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Commissioner of Commercial Taxes and anr. Vs. Shri Dipak Dhar and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax;Constitution
CourtKolkata High Court
Decided On
Case Number F.M.A.T. No. 1417 of 1984
Judge
Reported in[1986]61STC131(Cal)
AppellantCommissioner of Commercial Taxes and anr.
RespondentShri Dipak Dhar and ors.
Appellant Advocate Nara Narayan Gooptu and ; Samarendra Nath Bose, Advs.
Respondent Advocate Debi Prosad Pal, ;A. Roychowdhury and ; Partha Ganguly, Advs.
Cases ReferredKalufam v. Ramdayal
Excerpt:
- m.n. roy, j.1. the main point to be decided in this case is whether sales tax could be levied on lottery tickets and if they are goods within the meaning of section 2(d) of the bengal finance (sales tax) act, 1941 (hereinafter be referred to as the said act), which has denned 'goods' to include all kinds of movable property other than actionable claims, stocks, shares or securities. initially sales tax was neither levied nor imposed on lottery tickets. but after the coming into force of' the constitution (46th amendment) act, the state legislature has promulgated the west bengal taxation laws (second amendment) act, 1984 (hereinafter be referred to as the said 1984 amendment), and thereby, they have sought to levy 20 per centum of such part of the taxable turnover of a dealer as.....
Judgment:

M.N. Roy, J.

1. The main point to be decided in this case is whether sales tax could be levied on lottery tickets and if they are goods within the meaning of Section 2(d) of the Bengal Finance (Sales Tax) Act, 1941 (hereinafter be referred to as the said Act), which has denned 'goods' to include all kinds of movable property other than actionable claims, stocks, shares or securities. Initially sales tax was neither levied nor imposed on lottery tickets. But after the coming into force of' the Constitution (46th Amendment) Act, the State Legislature has promulgated the West Bengal Taxation Laws (Second Amendment) Act, 1984 (hereinafter be referred to as the said 1984 Amendment), and thereby, they have sought to levy 20 per centum of such part of the taxable turnover of a dealer as represents the sale of lottery tickets.

2. On such an application was moved under Article 226 of the Constitution of India amongst others by the respondent Shri Dipak Dhar, stating himself to be the proprietor of M/s. Dhar Agencies, on 27th April, 1984. In the petition the legality and validity of the said 1984 Amendment whereby an amendment of the provisions of the said Act tax has been sought to be levied on the sale of lottery tickets, was challenged and the learned Judge issuing the rule, also granted an interim order of injunction restraining the respondents concerned in the rule from taking any steps and/or proceeding for the purpose of levy, imposition and collection of tax on the sale of lottery tickets under the provisions of Section 5(1)(aa), 6(1)(dd), Section 5(2)(a)(vb) and Section 5(2)(b)(iva) of the said Act, till the disposal of the rule, with liberty to the respondents concerned to apply for variation and/or vacation of the interim order upon notice to the petitioners in the rule. It should also be noted that the learned Judge also made the rule returnable before the Division Bench of this Court under Rule 26 of the Rules of the High Court at Calcutta, relating to application under Article 226 of the Constitution of India. The appeal in question was preferred by the respondents in that rule, against such order of issuing the rule and perhaps the appellants were aggrieved by the interim order as made. It should be noted that such appeal was preferred without approaching the learned Judge or the Division Bench for having the interim order as made, varied, vacated or modified and as such Dr. Pal claimed this appeal should not be entertained. It should be noted that during the pendency of the appeal the appellants filed an application dated 11th May, 1984, asking for vacation, modification or variation of the interim order as made. Since the learned Judge issuing the rule had referred the matter to a Division Bench under Rule 26 as indicated above and this Bench has jurisdiction to hear appeals from judgment and orders made under Article 226 of the Constitution of India, the learned Advocates appearing before us stated that this Bench will have jurisdiction to hear the rule which has been so referred for determination before a Division Bench. Such being the position, with consent of all concerned, we have heard the rule.

3. The original writ petition was moved on behalf of three petitioners and it has stated that petitioner No. 1, Shri Dipak Dhar, carries on a partnership business under the name and style of 'Dhar Agencies' and he also carries on business, inter alia, as agents of various State lotteries, organised by different States including the State of West Bengal. The said petitioner is also stated to be carrying on business as stockists of the various State lotteries which are sponsored and organised by different States other than the State of West Bengal. Petitioner No. 2, M/s. Agrani Enterprises, is also stated to be a registered partnership firm and it has been stated that at all material times, the partners of the said firm were (a) Sri Bhaskar Chatterjee, (b) Smt. Rekha Chatterjee, (c) Smt. Jyotsna Chatterjee, (d) Smt. Bani Chatterjee and (e) Smt. Sahana Chatteijee. That partnership has further been stated to be a registered one and it would appear that they also carry on business, inter alia, as agents of the various State lotteries like petitioner No. 1. Apart from the above, petitioner No. 3(a), (b) and (c) have been stated to be the partners of a firm by the name of 'Annapurna Lottery Agency' and they have also been stated to be carrying on the business as agents of various State lotteries sponsored and organised by the different States including the State of West Bengal. It was the claim and case of the petitioners that State lotteries are sponsored and organised under auspices of various State Governments, who organise and run the State lotteries and sell the lottery tickets to the different agents, who in their turn either sell these tickets to the wholesalers or to the individual customers. It was the case of the petitioners that the agents are allowed a certain percentage of commission on the price of the lottery ticket and normally the percentage which is allowed by the West Bengal State Lotteries is about 25 per cent on the face value of the tickets and some other States allowed 20 per cent commission to the agents on the face value of the tickets.

4. It was the case of the petitioners that the persons who are appointed as authorised agents under the West Bengal State Lotteries, are required to make application for being appointed as such agent and the necessary appointment is made by the Director and/or by the Collector of the district in accordance with rule 7 of the West Bengal State Lottery Rules, 1968 (hereinafter be referred to as the said Rules), which provides as under :

7. (1) The appointment of agents shall be made by the Director and/or by the Collector of the district and it shall be open to the Director or the Collector to terminate the appointment of any agent without assigning any reason. In appointing agents due consideration shall be given to the financial status of the applicant, his ability to promote sale of tickets and any other factor which the Director or the Collector may consider relevant in that behalf.

5. The decision of the Director or the Collector in the matter of appointment of an agent and the termination of his appointment shall be final and binding and no appeal shall be entertained against the decision.

(2) The Director or the Collector shall have the right to restrict the number of agents for a particular area.

(3) The appointment of an agent shall be valid for a period of twelve months from the date of appointment or for a particular draw, whichever is shorter, unless the period is extended by the Director or other appointing authority. The agents shall, on production of the order of appointment, be entitled to purchase tickets from the office of the Director and Treasuries and Sub-Treasuries in the State mentioned in the order of appointment.

(4) The State Government by notification to be published in the Official Gazette, will determine the number of tickets to be contained in each book.

(5) Tickets once sold to the agents shall, under no circumstances, be taken back:

Provided that every agent shall, before selling tickets to the members of the public check the tickets purchased by him from the Director or any Treasury or Sub-Treasury and if any defective ticket is sold to an agent through oversight, such ticket shall be received back by the Director or such Treasury or Sub-Treasury, as the case may be, up to the fifth day after the sale, and the actual price thereof shall be refunded to the agent concerned.

5A. Under no circumstances a defective ticket shall be sold to the members of the public.

6. The agents shall purchase tickets on payment of the full value of the tickets less commission allowable on the value of the tickets.

6. It has also been stated that the persons who are appointed as agents by other different State lotteries are also duly authorised by the respective Governments. These agents, it has been stated, in their turn, sell bulk of their tickets to the wholesalers at a price which is normally less than what is retained by the agents as their commission. To illustrate this it has been indicated that if an agent is allowed 20 per cent commission on the face value of lottery tickets when the agents in their turn selling it to wholesalers, he would normally sell such tickets at Rs. 78 if the face value of the tickets is Rs. 100, thereby incurring a loss of Rs. 2 of the face value of Rs. 100. The petitioners have stated that such loss is expected to be recompensated by the agents, from bonus available to them on the basis of the prize winning tickets, if such tickets were sold by them. The said bonus, according to the petitioners, appropriately comes to 3 per cent of the face value of the tickets and thus it has been stated that, after meeting the loss of Rs. 2, the agents normally retain a sum of Re. 1 when the face value of the tickets is Rs. 100. The petitioners have stated that proportionately the gross profit is also reduced if the face value of the tickets is of lesser denomination. It was also the case of the petitioners that out of the said 1 per cent gross profit, the agents have to incur all the expenses necessary and incidental to carrying on their business. It has further been stated by the petitioners that from the scheme for lotteries as issued it would appear that attractive offers are given to the stockists, agents and sellers by some other authorities like Nagaland State Lotteries, Sikkim State Lottery, Meghalaya Super Weekly Lotteries and other States including the State of West Bengal. It has also been stated that the tickets once sold are not returnable. The price of the tickets according to the petitioners is fixed under defined instructions given by the State lotteries and the stocks of the tickets would be valid up to the date of drawing and thereafter, each of the unsold tickets has no value either in the commercial market or in general. The petitioners have further stated that the conditions for drawing and the prizes to be offered to the claimants are specified in the tickets and one of the conditions are that the tickets are issued subject to the conditions laid down in the State Lottery Rules, as framed by the respective States.

