madras cases, the Commissioner prohibited afore-enumerated games as pure games of chance and permitted certain other games as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suring that such games are not visible from outside. There is no scope for using one's skill to arrive at a desired result in the games like Royal Casino, Super Continental, Five Line, High Low, Black Jack, Poker Double Up, Skill Ball, Pac Man and Golden Derby. They were classified as games of chance. By allowing such games, the innocent children and the common public would lose hard-earned money. Machines electronically operated are adjusted in such a way that the player always lose the game since no skill is involved. Machines were tampered with, so that chances of winning by the player was almost an impossibility. The Commissioner, therefore, had prohibited such games of chance while permitting to play the games of skill. 18. The question then emerges whether regulation of video games violates the fundamental right to trade or business or avocation of the appellants guaranteed under Articles 19(1)(g) and 19. The licensing authority, therefore, is conferred with discretion to impose such restrictions by notification or order having statutory force or conditions emanating therefrom as part thereof as are deemed appropriate to the trade or business or avocation by a licence or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and a game of skill , and sometimes also a combination of both, is not supported by his reliance on M.J SIVANI v. STATE OF KARNATAKA . We are not convinced that M.J. SIVANI recognises a functional difference between actual games and virtual games. This case was decided on the basis of a wider interpretation of the definition of gaming in the context of a legislation which was enacted to regulate the running of video parlours and not banning of video games; true it is that the Apex Court treated certain video games as falling within the class of games of chance and not of games of skill . However, such a conclusion was arrived at because of manipulation potential of machines that was demonstrated by the reports of a committee of senior police officers; this report specifically stated about the tampering of video game machines for eliminating the chance of winning. This decision cannot be construed repugnant to Chamarbaugwala jurisprudence as explained in K.R. LAKSHMANAN. We are of a considered view that the games of skill do not metamorphise into games of chance merely because they are played online, ceteris paribus. Thus, SIVANI is not the best vehicle for drawing a distinction b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o mean that playing a game which is preponderantly of skill played with either money or stakes amounts to gambling and must be seen to have been tempered by the clear enunciation of the law qua gaming and gambling in the later Three Judge Bench judgment in the case of K.R.Lakshmanan supra. K.R. LAKSHMANAN S CASE The Madras Race Club (the Club) is an Association registered as a company with limited liability under the Companies Act, 1956. The Club was formed in the year 1896 by taking over the assets and liabilities of the erstwhile unincorporated club known as Madras Race Club. According to its Memorandum and Articles of Association, the principal object of the Club is to carry on the business of a race-club in the running of horseraces. The Club is one of the five Turf Authorities of India , the other four being the Royal Calcutta Turf Club, the Royal Western India Turf Club Limited, the Bangalore Turf Club Limited and the Hyderabad Race Club. Race meetings are held in the Club's own racecourse at Madras and at Uthagamandalam (Ooty) for which bets are made inside the racecourse premises. While horse-races are continuing in the rest of the country, the Tamil Nadu Legislature, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chance. In these games the result is wholly uncertain and doubtful. No human mind knows or can know what it will be until the dice is thrown, the wheel stops its revolution or the dealer has dealt with the cards. A game of skill, on the other hand although the element of chance necessarily cannot be entirely eliminated is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player. Golf, chess and even rummy are considered to be games of skill. The courts have reasoned that there are few games, if any, which consist purely of chance or skill, and as such a game of chance is one in which the element of chance predominates over the element of skill, and a game of skill is one in which the element of skill predominates over the element of chance. It is the dominant element skill or chance which determines the character of the game. 4. The Public Gambling Act, 1867 provided punishment for public gambling and for keeping of common gaming-house . The Act did not bring within its scope the betting on horse-races. The Bengal Public Gaming Act, 1867 provided punishment for public gambling and the keeping of common gaming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hedaya Vol. IV, Book XLIV, includes gambling as a kiraheeat or abomination. 