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P. Muraleedharan vs Union Of India on 30 September, 2008 cites

Sunrise Associates vs Govt. Of Nct Of Delhi & Ors on 28 April, 2006

The Supreme Court has in SUNRISE ASSOCIATES case clearly held that lottery ticket is actionable claim and it is only by virtue of the exclusion clause in the above definition in the Sale of Goods Act it is outside the scope of "goods". So much so, the petitioners' contention that liability for service tax in relation to lottery should be considered by keeping in mind the legal position that lottery tickets are goods, cannot be accepted. The remaining question to be considered is only whether the amendment introduced through the Explanation above stated serve the purpose of introducing tax on service in relation to promotion and marketing of lottery. In this context the main objection raised by the petitioners is that they are not rendering any service in the purchase and sale of lottery tickets. We are unable to accept this contention because admittedly lottery tickets are purchased by the petitioners at discounted price and they in turn sell the same by sharing the discount availed by them to retail dealers. Discount or commission received by the petitioners as well as the retailers for marketing the lottery tickets is nothing but consideration WP(C) Nos.19625/2009 & connected cases -12- for service rendered to the promoter or organiser of the lottery. Obviously without the service rendered by the distributors namely, the petitioners and down line dealers, the lottery tickets will not reach the ultimate customers who are the participants in the draw. So much so, in our view, the whole scheme of the lottery, printing and distribution of tickets and the conduct of draw involve service from various agencies and the most important service rendered by petitioners is as distributors. So much so, we are unable to accept the contention of the petitioners that they are not rendering any service in relation to marketing of lottery. We have already taken note of the fact that for the same transaction of marketing lottery petitioners and others have started remitting service tax at compounded rate under the amended provisions of the Finance Act, 1994 with effect from 1.7.2010. We do not know on what basis the petitioners can contend that prior to the introduction of compounding facility there is no service rendered by them in relation to lottery and after the compounding scheme is introduced, what they are doing involves rendering of service. We are WP(C) Nos.19625/2009 & connected cases -13- also in agreement with the reasoning rendered by the Sikkim High Court in the second judgment above referred for upholding the constitutional validity of the Explanation introduced to Section 65(19)
Supreme Court of India Cites 33 - Cited by 57 - R Pal - Full Document
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