7. It was also the case of the petitioners that under Section 294A of the Indian Penal Code, keeping of lottery office or place for the purpose of drawing any lottery, not being a State lottery or a lottery authorised by the State Government is punishable with imprisonment or with fine or with both and the said section also codify the laws relating to the offence as to the publication of any proposal to pay any sum, or to deliver any goods or to do or forbear from doing anything for the benefit of any person on any event or contingency relating or applicable to the drawing of any ticket, lot, number or figure in any such lottery. The lottery tickets according to the petitioners are issued by the State lotteries or under the authorisation of the State Government publishing the proposal to pay the prizes in the event of drawing, the duplicate to the number is contained in the particular lottery ticket and the date for such draw is also specified in the ticket. Each ticket, the petitioners have stated, issued by the State Government to authorised lottery organiser, contains the conditions for declaration of the prizes in favour of the possessor of the ticket or holding the number as declared for the specified prizes. The petitioners have also given the manner in which such lotteries are drawn.

8. The petitioners have stated that they had learnt from a newspaper report as published in the daily issues of Ananda Bazar Partika on 22nd March, 1984, that the Honourable Finance Minister of the Government of West Bengal, had announced that a tax shall be levied on wholesale dealers of lottery tickets and according to the said statement, such imposition will not affect the persons who are ultimately to purchase such lottery tickets from such wholesale dealers of lottery tickets and the burden of such tickets cannot be shifted to the individual persons, who are ultimately to purchase the said lottery tickets from the wholesale dealers. According to the petitioners, the said Amendment of 1984 was published in the issues of the Calcutta Gazette (Extraordinary), dated 14th March, 1984, together with the statement of objects and reasons and such Bill was brought to amend the said Act. They have stated that in the statement of objects and reasons, the objects of the Bill has been stated to be to amend the said Act for levy of sales tax consequent upon the 46th Amendment of the Constitution and thus to levy tax on sales of lottery tickets at 20 per cent. It has also been stated by the petitioners that along with that other amendments were proposed to be made under the West Bengal Taxation Laws (Second Amendment) Bill, 1984, incorporating Clause (dd) after Clause (d) of Section 6(1) of the said Act. The said Clause (dd) as mentioned hereinbefore lays down that 20 per centum of such part of taxable turnover as represents sales of lottery tickets. The petitioners have further stated that in Clause (aa) of Section 5(1) of the said Act, the words 'and lottery tickets' have been inserted after the word 'gold' and in Sub-clause (vb) of Section 5(2)(a), after the words 'sales of', the words 'lottery tickets' have also been inserted. They have further stated that in Sub-clause (iva) of Section 5(2)(b) of the said Act '20 per cent' is substituted for the words '15 per cent'. The petitioners have further stated that the word 'sale' as defined in clause 2(g) of the said Act has been amended by substituting the word that ' 'sale' would mean any transfer of property in goods for cash or deferred payment or other valuable consideration, and includes:-

(i) any delivery of goods on hire-purchase or any system of payment by instalments, or

(ii) any transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration, or

(iii) any supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration,

and such delivery, transfer or supply of any goods shall be deemed to be a sale of those goods by the person making the delivery, transfer or supply and a purchase of those goods by the person to whom such delivery, transfer or supply is made, but does not include a mortgage, hypothecation, charge or pledge.

9. It was the petitioners' contention that the said 2nd Amendment Bill of 1984 was made into Act which was published in the issues of the Calcutta Gazette (Extraordinary), dated 29th March, 1984, and by that, it has been recorded that the Amendment Bill will come into force on 1st May, 1984, in terms of Notification No. 1020 F.T. dated 29th March, 1984, as issued by the Government of West Bengal, Finance Department, Taxation.

10. It was contended by the petitioners that such levy of tax at 20 per cent on the sale of lottery tickets is not a tax on the sale of goods within the meaning of entry No. 54 of List II of the Seventh Schedule to the Constitution of India, which deals with 'taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I'. The said entry 92A states that taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce and entry 62 of List II of the Seventh Schedule deals with 'taxes on luxuries, including taxes on entertainments, amusements, betting and gambling'.

11. It was the further contention of the petitioners that Article 366 of the Constitution of India defines certain words and expressions used in the Constitution, unless the context otherwise requires and under the 46th Constitution Amendment, as mentioned above, a new Clause (29A) has been inserted in the said article, whereby the expression ' 'tax' on the sale and purchase of goods' has been defined. It was claimed that by such extended definition, certain types of transfers, delivery and supply of goods would come within the purview of ' 'tax' on the sale or purchase of goods' and the said Article 366(29A) provides now that taxes on the sale or purchase of goods would include inter alia amongst others...(d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. The word 'goods', according to the petitioners, as defined in Article 366(12) would include all materials, commodities and articles and they have claimed that the amendment, made under the said amending Act of 1984 is to levy sales tax consequent upon the 46th Amendment and whereby the meaning and import of expression 'tax on the sale or purchase of goods' has been enlarged to include :

(a) a tax on the transfer of property in any goods for valuable consideration;

(b) a tax on the transfer of property in goods involved in the execution of contract;

(c) a tax on the delivery of goods on hire-purchase or any system of payment by instalments;

(d) a tax on the transfer of the right to use any goods for valuable consideration;

(e) a tax on the supply of goods by an association of persons to its members for valuable consideration;

(f) a tax on the supply by way of, or as a part of, any service of goods being food or other article for human consumption or any drink for valuable consideration.

12. The petitioners have further claimed that by such newly inserted Clause (29A) in Article 366 of the Constitution of India the kinds of transfers, deliveries and supplies of goods as mentioned hereinbefore, would be deemed to be sales of those goods and it was their case that even by the inclusive definition of 'sale' appearing in Section 2(g) of the said Act, any transfer of the right to use any goods for any other purpose for cash, deferred payment or other valuable consideration may be treated as a 'sale'. Thus the petitioners have stated that to constitute a 'sale' within the definition of Section 2(g)(ii) of the said Act the transfer must be of the right to use any goods and the same must be for cash, deferred payment or for other valuable consideration. It was claimed by the petitioners that in the case of lottery tickets there is no transfer of the right to use any goods and a 'lottery' in the popular and ordinary meaning would mean an arrangement or a scheme for the distribution of the prizes by chance among the persons purchasing the tickets. In fact, it has been stated that the possessor of a lottery ticket gets a mere right to participate in the draw and by the mere possession of a lottery ticket, he does not acquire an automatic right to use any goods. Thus, on consideration of the nature and character of lottery tickets, the petitioners have stated that it cannot be said that by the sale of such tickets, any right to use any goods is transferred. The petitioners have also referred to the dictionary meaning of the word 'lottery' meaning the competition in which certain tickets drawn at random winning the prizes and the same also means a matter of chance. They have also stated that 'lottery' has been judicially defined as a scheme for distribution of money by chance and the same usually takes the form of the creation of an event by participants in the lottery, who buy tickets against the offer, published for a prize on some contingency and the happening whereof depends on chance. Such a chance, the petitioners have stated, is not a saleable commodity or goods and the same according to them cannot be equated with the contingent sale of future goods. The petitioners have stated that that a transaction of a contingent sale may be a transfer of property in the future goods but such contingent sale of goods cannot be treated as sale in law if the necessary contingency does not come into existence and, in that event, the contract in question will not become operative at all and none of the parties would be bound by such transaction. It was also contended that if there is no crop or yield out of such contingent sale of goods, there would be no delivery whatsoever and a sale of mere chance involves no sale of goods at all.

13. It was further contended by the petitioners that under Section 30 of the Indian Contract Act, 1872, agreements by way of wager are void and no suit would be maintainable for recovering anything alleged to be owned on any wages or entrusted to any person to abide by the result of any game or other uncertain event on which any wager is made. Such wager, the petitioners have stated to be a contract by one person to pay money to another on the happening of a given event in consideration of paying money by another to the person in case such event do not happen. The essence of a wager according to the petitioners is that each side should stand to win or lose according to the uncertain or unascertained event in reference to which the chance or risk is taken. They have also stated that to constitute a wager the transaction between the parties must 'wholly depend on the risk in contemplation' and 'neither must look to anything but to payment of money on the determination of an uncertainty' and, therefore, the essence of gaining and wagering is that one party is to win and other to lose upon a future event, which at the time of the contract is of an uncertain nature.

14. It was the specific case of the petitioners that a lottery is a wagering contract and therefore void even it is authorised by the State. They have also stated that a lottery is not an arbitration and every lottery, which means a distribution of prizes by lot or chance necessarily involves agreement by way of wager between the persons taking part therein. It has further been stated by the petitioners that the purchase of a chance of winning a prize makes a thing a lottery and according to them the words 'sale of goods' or 'agreement by way of wager' are distinct and separate in their legal concepts, character, scope and meaning and there is no scope to equate them for any purposes much less for the purpose of levy of taxes. The agreements by way of wager, according to the petitioners, are kept outside the legislative competence of the State Legislature under entry 64 of List II of the Seventh Schedule to the Constitution of India and, according to them, entry 62 of List II of the said schedule authorises the State Legislature to levy taxes on betting and gambling. The petitioners have further stated that tax on sale of goods cannot be imposed or collected under entry 54 of the schedule, as mentioned above, on the lottery tickets, as they are neither existing goods nor future or unascertained goods within the meaning of the Sale of Goods Act, 1930. The definition appearing in entry 64 of the list and schedule as mentioned above and in Article 366(12) of the Constitution of India do suggest only corporeal properties and according to them if the definition of 'goods' is given a wide definition and unrestricted meaning so as to include the lottery tickets, a logical sequel will have to be conceded in respect of the power to levy sales tax on such things as railway tickets, air tickets and even the postage stamps. The petitioners have stated the power to levy sales tax on such things will have to be found only under the power of Parliament in terms of Article 248 of the Constitution of India and the petitioners have further stated that the impugned notification in the instant case to be unconstitutional and therefore the same should be struck down.