7. The learned Chief Justice then referred to various statutes in India prohibiting public gambling and also referred to case-law on the subject in other countries. He quoted the following observations of McTiernan, J. of the Australian High Court in King v. Connara [(1939) 61 CLR 596] : Some trades are more adventurous or speculative than others, but trade or commerce as a branch of human activity belongs to an order entirely different from gaming or gambling. Whether a particular activity falls within the one or the other order is a matter of social opinion rather than jurisprudence. It is gambling to buy a ticket or share in a lottery. Such a transaction does not belong to the commercial business of the country. The purchaser stakes money in a scheme for distributing prizes by chance. He is a gamester. On the question whether gambling is protected either by Article 19(1)(g) or Article 301 of the Constitution, this Court held as under: (42) It will be abundantly clear from the foregoing observations that the activities which have been condemned in this country from ancient times appear to have been equal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blind shots at a hidden target . Prize competitions to which the second part of the qualifying clause applied, that is to say, the prize competitions for which the solution was determined by lot, was necessarily a gambling adventure. *** Nor has it been questioned that the third category, which comprised any other competition success in which does not depend to a substantial degree upon the exercise of skill , constituted a gambling competition. At one time the notion was that in order to be branded as gambling the competition must be one success in which depended entirely on chance. If even a scintilla of skill was required for success the competition could not be regarded as of a gambling nature. The Court of Appeal in the judgment under appeal has shown how opinions have changed since the earlier decisions were given and it is not necessary for us to discuss the matter again. It will suffice to say that we agree with the Court of Appeal that a competition in order to avoid the stigma of gambling must depend to a substantial degree upon the exercise of skill. Therefore, a competition success wherein does not depend to a substantial degree upon the exercise of skill is now recogni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everable in its application to such competitions. The learned Judge thereafter observed as under: we must hold that as regards gambling competitions, the petitioners before us cannot seek the protection of Article 19(1)(g) . (5) As regards competitions which involve substantial skill however, different considerations arise. They are business activities, the protection of which is guaranteed by Article 19(1)(g) . Finally, Venkatarama Ayyar, J. speaking for the Court held as under: (23) Applying these principles to the present Act, it will not be questioned that competitions in which success depends to a substantial extent on skill and competitions in which it does not so depend, form two distinct and separate categories. The difference between the two classes of competitions is as clearcut as that between commercial and wagering contracts. On the facts there might be difficulty in deciding whether a given competition falls within one category or not; but when its true character is determined, it must fall either under the one or the other. The distinction between the two classes of competitions has long been recognised in the legislative practice of both the United Kingdom and this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the State Government set apart for the purpose. For the purposes of this definition, wagering or betting shall be deemed to comprise the collection or soliciting of bets, the receipt of distribution of winnings or prizes, in money or otherwise, in respect of any wager or bet, or any act which is intended to aid or facilitate wagering or betting or such collection, soliciting, receipt or distribution. Instruments of gaming. Instruments of gaming include any article used or intended to be used as a subject or means of gaming, any document used or intended to be used as a register or records or evidence of any gaming, the proceeds of any gaming, and any winnings or prizes in money or otherwise distributed or intended to be distributed in respect of any gaming. 11. Section 42 of the Police Act gives power to the Commissioner to grant warrant to enter any place which is used as a common gaming-house and the arrest of persons found therein and to seize all instruments of gaming etc. Section 43 provides that any cards, dyes, gaming-table or cloth, board or other instruments of gaming found in any place entered or searched under Section 42 shall be evidence that such place is used as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use, room, tent, enclosure, vehicle, vessel or place, opens, keeps or uses the same for the purpose of gaming (i) on a horse-race, or (ii)-(vi)*** (b)-(d)*** The above-quoted Section 4 of the Gaming Act was substituted by Section 3(1) of the 1955 Act. This section is identical to Section 49-A of the Police Act. 13. The expression gaming as originally defined under the Police Act and the Gaming Act (the two Acts) did not include wagering or betting on a horserace when such wagering or betting took place (i) on the date on which such race was to run; and (ii) in a place or places within the race enclosure which the authority controlling such race had with the sanction of the State Government set apart for the purpose. The definition of gaming in the two Acts was sought to be amended by Sections 2 and 4 of the Madras City Police and Gaming (Amendment) Act, 1949 (the 1949 Act). The said sections are reproduced hereunder: 2. In the Madras City Police Act, 1888, in Section 3, for the definition of Gaming the following definition shall be substituted, namely: Gaming does not include a lottery but includes wagering or betting. Explanation . For the purpose of this definition, wagering or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26 of the Constitution. The challenge was primarily on two grounds. It was contended before the High Court that the betting on the horse-races not being gambling the State Legislature, under Entry 34 of List II of the Seventh Schedule to the Constitution, had no legislative competence to legislate the 1974 Act. In other words the contention was that Entry 34 being betting and gambling unless both betting and gambling are involved the State Legislature has no legislative competence to make