16. Since it has been held by the Five Judges Bench of the Supreme Court in State of Bombay v. R. M. D. Chamarbaugwala (supra), that lottery is not trade and commerce, hence it cannot be said that the Lotteries Ordinance is violative of Articles 301 and 303 of the Constitution. Hence we cannot agree with the judgment of the learned single Judge of Gauhati High Court on this point also.
Under Article 11 Parliament is authorized to enact law and it is conceded that the writ petitioner is authorized to enact law and it is conceded that the writ petitioner is not covered by the enactment. It follows that what are called corporate persons are not citizens according to Part II of the Constitution and therefore the writ petitioner cannot claim the benefit of Article 19. I, have, however, weighty judicial pronouncements against my conclusions. One is in State of Bombay v. Chamarbaugwala ), wherein the learned Judges have given the benefit of the article to a corporation subject to its directors and shareholders being citizens of India. But if the corporate personality be different to those of the directors and shareholders, I fail to understand how the latter's being citizens can be treated as relevant.
Therefore if the Mysore Legislature had the
power, which in our opinion, it had and it had
not surrendered its power to Parliament which,
in our opinion, it had not then it cannot be
said that the imposition of the tax is a piece
of colourable legislation and is on that
ground unconstitutional. It will be opposite
to quote at this stage the observations of
Das, C.J., in the State of Bombay v. R.M.D.
Chamarbaugwala (1):-
The alternative argument submitted by Mr. Setalvad based
upon the decision of the Bombay High Court in The
185
State of Bombay v. R.M.D. Chamarbaugwala(1) need not then be
considered in any detail. Chagla, C.J., in delivering the
judgment of the Court relying upon a number of cases which
arose under Art. 3 s. 2 of the Constitution of the United
States of America expressed the view that it was open to the
Court "to tear the corporate veil" and to look behind it and
if all the shareholders of the corporation are found to be
citizens, the corporation should not be denied the
fundamental rights which each of the shareholders has under
"Therefore if the Mysore Legislature had the power, which in our opinion,
it had and it had not surrendered its power to Parliament which, in our
opinion, it had not then it cannot be said that the imposition of the tax
is a piece of colourable legislation and is on that ground
unconstitutional. It will be opposite to quote at this stage the
observations of Das, C. J., in the State of Bombay v. R. M. D.
Chamarbaugwala ( 1957 SCR 874, 929) :-"
39. As far as the submission raised by the petitioners' Counsel with regard to H. Anraj's case-II 1996 (1) SCC 414 is concerned, the Supreme Court did refer to the said case also at paragraph-49 of its judgment and it is only after referring to the decisions reported in AIR 1957 SCC 699 (State of Bombay v. R.M.D. Chamarbaugwala), (State of Haryana v. Suman Enterprises) and several other decisions of the Constitution Bench of the Apex Court, law was laid down as above in B.R. Enterprises's case. Such being the authoritative pronouncement of the Apex Court in the aforesaid decision upholding the entire 1998 Act to be valid and so also Section 5 in particular, being found to be not ultra vires, the constitution question of this Court once again embarking upon the constitutional validity of Section 5 of the 1998 Act or for that matter any of the provisions of 1998 Act, does not arise. It will be improper far all the other Courts not to act upon the law laid down by the Supreme Court.
This Court in State of Bombay v. R.M.D. Chamarbaguwala , upheld the validity of the Bombay Lotteries and Prize Competition Control and Tax Act, 1948 (Bom.LIV of 1948) as amended by the Bombay Lotteries and Prize Competition Control and Tax (Amendment) Act (Bombay Act XXX of 1952). One of the questions raised was whether gambling was business or trade or commerce within the meaning of Article 19(1)(g) of the Constitution or Article 301 thereof. Das, C.J., after considering the various decisions, observed thus:
In this country, the aforesaid were
never accorded recognition of trade, business or
commerce and were always regulated and taxing the
lottery, gambling and betting was with the objective
as noted by the Constitution Bench in the case of
State of Bombay Vs. R.M.D. Chamarbaugwala and Anr.