15. According to the petitioners, in sales of lottery tickets, offer is made which is based on the happening of some event, but such sales cannot be said to be made or effected in pursuance of a contract for the sale or purchase of goods or of a contract of supply or purchases of goods by way of or as part of any service done or rendered. They have stated that the transfer of property in goods or delivery thereof thus is a sine qua non to constitute a sale or purchase within the purport, meaning and scope of the Sale of Goods Act, 1930, and sales tax laws. It was further contended by the petitioners that the tickets itself have no value unless the offer is made for future event on which the prizes are declared. They have stated that the price of each ticket is fixed by the State lotteries as well as organisers and the tickets can be sold on prizes as fixed and that too up to the date of drawing, but, after such drawing, neither the tickets can be sold legally nor they can form part of the stock of the business as it has no value in the commercial market. The lottery tickets, according to the petitioners, have got no intrinsic value as such, but the price is paid for such tickets only to enable the possessor of the same, as mentioned earlier, to participate in the draw and the contingency which may arise in the event the participant is a winner of the lottery. The said Act, according to the petitioners, is one to impose a genera] tax on the sale of goods and the tax on the purchase of certain goods under the specified circumstances in West Bengal. It has been stated by the petitioners that the policy and purpose, as deduced from the title of the Act and the preamble of the same, are to impose tax on the sale or purchase of goods in consonance with legislation in respect of matters enumerated in entry 54 of List II of the Seventh Schedule. It has also been stated by the petitioners that goods as defined in Section 2(d) of the said Act with an extended meaning, would include all goods of movable property other than actionable claim, shares or securities and the extended meaning of the word 'goods' as given in Article 366(12) of the Constitution of India would include all materials, commodities and articles. According to the petitioners under Section 2(7) of the Sale of Goods Act, 1930, 'goods' are defined to mean every kind of movable property other than actionable claims and money; and includes stocks and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale. They have stated that the words 'future goods' as defined in Section 2(6) of that Act of 1930, would mean goods to be manufactured or produced or acquired by the seller after the making of the contract of sale and 'specific goods' as defined in Section 2(14) of that Act would mean goods identified and agreed upon at the time of the contract of sale. It has also been stated by the petitioners that actionable claim would mean a claim to any commodity other than a debt secured by mortgage of immovable property or to any beneficial interest in such property which are not in the possession either actual or constructive of the claimants which the civil courts recognise as affording ground for relief, whether such debt be of any existing beneficial interest, accruing on the happening of some conditions or contingent or contingency. The claim of a lottery prize winner, the petitioners have stated to be an actionable one and Section 2(d) of the said Act expressly excludes such actionable claims from the definition of the word 'goods'. They have thus stated that a lottery ticket is nothing but a document evidencing the right of the possessor to participate in the draw and such a document cannot be considered as goods in the sense of the term or in terms of the definition of the 'goods' as appearing therein. A lottery ticket as thus been claimed by the petitioners to be nothing more than a document which either evidences the terms of the betting or the contract between the holder of the tickets and the State Government which evidences the holders' claim to participate in the chance of the lottery and in the event of the number of the ticket held by a person being drawn in the draw, the same confirms on the holder, the right to claim the prize amount as per the contract and in that sense it would be nothing but an actionable claim.

16. The liability to sales tax, according to the petitioners, can arise only if there is a complete and concluded sale under which price is paid or is payable and not when there is only an agreement to sell on the conditions which may happen by chance in future. The expression 'sale of goods', according to the petitioners, as borrowed from the Sale of Goods Act, 1930, would thus be an agreement to sell movables for a price and the property would pass pursuant to that agreement. They have also stated that to constitute a sale, the essential ingredients whereof would be that there should be an agreement between the parties for the purpose of transferring title to the goods, which presupposes capacity to contract and it must also be supported by monetary consideration and over and above, as a result of such transaction, property actually pass in the goods. The petitioners have stated that unless all these elements are present or they do happen, there can be no sale and, in the instant case, no goods as such have been sold nor any property is agreed to be sold. The ticket price fixed on a lottery ticket has been stated by the petitioners to be an entry fee to participate in the drawing for declaring the prizes as published in the tickets being the necessary conditions. It was also their case that the price realised against the tickets cannot be said to be sale price of the tickets inasmuch as lottery ticket has got no value unless the conditions for prices are contained therein which again is to be distributed among the participants upon drawing of the number contained in the ticket. Sale price as mentioned in Section 2(h) of the said Act, according to the petitioners, would mean the amount payable to a dealer as valuable consideration for the sale of any goods, less any amount allowed as cash discount according to ordinary trade practice, but the same includes any sum charged for anything done by the dealer in respect of the goods at the time of or delivery thereof, other than the cost of freight or delivery or the cost of installation when the same is separately charged. In this case, the petitioners have stated that the amount payable by the participants purchasing the tickets from them cannot be said to be the sale of any goods as such the sale of lottery tickets cannot come within the expression of the words 'sale price' as defined in Section 2(h) of the said Act.

17. According to the petitioners, the taxes on sale of goods, is assigned exclusively to the State Legislature under entry 54, List II, of the Seventh Schedule, and such levy of sales tax is a compulsory exaction of money by the concerned Government and there is no quid pro quo in respect of any payment between the taxpayers and the Government. The purchase of a lottery ticket, as indicated earlier, the petitioners have claimed, to be only with the hope and expectation of receiving some special benefit in return and/or in lieu of the price as paid. Thus the cost of a ticket, the petitioners have claimed, to be in the nature of a fee on speculation rather than a base for the levy of sales tax on goods. The imposition of tax on the sale of lottery tickets have been thus claimed to be not a tax on the sale of goods within the meaning of entry 54 of List II of the Seventh Schedule to the Constitution of India. It was claimed by the petitioners that in the case of tax on sales of goods, the taxable event takes place as and when sales are effected and the property in the goods is transferred and, in such case, the liability to tax arises immediately when sales are so effected. Thus the petitioners have further claimed that sale of lottery tickets cannot be said to be sale of goods, but the same is the entry fee, which assures the participants as to the getting of the benefit of prizes by chance. Since there is more than one participant, and therefore, all of them are assured for one chance of getting prize. The petitioners have claimed that the State Legislature has no competence, authority and jurisdiction to levy tax on the sale of lottery tickets under the entry and schedule as mentioned hereinbefore. According to the petitioners the State Legislature has also no power to enact the said 1984 Amendment, as the tax imposed by the same would be a tax in reality on the chance or the future events, which again would be outside the scope and purview of the entry and schedule as mentioned above. Such imposition of tax on the sale of lottery tickets has been claimed to be a colourable piece of legislation, whereby the State Legislature, according to the petitioners, is seeking to tax on the sale of tickets which are not goods and no title can be said to be passed in the goods by such sale and furthermore when the same is not covered by the entry and schedule as indicated hereinbefore. The concerned legislation to levy tax on the sale of lottery tickets, apart from being claimed to be a piece of colourable legislation as indicated above, the petitioners have stated the same to be contrary to and beyond the legislative competence of the State Legislature. In fact, it has been stated that the State Legislature in imposing the concerned tax on lottery tickets has sought to camouflage or clothe the enactments in a garb so as to bring them within the legislative competence and constitutional validity. It was also the case of the petitioners that equating lottery tickets with the goods would also be a colourable piece of legislation and imposition, if any made, would be outside the purview of the entry, list, as mentioned above. Thus, the said 1984 Amendment or the connected legislation has been claimed by the petitioners to be illegal, invalid and inoperative, apart from being beyond the competence of the State Legislature.

18. The petitioners have further stated that sales tax is imposable on the transaction of sale of goods and as, in the instant case, no sale of goods, even under the exclusive definition of Section 2(g) of the said Act as substituted by the said 1984 Amendment is involved in the sale of lottery tickets, such levy of sales tax on the lottery tickets would clearly be illegal and invalid and, as such, the provisions of Sections 5(1)(aa), 5(1)(dd), 5(2)(bb) and 5(2)(iva) of the said Act would be beyond the power and competence of the State Legislature and as such would be ultra vires and inoperative. It was also submitted by the petitioners that the provisions, as mentioned hereinbefore, would further offend Article 19(1)(g) of the Constitution of India inasmuch as the petitioners' fundamental rights to carry on their business as enshrined under the said article has been interfered with unreasonably. It has been stated by the petitioners that they as agents are allowed normally a commission at 20 per cent on the face value of the tickets excepting in the West Bengal State Lotteries, and 25 per cent commission is allowed on the face value of other tickets. They have stated that as agents they have little access to the individual buyers and normally sell the concerned tickets in bulk to the wholesalers and thereafter those tickets as sold reach the ultimate buyers. They have also stated to have to sell normally the lottery tickets in bulk to the wholesalers at a loss of 2 per cent on the face value of the tickets; in other words, the sale of tickets to the wholesalers in bulk at 78 per cent of the face value of tickets, thereby incurring a loss of 2 per cent on the commission allotted to have as agents of the State lotteries. Such loss, the petitioners have of course stated, is expected to be compensated on the off-chance of getting bonus which approximately comes to 3 per cent on the face value of the tickets which win the lotteries. The petitioners have further stated that after adjusting such loss of 2 per cent, only 1 per cent gross profit is retained by them as agents of the various State lotteries out of such retained fund, the .petitioners are also required to meet expenses of carrying on the business and such expenses, according to them, constitute nearly per cent of the face value of the tickets. The petitioners have also stated that if the sales tax at 20 per cent on the face value of the tickets is to be paid by them, then they will not be able to shift the burden of the new imposition of sales tax on lottery tickets to the customers or the individual buyers as the price of the said tickets is fixed by the State Government and no ticket can be sold at a higher price than the amount fixed by the concerned Government. In such circumstances, the petitioners have stated that they will have to pay sales tax at 20 per cent on the value of the lottery tickets, out of the meagre profit of | per cent which may roughly be retained after meeting all expenses and overhead charges. In such circumstances, the petitioners have claimed and stated that the imposition of sales tax on lottery tickets would completely eliminate them from their arena of business of dealing with lottery tickets, which they have been carrying on for many years. Such imposition of sales tax, according to the petitioners, would not only unreasonably interfere with their fundamental rights of carrying on business as mentioned above but would also completely deprive them of their rights to carry on their business, as they would not be in a position to shift the burden of sales tax, which is sought to be imposed on lottery tickets, to other buyers. The imposition of sales tax, according to the petitioners, would also create restrictions and they have further claimed that such restrictions have no rational nexus to the object sought to be achieved by the imposition of such sales tax. In any event, it has been claimed that the sales tax as sought to be imposed now would be harsh, unreasonable, extortionate and confiscatory in character and as such it has been claimed that the sales tax as sought to be imposed should be deemed and declared to be violative of Articles 14 and 19(1)(g) of the Constitution of India.