the law. It was also contended that horse-racing being a game of substantial skill, the provisions of the two Acts were not applicable to horse-races. The High Court rejected both the contentions. The High Court held horse-racing to be a game of chance, and as such gambling, on the following reasons: The question is whether, having regard to this approach, betting on horse-races is of gambling nature. We are told that it is not, because betters bring to bear on betting considerable knowledge of each horse as to its ancestry or pedigree, history of its performance in the previous races, various other factors and related circumstances and skill based on such knowledge and experience in horse-racing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... skill or a game of chance. The said question was to be answered on the interpretation of Section 14 of the Hyderabad Gambling Act (2 of 1305-F) which was pari materia to Section 49 of the Police Act and Section 11 of the Gaming Act. This Court referred to the proceedings before the courts below in the following words: The learned Magistrate who tried the case was of the opinion that the offence was proved, because of the presumption since it was not successfully repelled on behalf of the present respondents. In the order making the reference the learned Sessions Judge made two points: He first referred to Section 14 of the Act which provides that nothing done under the Act shall apply to any game of mere skill wherever played and he was of opinion on the authority of two cases decided by the Madras High Court and one of the Andhra High Court that the game of rummy was a game of skill and therefore the Act did not apply to the case. (emphasis added) This Court held the game of rummy to be a game of mere skill on the following reasoning: We are also not satisfied that the protection of Section 14 is not available in this case. The game of rummy is not a game entirely of chance like t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are not necessarily consistent in fitness, which is the reason why horses are exercised openly and watched carefully by representatives of the Press and their observations widely published. Thus, the inherent capacity of the animal, the capability of the jockey, the form and fitness of the horse, the weights carried and the distance of the race at the time of the race are all objective facts capable of assessment by race-goers. Thus the prediction of the result of the race is not like drawing 3 aces in a game of poker. Rather, it is the result of much knowledge, study and observation . Horse-racing has been universally recognised as a sport. Horsemanship involves considerable skill, technique and knowledge and jockeys have to be specially trained over a period of years. Whether a particular horse wins at the race or not, is not dependent on mere chance or accident but is determined by numerous factors, such as the pedigree of the animal, the training given to it as well as the rider, its current form, the nature of the race etc. Horseracing has been held judicially to be a game of skill unlike pure games of chance like roulette or a lottery. The above-quoted averments have not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k, the pedigrees being based on earlier racing calendars and sales papers. After a few years of revision, it was updated annually. All thoroughbreds are said to descend from three Oriental stallions (the Darley Arabian, the Godolphin Barb, and the Byerly Turk, all brought to Great Britain, 1690-1730) and from 43 royal mares (those imported by Charles II). The predominance of English racing and hence of the General Stud Book from 1791 provided a standard . A race-horse achieves peak ability at age five, but the classic age of three years and the escalating size of purses, breeding fees, and sale prices made for fewer races with horses beyond the age of four . Over the centuries the guiding principle for breeding thoroughbreds has been, as expressed by an old clich : breed the best to the best and hope for the best. Performance of progeny is the most reliable guide to what is best for breeding purposes, of course but in the case of horses untried at stud, their own racing ability, pedigree, and physical conformation are the only available yardsticks. Emphasis is on racing ability, especially in evaluating potential stallions. 24. Horse-racing is an organized institution. Apart from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51 : 249 P 1016] ; Panas v. Texas Breeders Racing Assn. Inc. [Tex Civ App 80 SW 2d 1020] ; State v. Thompson [160 Mo 333 : 60 SW 1077 : 54 LRA 950 : 83 Am St Rep 468] ; Engle v. State of Arizona [(1939) 53 Ariz 458 : 90 P 2d 988] ; Stoddart v. Sagar [64 LJ MC 234 : (1895) 2 QB 474 : (1895-9) All ER Rep Ext 2048] ; Caminada v. Hulton [(1891) 60 LJ MC 116 : 64 LT 572]. Under the above authorities it is clear that parimutuel betting on a horse-race is not a lottery. In a lottery the winner is determined by lot or chance, and a participant has no opportunity to exercise his reason, judgment, sagacity or discretion. In a horserace the winner is not determined by chance alone, as the condition, speed and endurance of the horse and the skill and management of the rider are factors affecting the result of the race. The better has the opportunity to exercise his judgment and discretion in determining the horse on which to bet. The pari-mutuel method or system of betting on a horse-race does not affect or determine the result of the race. The pari-mutuel machine is merely a convenient mechanical device for recording and tabulating information regarding the number and amount of bets (Utah Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for blind uncertainty is the chief element of chance. In fact, pure chance consists in the entire absence of all the means of calculating results; accident in the