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2013 (11) TMI 1002 - HC - Service TaxConstitutional validity of levy of service tax on “promotion, marketing, organising or in any other manner assisting in organising game of chance, including lottery - Held that:- the activities of the lottery distributors i.e. the petitioners herein do not constitute a service and thus beyond the purview of “taxable service” as statutorily defined under clause (zzzzn) of sub-section 105 of Section 65 of the Finance Act, 1994 as amended vide Finance Act, 2010. The activity of promotion, marketing, organizing or in any other manner assisting in organizing game of chance including lottery is an activity included in the expression “betting and gambling” as incorporated under Entry 34 and 62 of List II to Seventh Schedule of Constitution of India. (iii) The activity of promotion, marketing, organizing or in any other manner assisting in organizing game of chance including lottery being an activity of “betting and gambling” under Entry 62, List II to Seventh Schedule of Constitution of India, the State Legislature alone is competent to levy any tax on such activity under Entry 62. The Parliament has the competence and jurisdiction to levy taxes on any subject matter including “service tax” under Entry 97, List I, read with Article 248 of the Constitution of India except where such powers are traceable to any of the entries in List II and III to Seventh Schedule of Constitution of India. Power to tax the activity of “betting and gambling” as explained above being within the exclusive domain of State Legislature under Entry 62, List II, the Parliament in exercise of its residuary power under Entry 97, List I to Seventh Schedule of Constitution of India lacks legislative competence to impose any tax including “service tax” on such activity. Clause (zzzzn) to sub-section 105 of Section 65 of Finance Act, 1994 strike down as unconstitutional - Decided in favor of assessee.
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