19. In such view of the fact that no tax on the sale of lottery tickets can be realised from the participants on the price as fixed under the lotteries, even whether the dealers have no income and they suffer a loss, it has been stated that, under the present provisions, if they are allowed to continue, would have to pay the necessary tax by liquidating or selling their business assets and as such also the amended provisions as indicated hereinbefore and more particularly in respect of the levy of tax on the sales of lottery tickets are said to be violative of the articles as mentioned above. The petitioners have stated that, in any event, sales tax being an indirect tax, the incidence of such tax can always be shifted by the sellers to the buyers, in such circumstances, as the seller and buyer may decide and agree upon. Therefore, the petitioners have stated that the seller has always the right to shift the incidence of such sales tax, if he can, to the buyer. The petitioners have also stated that even Section 64A of the Sale of Goods Act, 1930, gives such right to the seller to add the increase in sales tax effected after the contract is entered, into the contract price, viz., if after the contract is entered into, there is any increase in the sales tax, such increase in sales tax can be added to the contract price by reasons of Section 64A of the Sale of Goods Act, |930, and can be recovered from the buyer by the seller. Amended provisions of the said Act, in so far as they lay down that the dealer cannot increase the price of lottery tickets have thus been claimed to have imposed absolute restrictions and prohibition upon the selling dealer to realise from the purchaser, tax payable under the amended provisions of the said Act on the sale of lottery tickets as such, though amendments have been claimed to be inconsistent with and repugnant to Section 64A of the Sale of Goods Act, 1930, as such also the amendments as sought to be incorporated have been claimed to be violative of Article 246(1) of the Constitution of India and thus illegal, inoperative and void.

20. The levy of sales tax on the sale of lottery tickets, the petitioners have further stated, would introduce an unreasonable restriction or complete prohibition in the matter of sale of lottery tickets. Such levy, in so far as other States are concerned, the petitioners have stated, would cause an impediment on the trade and commerce guaranteed under Article 301 of the Constitution of India, in view of the fact that in most of the States, there is no sales tax on the sale of lottery tickets. The imposition of sales tax on the sale of lottery tickets, the petitioners have claimed, would completely eliminate the sub-agents and small agents from the field and that would totally prohibit the trade and occupation of the petitioners. It was also the case of the petitioners that in view of the concerned amendment of the provisions, the business being run by them, the sub-stockists, the sub-agents and other retailers, have become paralysed, as they are unable to collect any tax on the sale of tickets in such circumstances, the petitioners have stated to be incurring substantial and heavy loss in the business. As such also the concerned imposition has further been claimed to be violative of Articles 14 and 19(1)(g) of the Constitution of India. It was also contended by the petitioners that the provisions of the said Act and the concerned Amendment, in so far as they prohibit a dealer from collecting tax from the purchaser, would put an unreasonable restriction upon the fundamental right of the petitioners to carry on trade and commerce guaranteed under Article 19(1)(g) and Article 301 of the Constitution of India. The petitioners have further stated that the concerned tax on the sale of lottery tickets has thus really lost the character of a tax and is squarely and truly imposed upon them by way of confiscatory measure and is not warranted by Article 304 of the Constitution of India.

21. Without necessary service of the writ petition or the rule the answering respondents to the rule have filed their affidavit-in-opposition dated 22nd May, 1984. Such affidavit was filed by Shri Satyandra Nath Ghosh, Commissioner of Commercial Taxes, West Bengal, respondent No. 2. The deponent has stated that the affidavit as indicated herein, was filed on the basis of a copy of petition which was received in the office of the learned Government Pleader and also on the basis of the intimation sent by the learned Advocate for the petitioners.

22. The deponent has stated that the petitioners have no locus standi to move this Court, as they have no genuine grievance against the impugned legislation and more particularly as a result thereof, they will be merely the tax collectors on behalf of the State and not the taxpayers themselves. It has been stated that in terms of the said 1984 Amendment which amended the said Act, sales of lottery tickets would be taxable at 20 per cent with effect from 1st day of May, 1984, and sales tax being an indirect tax, its incidence is passable to the consumers or the purchasers. The deponent has of course agreed that the petitioners are the agents of various State lotteries sponsored and organised by different States including the State of West Bengal and are engaged in the business of selling lottery tickets. It was also his case that the State Government is required to realise sales tax on the sale price and as such would not be interested in the way and the manner in which the petitioners carry on their business, the particulars whereof have been mentioned in the petition of motion. It has been denied by the deponent that the burden of tax on lottery tickets cannot be shifted to the purchasers and the concerned levy and imposition of sales tax on the sale of lottery tickets would not be a tax on the sale of goods within the meaning of entry 54 of List II of the Seventh Schedule.

23. It was his specific case that the imposition of sales tax on the sale of lottery tickets has nothing to do with the 46th Amendment of the Constitution of India, since the power of the State Government to tax sales of goods was always there in the statute. The deponent has further denied that the impugned tax is not a tax on the sale of lottery tickets but the same is licence fee for participating in the draw as claimed. He has also denied that such tax on the sale of lottery tickets is on an actionable claim or is on a wagering contract. He has categorically stated that the tax on the sale of lottery tickets can be imposed and collection under entry 54 of List II of the Seventh Schedule to the Constitution of India as mentioned hereinbefore, can be made.

24. It was also the case of the deponent that a dealer selling goods in West Bengal is liable to pay tax, with effect from the date immediately following the day in which his turnover first exceeds the taxable quantum, on all his sales effected after the relevant date, in terms of the provisions of Section 4 of the said Act as amended by the 1984 Amendment. According to him, the purchase of a lottery ticket, results in transfer of an interest in favour of the purchaser and an element of movable property from the point of view of possession, value and price is always there, which is transferred from the seller of lottery tickets to the buyers thereof. Thus.-lottery tickets, according to him, is very much a movable property coming within the provisions of the Sales Tax Act. He has further stated that a movable property shall mean property of every description, except immovable property and property covers every possible interest which a person can acquire, hold and enjoy. Such being the position, the deponent has also claimed that a lottery ticket is taxable and sales tax has been duly levied on such tickets. The deponent has further denied that the lottery ticket is not 'goods' and the sale thereof does not confer any interest in existing goods. He has further stated that when a lottery ticket is sold, at that point of time, it has a fixed value, and in the course of sale transaction between the seller and buyer, it results in transfer of right in the ticket in favour of the buyer by mutual consent and for consideration. According to the deponent whatever be the ultimate outcome of such bargain, which may be one form of price or in total loss of investment, and whatever speculative element, that may exist, it results in transfer of interest in movable property for value at the time of sale. Thus, a lottery ticket has been claimed to be 'goods' within the meaning of Section 2(d) of the said Act and the sales thereof would constitute 'sale price' as defined in Section 2(h) of the said Act. As indicated earlier the deponent has denied that the price of the lottery ticket is in the nature of a fee on speculation rather than a base for the levy of sales tax on goods. He has emphatically denied the allegation that the concerned tax is a tax on chance or on any future event and the imposition as sought to be made, is a colourable piece of legislation or the same is in violation of the constitutional provisions. The deponent has stated that the imposition of tax on the sale of lottery tickets is a valid piece of legislation and the same is well-covered by the competence and power of the State Legislature in terms of entry 64, List II, of the Seventh Schedule to the Constitution of India.

25. It was also specifically contended by the deponent that the petitioners cannot have any grievance against the levy and imposition of tax on the sale of lottery tickets because it is the consumer or the purchaser who will have to pay the tax and the registered dealers would simply act as agencies for collection of price. In fact, it has been stated that the dealers are agents of the State and nothing precludes them to collect the tax and pass it on to the State. It was also the case of the deponent that those dealers can never be loser after they start collecting the tax and, in any event, if such collection is made by them, the deponent has stated that the dealers would not suffer in (sic). The (sic) in price of 20 per cent per ticket, according to the deponent, is not a binding factor in the business of selling of lottery tickets and such increase, according to him, would not reduce the turnover of the dealers. As such, the deponent has stated that the tax as sought to be levied cannot be claimed to be violative of Articles 14, 19(1)fg), 301 and 304 of the Constitution of India. The deponent has further stated that whenever there is a rise or fixation of tax or duty there may be a monetary bulk in offtake, but very soon, in the process of inflation, the trade picks up and not only establish itself, but achieve even increased turnover and, therefore, imposition of sales tax on an item can never be construed as contravening Articles 301 and 304 as claimed. It was the further grievance of the said deponent that the present proceeding was motivated and designed to delay the process of law which has been introduced for augmentation of trade, revenue and public interest.