unusual prevention of an effect naturally resulting from the means employed. That the fleetest horse sometimes stumbles in the racecourse and leaves the victory to its more fortunate antagonist is the result of accident, but the gambler, whose success depends upon the turn of the cards or the throwing of the dice, trusts his fortune to chance. It is said that there are strictly few or no games of chance, but that skill enters as a very material element in most or all of them. This, however, does not prevent them from being games of chance within the meaning of the law. There are many games the result of which depends entirely upon skill. Chance is in nowise resorted to therein. Such games are not prohibited by the statute. But there are other games (in) which, although they call for the exercise of much skill, there is an intermingling of chance. The result depends in a very considerable degree upon sheer hazard. These are the games against which the statute is directed, and horse-racing is not included in that class. 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conclusion that horse-racing is a sport which primarily depends on the special ability acquired by training. It is the speed and stamina of the horse, acquired by training, which matters. Jockeys are experts in the art of riding. Between two equally fast horses, a better trained jockey can touch the winning-post. 31. In view of the discussion and the authorities referred to by us, we hold that horse-racing is a game where the winning depends substantially and preponderantly on skill. 32. Mr Ashok Desai, learned counsel for the State of Tamil Nadu, has contended that the handicap horse-races introduce an element of chance and as such horse-racing is not a game of skill. We do not agree. It is no doubt correct that in a handicap race the competitors are given advantages or disadvantages of weight, distance, time etc. in an attempt to equalize their chances of winning, but that is not the classic concept of horse-racing, according to which the best horse should win. The very concept of handicap race goes to show that there is no element of chance in the regular horseracing. It is a game of skill. Even in a handicap race despite the assignment of imposts the skill dominates. In any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1955 till 31-31975 horse-racing was not prohibited under the two Acts, despite the fact that Section 49-A of the Police Act and Section 4 of the Gaming Act were also operating. If we accept the contention of the learned counsel for the respondents that Section 49-A of the Police Act and Section 4 of the Gaming Act prohibit the holding of the horse-races then two contradictory provisions had been operating in the two Acts from 1955 till 1975. One set of provisions would have prohibited the horse-races by making it an offence and the other set of provisions would have permitted the horse-races. The legislature could have never intended such a situation. The only reasonable interpretation which can be given to the two sets of provisions in the two Acts is that they apply to two different situations . Section 49-A of the Police Act and Section 4 of the Gaming Act do not apply to wagering or betting in the Club premises and on the horse-races conducted within the enclosure of the Club. These sections are applicable to the bucket-shops run in the city streets or bazaars purely for gambling purposes. It would be useful to have a look at the Statement of Objects and Reasons of the 1955 Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese sections are applicable to the bucket-shops or any house, houseroom, tent, enclosure, vehicle, etc. which are run in the streets, bazaars or any other place away from the Club. 51. We allow the writ petitions and the civil appeal. The impugned judgment of the High Court is set aside. We hold and declare that horse-racing is a game of mere skill within the meaning of Section 49 of the Police Act and Section 11 of the Gaming Act. Horse-racing is neither gaming nor gambling as defined and envisaged under the two Acts read with the 1974 Act and the penal provisions of these Acts are not applicable to the horse-racing which is a game of skill. The 1986 Act is ultra vires Article 14 of the Constitution and as such is struck down. The Madras Race Club was a registered company which was involved in horse racing. The Tamil Nadu Horse Races (Abolition and Wagering or Betting) Act, 1974 abolished horse racing in Tamil Nadu. Aggrieved by the enactment of this legislation, the petitioners contended that Horse riding is a universally recognised sport. It involves a special skill to win a match which is not based on betting or gambling. It depends upon the pedigree of the horse, the ability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of skill does not amount to gambling. 5. The contention of the Respondents that an exception on wagering or betting on horse racing is carved out in specific circumstances, and therefore wagering or betting otherwise is not permitted is specifically answered in the negative in paragraph-35 of Lakshmanan s case, where the Hon ble Supreme Court has held that these Sections in question are applicable to bucket-shops in the city streets or bazaars, purely for gambling purposes (in other words, where it cannot be said to be a game of skill). It is also pertinent to note that the Hon ble Supreme Court, in paragraph - 26 has noticed with approval the judgment of the Michigan Supreme Court in Edward J. Rohan vs. Detroit Racing Association, 166 ALR 1246 SW 2d 987, where the Michigan Supreme Court has held that pari-mutuel betting on a horse race is not a lottery (or in other words in not gambling). 