|Legal Service India - Can Sales Tax be levied on sale of Lottery Tickets|
|Legal Advice | Find a lawyer | Constitutional law | Judgments | forms | PIL | family law | Cyber Law | Law Forum | Income-Tax | Consumer laws | Company laws|
|Latest Articles | Articles 2013 | Articles 2012 | Articles 2011 | Articles 2010 | Articles 2009 | Articles 2008 | Articles 2007 | Articles 2006 | Articles 2000-05|
At the outset it needs to be stated that the question of levying of sales tax on sale of lottery tickets has been raised time and again. To reach to a definite conclusion it is imperative that we look into the provisions of Constitution in details with regard to the same.
Under the Constitution Separation of powers between the Union (Centre) and its Constituents (that is the States) have been explicitly dealt with in Seventh Schedule whereby the subjects on which the Union and the State can legislate have been segregated. Entry 54 of List II of the Seventh Schedule (which deals with state subjects) read with Article 246(3), the Constitution has empowered the State to make laws with respect to taxes on the sale or purchase of goods other than newspapers subject to the provision of Entry 92A of List I (dealing with Union subjects) whereby the same is not allowed by the State if it involves inter-State trade or commerce. Thus, taxes on sale of goods other than newspapers etc can be levied by the State Governments only.
However, in The State of Madras v. Gannon Dunkerley & Co. the phrase sale of goods became the subject of scrutiny. The expression as defined in Section 4(1) of the Sale of Goods Act, 1930 was given a narrow interpretation as it included only those sales whereby:
1. An agreement was to transfer title,
2. It was supported by consideration and ,
3. An actual transfer of title took place.
To undo this rigor, Clause 29A was added to Article 366 which mentions of six particular transactions which have been included to increase the scope of expression sale of goods.
One of those transactions reads as follows:
(d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration.
The contention that Article 366(29A)(d) involves a sale of goods when a lottery ticket is sold was raised in the case of H.Anraj v, Government of Tamil Nadu (1985).The two Judge Bench while deciding the case held that the lottery ticket involved two kinds of rights viz:
1. Right to participate in lottery draw and
2. Right to win the prize depending on chance (that is a contingent interest in money).
The second right while was a ?chose in action? and hence not goods, the first was a transfer of beneficial interest in moveable goods and hence was liable to be taxed. Therefore, sales tax could be levied on sale of lottery tickets by the State.
However, this decision was challenged in the case of Sunrise Associates v. Government of National Capital Territory of Delhi and others (1999), where it was contended that the Right to purchase a lottery ticket was nothing more than an actionable claim within the meaning of Section 3 of the Transfer of Property Act, 1882 and therefore outside the definition of goods under Sales Tax Acts.
On April 28, 2006 while delivering the judgment settling the issue Justice Ruma Pal and others held that:
1. The distinction drawn in the above mentioned H. Anraj's case was undesirable and
2. That lottery tickets were ?actionable claim? and hence not susceptible to Sale Tax by State.
Hence, in the light of the above discussion it can be stated that the action of Sales Tax authorities against the proceeds from sale of lottery tickets is untenable in law.
Advance Ruling Under Vat Acts
D.E.P.B., Its Taxability - Issues Therein
The author can be reached at: email@example.com / Print This Article
• Know your legal options
• Information about your legal issues
Call us at Ph no: 9650499965
Copyright Registration Online
Right from your Desktop...
*Call us at Ph no: 9891244487
Legal AdviceGet legal advice from Highly qualified lawyers within 48hrs.
with complete solution.
Your Name Your
lawyers in Delhi
lawyers in Chandigarh
lawyers in Allahabad
lawyers in Lucknow
lawyers in Jodhpur
lawyers in Jaipur
lawyers in New Delhi
lawyers in Nashik
Protect your website
lawyers in Mumbai
lawyers in Pune
lawyers in Nagpur
lawyers in Ahmedabad
lawyers in Surat
lawyers in Dimapur
Trademark Registration in India
lawyers in Kolkata
lawyers in Janjgir
lawyers in Rajkot
lawyers in Indore
lawyers in Guwahati
Protect your website
Transfer of Petition
|Lawyers in India - Search by City|
lawyers in Chennai
lawyers in Bangalore
lawyers in Hyderabad
lawyers in Cochin
lawyers in Agra
lawyers in Siliguri
Lawyers in Auckland
lawyers in Dhaka
lawyers in Dubai
lawyers in London
lawyers in New York
lawyers in Toronto
lawyers in Sydney
lawyers in Los Angeles
Cheque bounce laws
Lok Adalat, legal Aid and PIL
About Us |
Juvenile Laws |
Divorce by mutual consent |
| Submit article |
Lawyers Registration |
legal Service India.com is Copyrighted under the Registrar of Copyright Act ( Govt of India) © 2000-2015
ISBN No: 978-81-928510-0-6