26. The rely to the above affidavit-in-opposition was filed through petitioner No. 1, Shri Dipak Dhar, on 30th May, 1984. The deponent of the affidavit-in-reply has stated that the rule and injunction was granted after hearing the learned Advocates of both the sides. He has denied the submissions of the deponent of the affidavit-in-opposition that the petitioners have no locus standi to maintain the concerned petition and none of their rights are involved in the present proceedings. This deponent has further reiterated the handicaps the petitioners have felt and are feeling, as a result of imposition of sales tax on lottery tickets which he also claimed to be unreasonable, irregular, void and inoperative, apart from being without jurisdiction and contrary to the constitutional provisions. He has categorically stated and claimed that such imposition of sales tax to be contrary to law and authority. The deponent has further stated that lottery tickets would not be 'goods' within the meaning of the said Act, and has denied the contentions of the deponent of the affidavit-in-opposition that the imposition of tax on sale of lottery tickets has nothing to do with the 46th Amendment as claimed. It has been stated by him that the imposition of sales tax on the sale of lottery tickets is for the first time made by the amending provisions of the said Act and, in that view of the matter, he has further stated that it cannot be said that the lottery tickets are 'goods' within the meaning of Section 2(d) of the said Act. He has also denied that the tax on sale of lottery tickets is not an actionable claim or is a wagering contract or that such tax can be imposed and collected under entry 54, List II, of the Seventh Schedule to the Constitution of India. He has reiterated that the concerned tax is not a tax on the sale of lottery tickets, but an entry fee for participating in the draw for a chance to win prize as declared by the organiser. He has further referred to Rule 3(1) of the West Bengal State Lottery Rules, 1968 (hereinafter be referred to as the said Rules), which lays down that tickets for every draw of the State lotteries shall be issued in the denomination of rupee 1 only, provided that the Government shall have the power to charge the price of all the tickets for any draw or draws after due publicity before the commencement of the sale of tickets for such draw. According to the deponent, such being the position of the concerned rule as a result of the impugned amendment, the petitioners are not authorised by the State Government to collect more price than the price as declared in terms of the said Rule 3(1). He has also stated that under the said rule, only the Government has power to increase the price of the lottery tickets under the certain conditions as specified and as such there cannot be any way out but to hold, that in case the concerned imposition is allowed, the petitioners would suffer much, as they would not be in a position to increase the price of the tickets.

27. Apart from the pleadings as indicated above, there was an application for vacating the interim order by the respondents in the rule and so also an application for injunction. The affidavits on those applications were also completed and the learned Advocates appearing before us made further reference to such pleadings as appearing from their respective clients' affidavits and applications. In fact, practically nothing new was pleaded through those records than the respective pleadings of the parties as indicated hereinbefore. Such being the position, we are not making any further reference to those pleadings in this determination.

28. The tax as sought to be imposed has been directed to be effective from 1st May, 1984, and that too on amendment of the said Act. On the basis of Notification No. 1020 F. T. dated 29th March, 1984, which is to the following effect:

In exercise of the power conferred by Sub-section (2) of Section 1 of the West Bengal Taxation Laws (Second Amendment) Act, 1984 (West Bengal Act IV of 1984), the Governor is pleased hereby to appoint-

(a) the 1st day of April, 1984, as the date on which the provisions of Sections 1 and 2, Clauses (1) to (3), sub-items (B) and (C) of item (i), items (ii) to (vi) and sub-items (A) and (B) of item (viii) of Sub-clause (a), sub-item (A) of item (i) and sub-item (A) of item (ii) of Sub-clause (b) and Sub-clause (c) of Clause (4) and Clauses (5) to (9) of Section 3 and Sections 4 to 8, and

(b) the 1st day of May, 1984, as the date on which the provisions of sub-item (A) of item (i), item (vii) and sub-item (C) of item (viii) of Sub-clause (a) and sub-item (B) of item (i) and sub-item (B) of item (ii) of Sub-clause (b) of Clause (4) of Section 3, of the said Act shall come into force.

29. In this case, we are concerned with the amendment as sought to be incorporated through item (b) above.

30. The said 1984 Amendment has been enacted in the Thirty-fifth Year of the Republic of India by the Legislature of West Bengal as it was thought expedient to amend the Bengal Amusements Tax Act, 1922 (Bengal Act 5 of 1922), the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act 6 of 1941), the West Bengal Sales Tax Act, 1954 (West Bengal Act 4 of 1954), the West Bengal Primary Education Act, 1973 (West Bengal Act 43 of 1973), the West Bengal Motor Spirit Sales Tax Act, 1974 (West Bengal Act 11 of 1974), the West Bengal Rural Employment and Production Act, 1976 (West Bengal Act 16 of 1976), and the West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979 (West Bengal Act 6 of 1979), for the purposes and in the manner hereinafter appearing.

31. The statement of objects and reasons for having the amendment to the said Act are also quoted hereunder :

(a) to levy sales tax consequent upon the 46th Amendment of the Constitution :-

(1) on transfers of the right to use goods for any purpose and transfers of property in goods (whether as goods or in some other form) involved in the execution of a works contract at the rate of 4 per cent and

(2) on deliveries of goods on hire-purchase at the rate applicable in respect of sale of such goods;

(b) to levy on sales of lottery tickets at the rate of 20 per cent;

(c) to withdraw the benefit of special rate of tax of 3 per cent on sales of tea to registered dealers at auction centres at Calcutta and Siliguri;

(d) to change the exemption limit of sales of cooked food from Rs. 16 to Rs. 10;

(e) to withdraw tax on purchases of goods by the contractors for use in execution of contracts;

(f) to make provisions for levy of a multiple point tax on sales of goods included in Schedule II;

(g) to lower the rate of tax on goods included in Schedule II to 11 per cent; (h) to levy tax at special rates on sales of goods to be specified by the

State Government at 11 per cent or at 1 per cent when such goods are purchased from a registered dealer.

32. We have quoted the statement of objects and reasons behind the concerned incorporations by way of amendment as Dr. Pal advanced his arguments on their basis also. In fact it was Dr. Pal's specific submission that on the basis of the above statement and objects as appropriate to the said Act lottery tickets should not be deemed to be and declared as 'goods'. He also submitted, on a reference to the concerned statement of objects and reasons, that the said Act was sought to be amended either consequent upon the 46th Amendment of the Constitution of India or because of the same and prior thereto, there was no tax on lottery tickets. Such being the position, Dr. Pal contended that we shall have to find out and determine as to what was the legislative intent in having the said 1984 Amendment and also to determine if there is any element of sale in the sale of lottery tickets. It was claimed by Dr. Pal that any transfer of property in goods for cash or deferred payment or other valuable consideration including a transfer of property in goods involved in the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge under the said Act, so all goods would be liable to sales tax but not the lottery tickets as they are neither goods nor a movable property, but means and includes or authorises the holder of the same a right to participate or a chance to win the allotted/declared prize. Such right to participate, according to Dr. Pal, is an actionable claim under Section 2(d) of the said Act, which again is not a sale of goods. Section 3 of the said Act relates to taxing authorities and Section 4 is the charging section. On a reference to those provisions along with Section 2(c) which defines 'dealer' as any person who carried on the business of selling goods in West Bengal and includes the Government, Section 2(d) which defines 'goods' as including all kinds of movable property other than actionable claims, stocks, shares and securities, Section 6 which lays down the rate of tax, which after amendment and by incorporation of Sub-clause (dd) after Section 5(1)(d) now stands at (sic) 20 per centum of such part of dealer's taxable turnover as represents his sales of lottery tickets and Section 7 which deals with registration of dealers. Dr. Pal also wanted to contend that lottery tickets are not goods and as such they would not be liable to sales tax. Dr. Pal also submitted that 'sale' under the said Act means,

any transfer of property in goods for cash or deferred payment or other valuable consideration including a transfer of property in goods involved in the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge.

Explanation 1.-A transfer of goods on hire-purchase or other instalment system of payment shall, notwithstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale;

Explanation 2.-A sale shall be .deemed to take place in West Bengal if the goods are within West Bengal-

(a) in the case of specific or ascertained goods, at the time the contract of sale is made; and

(b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller, whether the assent of the buyer to such appropriation is prior or subsequent to the appropriation :

Provided that where there is a single contract of sale in respect of goods situated in West Bengal as well as in places outside West Bengal, provisions of this Explanation shall apply as if there were a seperate contract of sale in respect of the goods situated in West Bengal,

and contended that under or in terms of the specific definition of 'sale' as aforesaid lottery tickets cannot be included, the more so when on the sale of such ticket there is no transfer of right. As indicated earlier, Dr. Pal restated the fact that prior to 1st May, 1984, no tax was payable on the sale of such a ticket and such imposition has been sought to be made on incorporation of Clause (dd) of Section 6(1) of the said Act, as mentioned above, which according to him is void, irregular, bad, ultra vires and irregular. The stand of the answering respondents was, firstly, that the amendment in question has nothing to do with the 46th Amendment of the Constitution of India; secondly, such power of amendment, they have in terms of entry 54 of List II of the Seventh Schedule to the Constitution; thirdly, lottery tickets are goods and as such, fourthly, sales tax could be levied on them. Dr. Pal of course claimed on a reference to the preamble to the incorporation of the concerned amendment that really the amendment was brought into effect because of the 46th Amendment of the Constitution and that too for the purpose of avoiding the effect of determinations of the Supreme Court on the meaning and import of sale. 'Ticket', according to Webster's New Twentieth Century Dictionary (Second Edition), which was referred to by Dr. Pal, means (1) a note or memorandum, or a slip of paper containing this and (2) a printed card or piece of paper that gives a person a specified right, as to attend a theatre, ride on a train, claim a purchase, etc. The term 'ticket' according to the Shorter Oxford Dictionary, Volume II, to which reference was also made by Dr. Pal, means a slip of evidence of the holder's title to some service or privilege, to which it admits him; as a railway, tram or bus ticket, lottery ticket, etc.