6. The decision in the K.R. Lakshmanan s case (supra) was strongly relied upon by the Respondents to suggest that staking of money on horseracing (a game of skill) amounts to betting and gambling. However, it was specifically exempt under the definition of gaming under the Police Act and the Gam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xperts in the art of riding. Between two equally fast horses, a better trained jockey can touch the winning-post. In view of the discussion and the authorities referred to by us, we hold that the horse-racing is a game where the winning depends substantially and preponderantly on skill. 9. The Apex Court further held that gaming is the act or practice of gambling on a game of chance and that gaming is staking on chance, where chance is the controlling factor. Gaming is under the Police Act and the Gaming Act is therefore wagering or betting on games of chance and that it would not include staking on games of skill i.e., horse racing. The term chance in this context must be applied with reference to game of chance only. It is not chance in the sense that the outcome is uncertain, and is therefore subject to chance. Merely because the term wagering or betting is used in connection with horse racing does not indicate that staking on horseracing, a game of skill, amounts to betting and gambling. The relevant extract of the decision is as follows: The expression `gaming' in the two Acts has to be interpreted in the light of the law laid-down by this Court in the two Chamarbaugwala c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and Section 11 of the Gaming Act, but it is protected as it does not amount to gaming itself in the first place. If it is not gaming under the said Acts, it does not amount to betting and gambling. In any event, if nothing in those Acts can apply to games of skill under Section 49 of the Police Act and Section 11 of the Gaming Act, playing any game of skill for stakes or otherwise, cannot attract the provisions of those Acts. It appears therefore that our analysis stating that in games of skill, the person places a stake based on his confidence and even third parties would do so is also clear. Under these circumstances, it is clear that Lakshmanan s case completely supports the petitioners and the contentions of the respondents in this regard cannot be accepted. Head Digital Works case Kerala High Court The High Court of Kerala came to the conclusion that playing for stakes or playing not for stakes can never be a criterion to find out whether a game is a game of skill. Online rummy played with or without stakes remains to be a game of skill . It was held that since the game does not come within the meaning of gambling or gaming , providing a platform for playing the game, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench of this Court vide Order dated 14.02.2022 declared the subject provisions of the Amendment Act as ultra vires the Constitution and struck them down by holding as under: The tickling tone for this judgment can be set by what Lord Denning had humoured in TOTE INVESTORS LTD. vs. SMOKER (1968) 1 QB 509 : ...The defendant has in the past occasionally had a wager on a horse-race. Today she has been taking part in another game of chance or skill the game of litigation... All these petitions by the companies individuals involving substantially similar questions of law facts seek to lay a challenge to the validity of the Karnataka Act No.28 of 2021 (hereafter Amendment Act ) whereby the Karnataka Police Act, 1963 (hereafter Principal Act ) has been amended; the cumulative effect of these amendments, according to them, is the criminalization of playing or facilitating online games .. III. GROUNDS OF CHALLENGE BRIEFLY STATED: The challenge to the Amendment Act is structured inter alia on the following grounds: (i) Lack of legislative competence since the Amendment Act does not fit into Entry 34, List II, Schedule VII of the Constitution of India vide CHAMARBAUGWALA-I AIR 1957 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cognizable nonbailable, it makes the punishment more stringent commensurating with the gravity of the offence. However, if persons merely play a game of chance or a game of skill without risking cash or kind, they do not fall in the net of penal provisions. 1. AS TO WHAT THE IMPUGNED TEXTUAL CHANGES TO THE AMENDMENT ACT DOES TO THE PRINCIPAL ACT: For ease of understanding, what the Principal Act prior to 2021 Amendment was and what it has become post Amendment, their relevant comparative texts are furnished in the following comparative tabular forms. Whatever has been added to or deleted from the Principal Act is shown in bold italics: 2. AS TO WHAT IMPACT THE AMENDMENT HAS ON THE RIGHTS LIBERTIES OF INDIVIDUALS: (a) The Karnataka Police Act, 1963 was enacted by the State Legislature for the regulation of police force, the maintenance of public order and for the prevention of gambling. It received the assent of the President of India on 18.01.1964 and came to be gazetted on 13.02.1964. This Act came into force with effect from 02.04.1965 as notified. The Act has been amended as many as a dozen times between 1965 and 2021. Except the 2021 amendment, the rest are not put in challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the US Supreme Court, Supreme Court of Australia or Canada, or the decision of the Privy Council can be referred to for showing the evils of gambling, there is no reason why references should not be made to Hindu Law and to Hindu religious books, or to Mohammadan Law, to show that gambling had been condemned in India from ancient times . (b) Gambling is perhaps as old as mankind. Betting gambling have always been a part of several civilizations. The Greeks and Romans were among the first to practise gambling. Most of the scriptures, native foreign shun them. In India from time immemorial, sages had proscribed gambling as a sinful and pernicious vice. Sage Kanvasha Ailusha (Aksha Maujavant) had composed a cautionary poem/hymn in Rig Veda (10.34) which is titled The