TMI Blog2007 (8) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the letter. However, such appearance is directed towards ultimate levy of tax under the Lotteries (Regulation) Act, 1998 No. 17 of 1998, a Central Act, read with the Service Tax provisions which find place in Chapter V of the Finance Act, 1994 and Chapter VA of the Finance Act, 2003. 2. The writ petitioner accordingly has presented this writ petition to nip the whole process in the bud, and has asked for an interim order staying all further proceedings. 3. The writ petitioner has been in business from 1998 and has been purchasing Sikkim Lottery tickets in bulk. 4. A very important fact about the purchase if not mentioned or even hinted at in the petition at all, and this is, that the purchase of the lottery tickets is ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate. As such, once the purchase of tickets is complete and the tickets become the property of the writ petitioner fully and in their entirety, no question arises of any promotion or marketing of any goods produced or provided by the State Government still less of marketing any goods belonging to the State Government. 9. Accordingly, the root of the service tax incidence, which is the said sub-section 19 disappears and service tax cannot be levied because no service could be provided by anybody who is dealing with goods which are fully owned by and fully belong to that person itself. 10. The impugned letter, above referred to, adopts the line of reasoning, that the sale of lottery tickets being prohibited except by the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the first sale of goods itself arises because the writ petitioner is purchasing the goods itself and not providing for any service in relation to the first purchase of goods from the State by a third party. 16. The issue is whether purchasing at Rs. 70/- goods which are of the face value of Rs. 100/-, and can be sold in the market for that face value, is itself a promotional or marketing service. The contract between a principal producer and its large distributor or promotional distributor can have a lot of flexibility. It will all depend on the business negotiations by the two parties, as to whether the goods are being taken by the distributor as an agent, and retained as such, or whether the goods will be purchased outright by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed today without hearing parties fully. 19. I am of the opinion that on a balance of circumstances it appears that the essence of the writ petitioner's business venture is that of a middleman, and if it is a middleman's venture, then the activity, properly so called, cannot but be promotion or marketing. 20. Order and observations, however worded, are without prejudice to the rights and contentions of the parties. There will be no interim order. Appearance of parties before the Department will take place and decision might be given and even levy might be made. However, decisions given or levies made or moneys paid or receipts given will ultimately abide by the result of the writ Since both the parties are also solvent, no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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