33. The above dictionary meaning of 'ticket' was referred to and relied upon by Dr. Pal for the purpose of establishing the real nature and character of lottery ticket and more particularly for ascribing to the meaning of the same, the particulars whereof have been indicated hereinbefore. Dr. Pal contended that lottery ticket is an actionable claim which means a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in immovable property not in the possession, either actual or constructive, of the claimant, which the civil courts recognise as affording grounds for relief, whether such debt or beneficial interest is existent, accruing, conditional or contingent and such claim creates contractual obligations but without any involvement of transfer of property. To establish the real character of lottery ticket reference was made firstly to the case of Barclay v. Pearson [1893] 2 Ch 164, where the defendant, who was the proprietor of a newspaper, carried on in connection therewith a competition under the following conditions. He published in his paper a paragraph omitting the last word. In the same paper he printed a coupon with a direction that persons wishing to enter the competition must cut out the coupon, fill in the word missing from the paragraph, together with their names and addresses, and send it, with a postal order for Is., to the office of the paper. It was further stated in the paper that the missing word was in the hands of a chartered accountant, enclosed in a sealed envelope; that his statement with regard to it would appear, with the result of the competition, in a subsequent issue of the paper; and that the whole of the money received in entrance fees would be divided equally amongst those competitors who filled in the missing word correctly. In an action by the successful competitors against the defendant and the unsuccessful competitors, seeking administration of the trusts of the moneys in the hands of the defendant for the purposes of the competition, and distribution among the persons entitled thereto. It has been held (1) that the competition constituted a lottery within the meaning of 42 Geo. 3, c. 119, and was illegal; (2) that so far as the money in the hands of the defendant was impressed with any trust, it was one which had arisen out of an illegal transaction, and the court would not render any assistance in its administration; and, semble (3) that notwithstanding the illegality of the competition the competitors had a legal right, enforceable by action at law, to the return of their contributions, at all events, provided that they have notice of their claim before the money had been distributed by the defendant. It should be noted that, as indicated earlier, Dr. Pal specifically contended that participation in a lottery by the purchase of a ticket gives the possessor of the ticket a pleasure and mere chance of success. Secondly, Dr. Pal referred to the determinations in the case of Taylor v. Smetten (1883) 11 QBD 207, where the appellant erected a tent, in which he sold packets, each containing a pound of tea, at 2s., 6d. a packet. In each packet was a coupon entitling the purchaser to a prize, and this was publicly stated by the appellant before the sale, but the purchasers did not know until after the sale what prizes they were entitled to, and the prizes varied in character and value. The tea was good and worth the money paid for it and it has been held that what the appellant did constitute a 'lottery' within the meaning of.

34. In the case of Jaffer Meher Ali v. Budge-Budge Jute Mills Co. ILR (1906) Cal 702, to which reference was made by Dr. Pal, it has been observed that the right to claim the benefit of a contract for the purchase of goods is a 'beneficial interest in moveable property' within the definition of 'actionable claim' in Section 3 of the Transfer of Property Act (4 of 1882), and as such assignable, In that case it has further been indicated that,

the benefit of a contract, that is, the beneficial right or interest of a party under the contract and the right to sue to recover the benefits created thereby are assignable, provided that-

(a) the benefit is not coupled with any liability or obligation that the assignor is bound to discharge and

(b) the contract has not been induced by personal qualifications or considerations as regards the parties to it,

and on such observations, Dr. Pal contended that the benefit due to be derived from a lottery ticket would thus be assignable. The question of assignability of a contract or the law relating thereto has been laid down by the Supreme Court to the effect that an assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well-recognised distinction between these two classes of assignments. As a rule obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in substitution of liabilities. On the other hand, rights under a contract are assignable unless the contract is personal in its nature or the rights are incapable of assignment either under the law or under an agreement between the parties. Apart from observing that there is in law a clear distinction between assignment of rights under a contract by a party who has performed his obligations thereunder, and assignment of a claim for compensation which one party has against the other for breach of contract. The latter is a mere claim for damages which cannot be assigned in law, the former is a benefit under an agreement, which is capable of assignment. The fact therefore that the rights conferred on the sellers under the contract to resell and so forth against the buyer on the latter refusing to accept the documents and thus committing breach of the contract are incapable of assignment does not stand in the way of the sellers assigning their rights to receive the price after they had performed their obligations [in the case of Khardah Company Ltd. v. Raymon & Co. (India) Private Ltd. AIR 1962 SC 1810]. Apart from relying on such determinations Dr. Pal also relied on and referred to the case of Smt. Ashalata Pal v. State of West Bengal : AIR1980Cal262 , where it has been observed that by purchasing the lottery tickets from the Director of State Lotteries the purchaser enters into a contract the terms and conditions whereof are as contained in the 'Lottery Rules'. Those terms and conditions are binding upon the parties to the contract. The State is entering into the contract with the purchasers of tickets upon terms and conditions as contained in the said Rules. The prizes to be declared on the tickets are guaranteed by the Government. Therefore, if there is any violation of any terms and conditions of such contract or of the guarantee then appropriate course for the (sic) the constitutional writ jurisdiction of the court. The purchaser cannot be said to have acquired any right to property for the infringement of which he can invoke the constitutional writ jurisdiction or is entitled to a writ. Case law relied on. It has also been observed in the case of Sir Dorabji Jamshedji Tata, Kt. v. Edward F. Lance AIR 1917 Bom 676 that a contract to purchase a ticket in a lottety though sanctioned by Government is void and that being the position, injunction cannot be granted in support of such void contract. The said determination was made on the basis of the provisions in Section 30 of the Indian Contract Act, which provides that 'agreement by way of wager are void' and also that 'no suit shall be brought for recovering anything alleged to be won on any wager, etc.'- The two portions of the section as indicated above were of course held to be independent. In view of the decisions as above Dr. Pal wanted to argue that the contract as entered through and by and between the purchaser of a lottery ticket and the Government or the organisers of the lottery is a wagering and not a valid contract and as such the same cannot be enforced.

35. The lottery tickets as involved in this proceeding are admittedly sold subject to Rule 3(1) of the said Rules and so far as the West Bengal State Lotteries are concerned, the purchase price of a ticket has been fixed at Re. 1. Dr. Pal also referred to the following :

36. There will be one draw. Tickets are printed in three series. First Prize : Rs. 1,50,000 (in cash or kind including a Premier Padmini Car). Consolation Prizes : 2 : Rs. 1,000 each (for the same number in other two series).

Second Prizes : 6 : Rs. 10,000 each (including at option a scooter).

Third Prizes : Up to 300 : Rs. 1,000 each.

Fourth Prizes: Up to 3,000 : Rs. 100 each.

Fifth Prizes : Up to 3,000 : Rs. 50 each.

37. The claims will have to be submitted within sixty calendar days from the date of draw.

38. The ticket is issued subject to the condition laid down in the West Bengal State Lottery Rules, 1968, as amended from time to time and instructions of the Government of West Bengal. In any case of dispute, the decision of the Director, State Lotteries, Government of West Bengal, will be final and binding. The legal jurisdiction of the lottery shall be at Calcutta only as printed at the reverse of a lottery ticket as sold by the West Bengal State Lottery, for the purpose of establishing the terms and conditions of the contract of sale and also to the following :

1. Rs. 7,000 to agents and Rs. 3,000 to sellers on the First Prize winning ticket.

7 per cent and 3 per cent bonus to agents and sellers respectively for the tickets winning Second and Consolation prizes. No DEDUCTION FROM THE PRIZE

AMOUNT ON THIS ACCOUNT.

2. 3 Special prizes for agents purchasing the highest number of tickets and the two next subject to certain conditions.

3. Up to 300 lucky dips for sellers Rs. 50 each (100 in each series). Seller's prize of Rs. 60 each to sellers of all sold third prize-winning tickets on production of counterfoils, to show and establish the provisions for the agents' and sellers' prizes. It was further stated by him, that under no circumstances, an agent has right or authority to have the price of a lottery ticket increased or varied. Dr. Pal argued that when on the basis of the determinations as indicated above, the contract through the purchase of a lottery ticket, would be a void one under Section 30 of the Indian Contract Act, then nothing is really tranferred by the purchase of such a ticket and by such purchase, no right to use any goods is transferred or entrusted with the purchaser or the possessor of the same.

39. The Bill relating to the said 1984 Amendment shows that 'sale' as denned under the said Act, the particular whereof have been indicated hereinbefore, has been sought to be amended as under:

(a)...

(b)...

(c) ...

(d) in Clause (g),-

(i) for the words beginning with ' 'sale' means' and ending with 'charge or pledge.', the following words shall be substituted:-

' 'Sale' means any transfer of property in goods for cash or deferred payment or other valuable consideration, and includes-

(i) any delivery of goods on hire-purchase or any system of payment by instalments,

(ii) any transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration, or

(iii) any supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred-payment or other valuable consideration,

and such delivery, transfer or supply of any goods shall be deemed to be a sale of those goods by the person making the delivery, transfer or supply and a purchase of those goods by the person to whom such delivery, transfer or supply is made, but does not include a mortgage, hypothecation, charge or pledge.';

(ii) Explanation 1 shall be omitted.