Gambler's Lament . It comprises monologue of a repentant gambler who grieves the ruin brought on him because of addiction to the game of dice; this Veda (10.34) has a hymn which nearly translates to: a gambler s wife is left forlorn and wretched; the mother mourns the son who wanders homeless, in constant fear, in debt and seeking money by theft in the dark of night. In raajsooya yaag, of middle Vedic period, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nger be betting or gambling in the country. Dr. Ambedkar erased their impression by the following reply: I should like to submit to them that if this entry was omitted, there would be absolutely no control of betting and gambling at all, because if Entry 45 was there it may either be used for the purpose of permitting betting and gambling or it may be used for the purposes of prohibiting them. If this entry is not there, the provincial governments would be absolutely helpless in the matter... If this Entry was omitted, the other consequence would be that this subject will be automatically transferred to List I under Entry 91.... If my friends are keen that there should be no betting and gambling, then proper thing would be to introduce an article in the Constitution itself making betting and gambling a crime, not to be tolerated by the State. As it is, it is a preventive thing and the State will have full power to prohibit gambling . CAD of 02.09.1949, Volume IX. (b) The first ground vehemently canvassed by petitioners is that the subject amendment could not have been enacted for want of legislative power. Drawing the attention of Court to Entry 34 of State List which employs the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not a mere Act which declares what the law is to be... . IX. SCOPE OF ENTRY 34 IN STATE LIST; CHAMARBAUGWALA JURISPRUDENCE; GAMES OF SKILL vs. GAMES OF CHANCE: Learned advocates appearing for the petitioners submitted that the term 'Betting and gambling' employed in Entry 34, List II having been treated as a constitutional concept in CHAMARBAUGWALLA I II and in the cases that followed, as distinguished from an ordinary legal concept this Court too has to construe it accordingly. They contended that substantially the Amendment Act being pari materia with the statutes of other States, the approach of this Court to the matter needs to be consistent with the relevant decisions of several High Courts in the country. They also notified that some of these have been affirmed by the Apex Court on challenge. Justice Oliver Wendell Holmes in TOWNE vs. EISNER, had said A word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and time in which it is used... . The two words namely Betting and gambling as employed in Entry 34, List II have to be read conjunctively to mean only bett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvations is that: gambling is something that does not depend to a substantial degree upon the exercise of skill, and therefore something which does depend, ought not to be considered as gambling; as a logical conclusion, a game that involves a substantial amount of skill is not a gambling. (ii) In R.M.D.CHAMARBAUGWALA-II, supra the Court was treating the question, whether it was constitutionally permissible for section 2(d) of the Prize Competition Act, 1955, which defined Prize Competition to take within its embrace not only the competitions in which success depended on chance but also those wherein success depended to a substantial extent on the skill of player. What is observed in CHAMARBAUGWALA-I becomes further clear by the following observations in this case: ... If the question whether the Act applies also to prize competitions in which success depends to a substantial degree on skill is to be answered solely on a literal construction of s.2 (d), it will be difficult to resist the contention of the petitioners that it does. The definition of prize competition in s. 2(d) is wide and unqualified in its terms. There is nothing in the working of it, which limits it to competitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in it... (iv) In K.R. Lakshmanan, a Three Judge Bench of the Apex Court was examining the vires of amendments to the Madras City Police Act, 1888 and the Madras Gaming Act, 1940 whereby the exception carved out for wagering on horse-racing from the definition of gaming was deleted, much like the effect of the Amendment Act herein which inter alia widens the definition of gaming to include wagering on games of skill , that hitherto enjoyed constitutional protection. Having considered CHAMARBAUGWALAS-I II, K.SATYANARAYANA and some notable decisions of foreign jurisdictions, the Court succinctly stated the difference between a game of chance and a game of skill, as under: 3. The new Encyclopedia Britannica defines gambling as The betting or staking of something of value, with consciousness of risk and hope of gain on the outcome of a game, a contest, or an uncertain event the result of which may be determined by chance or accident or have an unexpected result by reason of the better's miscalculations . According to Black's Law Dictionary (Sixth Edition) gambling involves, not only chance, but a hope of gaining something beyond the amount played. Gambling consists of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the success in dream 11 fantasy sports depends upon users exercise of skill based on superior knowledge, judgment and attention, and that the result of the game was not dependent on the winning or losing of the particular team in the real world game on any particular day. The Court said It is undoubtedly a game of skill and not a game of chance. The matter was carried upward to the Apex Court in SLP (Criminal) No. 43346/2019 which came to be dismissed on 13.12.2019. (iii) The Division Bench of Hon ble High Court of Madras in JUNGLEE GAMES INDIA PRIVATE LIMITED vs. STATE OF T.N, having