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2009 (8) TMI 1242 - HC - VAT and Sales TaxConstitutional validity of the Maharashtra Tax on Lotteries Act, 2006 - levy of sales tax on Lottery tickets - It is the contention of the petitioners that the legislature of State of Maharashtra has no legislative power to enact Laws relating to State Lotteries including Laws relating to taxation, and therefore, according to the petitioners, the State Act is beyond the legislative competence of the legislature of State of Maharashtra. Held that:- Looking to the scheme of the Act, it is clear that Draw is used only as a measure of tax. What is said to be taxed is betting and gambling. From the preamble of the State Act it is clear that levy and collection of tax is on the lotteries (betting and gambling). The tax , as defined under the State legislation, means the tax levied and collected on lotteries. The Act does not levy tax on Draws or sale of tickets, the levy of tax is on betting and gambling which is offered within the State of Maharashtra by organising sale of tickets for participation in the lottery. The measure of levying of tax depends upon as to whether the lottery organised is relating to weekly draw, monthly draw or bumper draw. It is, thus, clear that levying of tax is not on the draw which takes outside the State. The draw is only a measure of tax and the tax is not imposed on the draw itself. Merely because the term Scheme is not defined, the provisions under Section 3 of the Act do not become vague. Whether the exercise of legislative power is colourable? - Held that:- Once we find that there is clear legislative competence in the State legislature to legislate, there is no exercise of power being colorable merely because earlier a particular type of tax was levied which was found to be not legal. So far as the submission that the State Act has been enacted to make the business of selling of lottery tickets of the lotteries organised by the other States unviable is concerned, we find from the petition that there is no material placed in support of this submission, and therefore, it is not possible for us to examine this submission. Petition dismissed.
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