40. According to Dr. Pal the sale of a lottery ticket would not be a sale under the Sale of Goods Act and it was also his specific contentions that a sale of lottery ticket would not be covered by the first and third part of the ingredients of 'sale' as defined and mentioned under the said Act as amended and, if at all, such sale would be covered by the second part of the ingredients of sale. Article 369 of the Constitution gives 'temporary power to Parliament to make laws with respect to certain matters in the State List as if they were matters in in the Concurrent List'. On a reference to the same, Dr. Pal stated that we are thus to find out why the Bill as indicated above or the amendments as sought to be incorporated through the same were introduced. It was restated by him that such amendments to the said Act were incorporated for the purpose of levying tax, consequent upon the 46th Amendment of the Constitution. At this stage a point arose as to whether objects of an amendment can be looked into and in support of his submission, that the objects can be looked into. Dr. Pal firstly referred to the case of Commissioner of Income-tax, Madhya Pradesh and Bhopal v. Sodra Devi : [1957]32ITR615(SC) . In that case, it has been observed that unless there is any ambiguity in the words used in a statute, it is not open to the court to depart from the normal rule of construction which is that the intention of the legislature should be primarily gathered from the words which are used. It is only when the words used are ambiguous that they would stand to be examined and construed in the light of surrounding circumstances and constitutional principles and practice. He secondly referred to the case of Bengal Immunity Co. Ltd. v. State of Bihar : [1955]2SCR603 which is also reported in : [1955]2SCR603 and where it has been observed that,.for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered :

First, what was the common law before the making of the Act; second, what was the mischief and defect for which the common law did not provide; third, what remedy the Parliament hath resolved and appointed to cure the disease; and, fourth, the true reason of the remedy; and then the office of all the Judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and pro privato commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bona publico.

apart from holding that the marginal note to Article 286 is 'Restrictions as to imposition of tax on the sale or purchase of goods', which, unlike the marginal notes in Acts of the British Parliament, is part of the Constitution as passed by the Constituent Assembly, and prima facie, furnishes some clue as to the meaning and purpose of the article. In that case, it has also been held that there are four separate and independent restrictions placed upon the legislative competency of the States to make a law with respect to matters enumerated in entry 54 of List II of the Seventh Schedule. In order to make the ban effective and to leave no loophole the Constitution-makers have considered the different aspects of sales or purchases of goods and placed checks on the legislative power of the States at different angles. Thus, in Clause (1)(a) of Article 286 the question of the situs of a sale or purchase engaged their attention and they forged a fetter on the basis of such situs to cure the mischief of multiple taxation by the States on the basis of the nexus theory, apart from holding further that in Clause (1)(b) they considered sales or purchases from the point of view of our foreign trade and placed a ban on the State taxing power in order to make our foreign trade. free from any interference by the States by way of a tax impost. In Clause (2) they looked at sales or purchases in their inter-State character and imposed another ban in the interest of the freedom of internal trade. Finally, in Clause (3) the Constitution-makers' attention was rivetted on the character and quality of the goods themselves and they placed a fourth restriction on the States' power of imposing tax on sales or purchases of goods declared to' be essential for the life of the community and these several bans may overlap in some cases but in their respective scope and operation they are separate and independent. They deal with different phases of a sale or purchase but, nevertheless, they are distinct and one has nothing to do with and is not dependent on the other or others. The States' legislative power with respect to a sale or purchase may be hit by one or more of these bans. It has further been observed in that case that the opening words of Clause (2), namely, 'Except in so far as Parliament may by law otherwise provide' clearly indicate that the lifting of the ban may be total or partial, that is to say. Parliament may lift the ban wholly and unconditionally or it may lift it to such extent as it may think fit to do and on such terms as it pleases and in exercise of its legislative powers under entry 42 of List I of the Seventh Schedule read with Article 236(2) Parliament may make a law permitting the States to tax inter-State sales or purchases of certain commodities only. Parliament may, by way of regulating inter-State trade or commerce, fix a ceiling rate of tax on sales or purchases of goods which the law made by the States under entry 54 of List II, may not exceed. The third case to which reference was made by Dr. Pal while on the question, as indicated above, was that of S.C. Prashar v. Vasantsen Dwarkadas : [1963]49ITR1(Bom) , where it has been observed that it is indeed true that the statement of objects and reasons for introducing a particular piece of legislation cannot be used for interpreting the legislation if the words used therein are clear enough. But the statement of objects and reasons can be referred to for the purpose of ascertaining the circumstances which led to the legislation in order to find out what was the mischief which the legislation aimed at. From the above determinations, one thing is certain that in case of ambiguity, the objects of a legislation can be looked into.

41. On a reference to the averments in the petition, Dr. Pal then contended that the provisions of Sections 5(1)(aa), 5(1)(dd), 5(2)(a)(vb) and 5(2)(b)(iva) of the said Act are violative of Article 19(1)(g) of the Constitution of India as by incorporation of them the fundamental right of the petitioners to carry on their business, has been sought to be interfered with. The other relevant facts and pleadings as available, have been indicated hereinbefore. Dr. Pal claimed that in this case the petitioners have the factual foundation of such violation as indicated above, which fact was of course denied by Mr. Gooptu, appearing for the answering respondents, ultimately of course Dr. Pal did not place his submissions on Article 19(1)(g) of the Constitution of India, as it was stated on instructions by Mr. Gooptu that the increase on account of the imposition and levy on lottery tickets may be passed on to the retail purchaser or actual purchasers. Such being the position, we are not required in this proceedings to determine and deliberate on the question of infringement of Article 19(1)(g) of the Constitution of India.

42. An unreported judgment dated 1st day of March, 1984, of the High Court of Madras, in the case of S. Nagalingam v. State of Tamil Nadu (W.M.P. Nos. 1680, 1778, 1779, 1825, 1839 and 1897 to 1907 of 1984 in W. P. Nos. 1072, 1128, 1129, 1156, 1163 and 1201 to 1211 of 1984), was produced by both the learned Advocates for the parties. Mr. Gooptu claimed that in view of such determination, it can be safely held and observed that lottery tickets would be 'goods' within the meaning of the said Act as amended the more as when the definition (sic) of 'goods' under the said Act is in effect in pari materiel with the definition of. 'goods' under the concerned Tamil Nadu Act and more particularly when 'goods' under that Act means all kinds of movable property (other than newspapers, actionable claims, stocks and shares and securities) and includes all materials, commodities and articles including the goods (as goods or in some other form) involved in the execution of a works contract or those goods to be used in the fitting out, improvement or repair of movable property and all growing crops, grass or things attached to, or forming part of the land which are agreed to be severed before sale or under the contract of sale. In that case, under Section 59(1) of T. N. Act 1 of 1959, by item No. 163, 'lottery tickets' was added to the First Schedule by the concerned G. O. P. No, 77, Commecial Taxes and Religious Endowments, dated 28th January, 1984. The said Government order was published in the Tamil Nadu Gazette on 28th January, 1984, and the same was proceeded by another notification, whereby earlier Notifications Nos. 75 of 1969, 148 of 1970 and 149 of 1970 were repealed. The exemption of the levy of tax which was so long enjoyed and existed in respect of lottery tickets was revoked by the Government order as referred to above. Thus, sales tax having been levied now on lottery tickets, the writ petitions as indicated hereinbefore, were filed and pending disposal of them, prayers were made for the stay of imposition of the taxes and the point which arose for consideration was whether lottery ticket is 'goods' or not.

43. On the basis of the definition of 'actionable claim' or in respect of Section 3 of the Transfer of Property Act, Section 2(7) of the Sale of Goods Act and Article 366(12) of the Constitution of India wherein 'goods' is defined as including all materials, commodities and articles, which was also the claim in this case, it was contended in that case that no levy of tax could be imposed. In that case, like that of the case before us it was contended that in view of the facts and definition as indicated above, an incorporeal right was involved and checked with gambling element only and nothing more, lottery ticket could not be treated as 'goods' and the more so when the same is not a movable property. In the case of Commissioner of Sales Tax, Madhya Pradesh, Indore v. Madhya Pradesh Electricity Board : [1969]2SCR939 , which case was referred to in the unreported decision of the Madras High Court as indicated hereinbefore, which was also referred by Mr. Gooptu in this case, the Supreme Court has observed that electricity is 'goods' within the meaning of the definition in Section 2(d) of the Act of 1947 and Section 2(g) of the Act of 1958. The term 'movable property' when considered with reference to 'goods' as defined for the purposes of sales tax cannot be taken in a narrow sense and merely because electric energy is not tangible or cannot be moved or touched like, e. g., a piece of wood or a book, it cannot cease to be movable property when it has also the attributes of such property. Electricity is capable of abstraction, consumption and use and it can be transmitted, transferred, delivered, stored, possessed, etc. In the C. P. and Berar Sales Tax Act, which was considered in that case by the Supreme Court, Section 2(d) has defined 'goods' as all kinds of movable property other than actionable claims and includes all materials, articles and commodities, whether or not to be used in the construction, fitting out, improve-