extensively discussed the two CHAMARBAUGWALAS and K.SATYANARAYANA as further developed in K.R. LAKSHMANAN, has invalidated Act 1 of 2021 which had amended the Tamil Nadu Gaming Act, 1930, as being ultra vires the Constitution. The observations at paragraph 125 of the judgment are profitably reproduced below: It is in such light that Betting and gambling in Entry 34 of the State List has to be seen, where betting cannot be divorced from gambling and treated as an additional field for the State to legislate on, apart from the betting involved in gambling. Since gambling is judicially defined, the bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of chance' or a 'game of skill', is to be adjudged by applying the Predominance Test: a game involving substantial degree of skill, is not a game of chance, but is only a game of skill and that it does not cease to be one even when played with stakes. As a corollary of this, a game not involving substantial degree of skill, is not a game of skill but is only a game of chance and therefore falls within the scope of Entry 34 in the State List. XI. AS TO THE VIEW OF FOREIGN JURISDICTIONS ABOUT GAMES OF SKILL: (i) In UNITED STATES OF AMERICA vs. LAWRENCE DICRISTINA, the Second US Circuit of Appeal, New York, tossed out the conviction and vacated the indictment of Mr. Lawrence who ran the warehouse wherein the poker game Texas Hold Em was played .. XII. AS TO DIFFERENCE BETWEEN ACTUAL GAMES VIRTUAL GAMES, AND IF ALL ONLINE GAMES ARE GAMES OF CHANCE: The vehement contention of Learned Advocate General that gaming includes both a 'game of chance' and a 'game of skill', and sometimes also a combination of both, is not supported by his reliance on M.J SIVANI vs. STATE OF KARNATAKA. We are not convinced that M.J. SIVANI recognises a functional difference between a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bling... In view of the settled position of law, it hardly needs to be stated that gambling, i.e., the games of chance do not enjoy any Constitutional protection since they are mala in se. It is open to the legislature to absolutely prohibit them as is done to the trades in noxious or dangerous goods or trafficking in women. However, games of skill by their very nature stand on a different footing. (b) Learned Advocate General appearing for the State contends that: the games of chance being res extra commercium, the games of skill fall within the field of 'Trade commerce' under Entry 26 of State List. The fundamental right inter alia of trade business is guaranteed under Article 19(1) (g) and therefore, the same is subject to reasonable restrictions imposed under Article 19(6). A reasonable restriction may also include an absolute embargo. Regard being had to enormous adverse implications of online gaming on the society in general and the younger generation in particular, the Amendment Act is made criminalizing the cyber games. In support of his contention, he banks upon CHAMARBAUGWALAS, K.R.LAKSHMANAN M.J. SIVANI, supra . He draws attention of the Court to a spate of suici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensuring the least sacrifice from the competing claimants. As already mentioned above, the Amendment Act puts an absolute embargo on the games of skill involving money or stakes. Learned Advocate General contended that the State was not in a position to apply the least restrictive test and that the prohibition being the objective of the Amendment Act, there is no scope for invoking the said test at all. This amounts to throwing the baby with bath water. (h) In a progressive society like ours, imposing an absolute embargo, by any yardstick appears to be too excessive a restriction. In such cases, a heavy burden rests on the State to justify such an extreme measure, as rightly contended by the petitioners. There is no material placed on record to demonstrate that State whilst enacting such an extreme measure, has considered the feasibility of regulating wagering on games of skill. If the objective is to curb the menace of gambling, the State should prohibit activities which amount to gambling as such and not the games of skill which are distinct, in terms of content and produce. The State action suffers from the vice of paternalism since there is excessive restriction on the citizen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame is played for a wager, bet, money or other stake. Also, the main features of the Amending Act was to enlarge the inclusive definition of the word gaming where the Section 3-A was introduced in the Act to prohibit wagering or betting in cyberspace and, the replacement of the substance of Section 11 of the Act that originally exempted games of mere skill from the application of the statute and its substitution by including games of mere skill also within the fold of offences under the statute, if such games are played for wager, bet, money or other stake. XX. AS TO WHETHER CHAMARBAUGWALA JURISPRUDENCE HAS LOST RELEVANCE DUE TO ADVANCEMENT OF SCIENCE TECHNOLOGY: (a) Learned Advocate General appearing for the State in his imitable style and vociferously contended that: the provisions of an organic Constitution like ours have to be construed keeping in view contemporary socio-economic developments and the new challenges associated with the same. There has been a paradigm shift in the whole lot of activities in the society owing to advancement of science technology. New implications and difficulties are cropping up in the society justifying innovative ventures on the part of the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inion to be treated in law as though they were the same . (b) The amended definition of 'gaming' excludes in so many words, 'a lottery or wagering or betting on horse-race run on any race course' in a given circumstance. The Apex Court in K.R.LAKSHMANAN supra held that, horse-racing is a 'game of