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2015 (10) TMI 2756 - HC - VAT and Sales TaxValidity of Rule 3 (11) of the Central Rules - a state, where lotteries are conducted by another state - entitlement of charge an amount of ₹ 2000/- (Rupees two thousand) per draw from the organising state - HELD THAT:- Rule 3(11) of the Lotteries (Regulation) Rules, 2010 is undisputedly a subordinate legislation. These rules have been framed by the Central Government in exercise of the powers conferred by Sub-Section 1 of Section 11 of the of the Lotteries (Regulation) Act, 1998. Contrary to what have been submitted by the Learned Additional Solicitor General, it is not a law framed in terms of Entry 96 of List 1 of the Seventh Schedule to the Constitution of India. Lotteries (Regulation) Act, 1998 admittedly was enacted under entry 40 of List-1 of the Seventh Schedule. Entry 40 of List-1 is one of the entries which empowers the Parliament to legislate and is regulatory in nature. Entries 82-92 in List-1 are taxing provisions by which Parliament may legislate on the subject - Naturally, the Lotteries (Regulation) Act, 1998 having been enacted under the regulatory provision of Entry 40 of List 1, it would not be permissible to levy tax or fees or in other charges or other forms of imposts thereunder. It, therefore, would follow by natural corollary that rules framed under the Lottery (Regulations) Act, 1998 cannot make a provision levying any tax or fees or imposts. In the present case, there are no specific provision in the central Act by which power to impose tax or fees has been provided. Rule 3(11) clearly appears to be in excess of the provisions in the parent Act, and therefore, would be rendered ultra vires the provisions of the Central Act. Rule 3(11) of the Lotteries (Regulation) Rules, 2010 is ultra vires the provision of the Lotteries (Regulation) Act, 1998 and is accordingly struck down - Notification No.380/FIN/ DSSL/431 dated 6.8.2010 issued by the Respondent No. 2 stands hereby quashed as being ultra vires the provisions of the Lotteries (Regulation) Act, 1998. Petition allowed - decided in favor of appellant.
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