mere skill' and therefore, it is 'neither gaming nor gambling'. If the legislative policy is to protect the games of skill from being treated as proscribed, the Amendment Act being unjustifiably selective in that suffers from a grave constitutional infirmity. It offends the clause of 'equal protection of the laws' enacted in Article 14, since protection is unreasonably sectarian. The equal protection clause would be diluted into a mild constitutional injunction that the State shall treat as equal in law only the horse-racers who are equal in fact with other players of games of skill. For saving such a blatant discrimination, the respondents have failed to establish the reasonable basis on which such a classification is founded and the rational nexus identifiable between the differentia of and the object sought to be achieved by such a classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but are inserted after the Bill has become law states Maxwell on Interpretation of Statutes, 12th Edn. Butterworths at page 11. Of course, since 2011, there is change in practice. In India, even headings are part of the Bill and are voted in the legislature. They provide the context for the substantive part of the section. They are there for guidance. Therefore, they cannot be ignored. Due significance has to be attached to the heading of a section in a statute. The substantive text of Section 176 makes the penal provisions enacted in Sections 79 80 inapplicable to 'any pure game of skill i.e., a game predominantly involving skill. However, the Amendment Act deletes the term and to wagering by person taking part in such games of skill from the text of this section. Thus the amended definition of 'gaming' under Section 2(7) to the extent it does not admit the difference between skill games and chance games, is in direct contradiction to the amended Section 176 which intends to maintain such a difference. The very definition of 'gaming' as amended, suffers from the vice of overinclusiveness/over-broadness of the idea of gaming as enacted in the charging provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, nothing in this judgment shall be construed to prevent an appropriate legislation being brought about concerning the subject i.e., Betting gambling in accordance with provisions of the Constitution. 3. A Writ of Mandamus is issued restraining the respondents from interfering with the online gaming business and allied activities of the petitioners. No order as to costs. 2. A careful perusal of the ratio laid down by this Court in All India Gaming Federation s case supra, bearing in mind the well settled principles pertaining to ratio decidendi and the inversion test as held in Career Institutes case supra, will indicate that the judgment of the Hon ble Division Bench of this Court is neither per incuriam nor sub-silentio as contended by the respondents. Only because a specific paragraph in a precedent has not been excerpted by a Court does not mean that a precedent has not been considered in its entirety. By that logic, if the entirety of a precedent-judgment is not excerpted in a subsequent judgment, the subsequent judgment will become automatically sub silentio and perincuriam which is a completely absurd proposition. Thus, it cannot be said that the decision of the Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... twhile Entry 62 of List II which dealt with tax on betting and gambling . By the Constitution (One Hundred and First Amendment) Act, 2016, Entry 62 of List II was amended and the expression betting and gambling was omitted. The purpose of this omission was to subsume taxation on betting and gambling under the GST regime. Consequently, the same expression betting and gambling now features in Entry 6 of Schedule III of the CGST Act. In the case of State of Karnataka vs. State of Meghalaya 2022 SCC Online SC 350 , the Apex Court held that the interpretation of the expression betting and gambling in the context of Entry 34 of List II shall apply to the expression betting and gambling under Entry 62 of List II. As the expression betting and gambling was omitted from Entry 62 to give way for taxation on betting and gambling to be subsumed under the GST regime, the expression betting and gambling in Entry 6 of Schedule III of the CGST Act must also be interpreted in the same manner. 2. Further, the decisions referred to above, in the context of betting and gambling have been interpreted in the context of Entry 34 of List II of the Seventh Schedule to the Constitution and the Public Gambli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions and submissions of the respondents will clearly indicate that the same are an outcome of a vain and futile attempt on the part of the respondents to cherry pick stray sentences from the judgments of various Courts including the Apex Court, this Court and other High Courts and try to build up a non-existent case out of nothing which clearly amounts to splitting hairs and clutching at straws which cannot be countenanced and is impermissible in law. X. CONCLUSIONS There is a distinct difference between games of skill and games of chance; games such as rummy, etc. as was discussed in several decisions above and particularized in the Division Bench decision of this Court in All India Gaming Federation s case supra, whether played online or physical, with or without stakes would be games of skill and test of predominance would apply; the said judgment is a total and complete answer not only to the various contentions urged by the respondents but also covers the issues / questions that arise for consideration in the instant petitions. Though Section 2(17) of the CGST Act recognises even wagering contracts as included in the term business, but that in itself would not mean that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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