44. The learned Judge in the Madras judgment has also referred to the case of Kttmbakonam Electric Supply Corporation Ltd. v. Joint Commercial Tax Officer [1963] 14 STC 600, wherein it has been observed that electricity is 'goods' for the purposes of Act 1 of 1959, which was in issue in that case, apart from holding that any kind of property which is movable will, therefore, fall within the definition of 'goods', provided the same is transmissible or transferable from hand to hand or capable of delivery, which again need not necessarily be in a tangible or a physical sense. Property, in terms of that determination, would be anything which is of value in a commercial sense and is capable of possession and transfer, which possession or transfer again need not merely be physical. In that Madras judgment, a reference has also been made to the case of A.V. Meiyappan v. Commissioner of Commercial Taxes, Board of Revenue, Madras [1967] 20 STC 116. This case or the determinations therein were referred to and relied on by Mr. Gooptu, in support of his submission that lottery tickets would be 'goods'. In that case 'copyright' has been observed and held to be 'goods'. The Madras High Court, in the case as mentioned above, has held that copyright is incorporeal movable property and the expression 'all kinds of movable property' in the definition of 'goods' in the Madras General Sales Tax Act, 1959, would necessarily take within its sweep even intangible or incorporeal movable property, apart from holding that the expression 'goods' has not been defined in Article 311 of the Constitution of India in an exhaustive manner. It may be that in so far as incorporeal movable property is concerned, there might be difficulties in levying the appropriate tax, such as those contemplated in entry 30, 84 or 89 of List I or entry 51, 62 or 56 of List II of the Seventh Schedule of the Constitution. But that cannot control the definition of 'goods' in any way. Notwithstanding the fact that the expressions employed in defining 'goods' embody only the natural sense of the word, it cannot be held that 'goods' has been restrictively defined in the Constitution to comprise only materials;' commodities and articles, that is to say, concrete goods. Therefore the definition of 'goods' in the Madras General Sales Tax Act, 1959, as meaning all kinds of movable property, does not go beyond the meaning given to that expression in the Constitution and has made a distinction between an exposed film and raw film, holding that an exposed film is in the light of the entries in the First Schedule of the Act 1 of 1959 (Madras General Sales Tax Act) a different article from a raw film. In fact, Mr. Gooptu contended that testing the definition of 'goods' with the terms of the determination in A.V. Meiyappan v. Commissioner of Commercial Taxes, Board of Revenue, Madras [1967] 20 STC 115, lottery tickets should be deemed to be 'goods' under the said Act. Similar to the observations as made in that case, Mr. Gooptu claimed and contended that when a lottery ticket is sold, it has certainly a fixed value and in course of the transaction of sale between the seller and buyer, such sale results in the transfer of absolute rights in the tickets in favour of the buyer and that too by mutual consent and for consideration. Mr. Gooptu also contended that whatever be the ultimate result or outcome of the concerned sale of lottery tickets, viz., a receipt of a prize or the total loss of investment, in fact and really, by such sale of a lottery ticket, there is a transfer of interest in movable property and that too for value and that being the position, a lottery ticket would also come within the definition of 'goods' under the said Act.

45. In the unreported judgment of the Madras High Court as referred to hereinbefore and which is being considered, a further point was urged that sale of outside lottery tickets has steeply dwindled in the State after the concerned Government order and thus, the intention of the State was achieved and as a result thereof Articles 301 and 304 of the Constitution of India have been contravened. The learned Judge in that judgment has also referred to the statements made by the Chief Minister of the State and so also the Finance Minister and to the debate in the Assemby, wherein it has been stated that money in Tamil Nadu flows to other States and therefore, to control sale of outside lottery tickets, the imposition of levy of sales tax on the sale of such tickets was made. In our case there has been no such statement made or defence taken by the answering respondents and as such, we are not concerned with the findings as made by the learned Judge in that judgment, so far this point is concerned. But even then, we feel that if on imposition of levy of sales tax on lottery tickets there is some lull in the business that would be transitional and momentary and ultimately such imposition would have no impact on the legality of the levy as made. Such being the position, even though we are not required to answer the question on the propriety of the levy or imposition of sales tax on the basis of Articles 301 and 304 as indicated above, we feel that the imposition if made or allowed would not make the levy as made in colourable exercise of powers.

46. Like the Tamil Nadu Act hereunder the said Act 'lottery ticket' has not been defined and the learned Judge in that unreported determination of the Madras High Court has referred to the definition of 'lottery ticket' in Section 55(1) of the Betting, Gambling and Lotteries Act, 1963, of England where 'lottery ticket' has been defined as 'any document evidencing the claim of any person to participate in the chances of a lottery'. Such definition in our view has not given any deviated version to the meaning of 'lottery ticket' as mentioned hereinbefore and which was put forward at the Bar. On a reference to Murray's Dictionary and Halsbury's Laws of England, it would appear that 'lottery ticket' is nothing but a scheme for distribution of prizes of lot or chance. It is true that 'lottery ticket' may have many meanings and aspects but, if the possession or the purchase of the same, result in transfer of interest in favour of the purchaser or the same is evidenced and an element of movable property exists, then agreeing with the findings of the learned Judge in that unreported judgment of the Madras High Court, we also feel that 'lottery ticket' would be goods within the meaning of the said Act.

47. This said unreported judgment has also considered whether 'lottery ticket' is also a mode of registering in the lottery scheme or the same is a wagering contract, wherein more than one agree for distribution amongst the successful few or the purchasers of the tickets. Before the learned Judge in that unreported decision it was contended that in a case of 'lottery ticket', a multilateral contract comes into existence between persons more than one, and therefore, the element of sale is totally absent. To establish that, reference was made before the learned Judge in that Madras judgment to Benjamin's Sale of Goods and thus to show that a contract of sale of goods will always be a bilateral one between the seller and a buyer, and if it is unilateral transaction, the same would not be a contract of sale, even though money is paid in return. The learned Judge in that unreported decision has observed that whatever be the devices or methods adopted by trade, and in spite of innumerable parties involved, a definite point can be fixed to constitute the element of sale for the purpose of levy of tax in the case of lottery ticket. We also find no justification in deviating or disagreeing from such determinations as made in the said unreported judgment. We further feel that the decision as made in the case of Kumbakonam Electric Supply Corporation Ltd. v. Joint Commercial Tax Officer [1963] 14 STC 600 and those in the case of Commissioner of Sales Tax, Madhya Pradesh, Indore v. Madhya Pradesh Electricity Board : [1969]2SCR939 can be appropriately and safely applied in the case of lottery tickets and, as such, they, in our view, can be treated and considered as goods under the said Act. It should be noted that Dr. Pal claimed that the said unreported decision of the Madras High Court, which disposed of interim application was not a decision on merits and there was in fact no final decision on the question whether a lottery ticket is an actionable claim and as such, the said determination cannot and should not be looked into or applied in this case. He further claimed that the case of Commissioner of Sales Tax, Madhya Pradesh, Indore v. Madhya Pradsh Electricity Board : [1969]2SCR939 is not applicable in the instant case and the same is distinguishable. In fact, Dr. Pal claimed and contended that the said unreported judgment of the Madras High Court is not really or strictly speaking a decision on the issues as involved, but the same is only an order, whereby neither the rights of the parties nor the point in issue in that case have been finally decided. It was further claimed by him that in the said unreported judgment of the Madras High Court the case of A.V. Meiyappan v. Commissioner of Commercial Taxes, Board of Revenue, Madras [1967] 20 STC 115 was referred to without considering the decision as a whole or what was in fact decided. We feel that it is very difficult for us to agree with such submissions of Dr. Pal or to accept them. We are also not in a position to agree with the submissions of Dr. Pal that the unreported decision of the Madras High Court, as mentioned hereinbefore, is not a decision strictly speaking, but the same is an order as claimed. In this case, we must also keep it on record that Mr. Gooptu contended otherwise than what was claimed by Dr. Pal and in the alternative he further submitted that even if the said unreported judgment of the Madras High Court is found to be not deciding the Us between the parties on merits finally but the same can be looked into and considered for the purpose of finding out the reasons as to why 'lottery ticket' has been held to be goods under the definition of 'goods' under the Tamil Nadu Act, which is in pan materia with the definition of the goods under the said Act. We further feel that the determinations as made by the learned Judge in the said unreported judgment of the Madras High Court can certainly be looked into and applied, while deciding the question whether 'lottery ticket' would be goods and, that too, when the definition of 'goods' under the Tamil Nadu Act and the said Act are in the same line.

48. The submissions of Mr. Gooptu that lottery tickets would be goods under the said Act have been recorded hereinbefore and he further stated that the modus operandi of the business of the selling of lottery tickets by the petitioners would be of no consequence for the purpose of determining the issues as involved in this case. According to him, a dealer selling goods in West Bengal becomes liable to pay tax, with effect from the date immediately following the day in which his turnover first exceeds the taxable quantum, on all his sales effected after that day in terms of Section 4 of the said Act as amended by the West Bengal Taxation Laws (Second Amendment) Act, 1984. He further submitted that the purchase of a lottery ticket results in transfer of interest in favour of the purchaser and an element of movable property from the point of view of possession, value and price is always there which is transferred from the seller of the lottery ticket to the buyer of the same. In such view of the matter, according to him, lottery ticket is very much a movable property coming within the purview of sales tax. He has further claimed that 'lottery ticket' would be 'goods' under the said Act. It has been claimed by him that when the said ticket is sold at that point of time, the same has no doubt a fixed value, and in the course of the sale transaction between the seller and buyer, the same results in transfer of absolute rights in the ticket in favour of the buyer by mutual consent and consideration and whatever be the ultimate outcome of such bargain, may be in one form of prize or in total loss of investment, and whatever be the speculative element, such sale results in transfer of interest in a movable property for value at the time of the sale. Such submissions of Mr. Gooptu were really in the same line as found in the unreported Madras decision as referred to hereinbefore. It was further claimed and contended by Mr. Gooptu that lottery ticket would be 'goods' within the meaning of Section 2(d) of the said Act as amended and sale thereof would constitute 'sale price' as defined in Section 2(h). He has further stated that the State Government has no concern or interest in the scheme or manner under which a particular lottery takes place or is run by any organisation. According to him the price of the lottery ticket is not in the nature of fee on speculation rather the same is a base for the levy of sales tax on goods. He has also contended that the tax as imposed is not a tax on chance or on any future event and such tax as imposed cannot be claimed to be made in colourable use of power or contrary to the competence and power of the State Legislature as given in entry 54, List II, of the Seventh Schedule to the Constitution of India. It was, in fact, claimed by him that the levy and imposition of tax in the instant case has not been done on the basis of the 46th Amendment of the Constitution of India and such levy or imposition of tax has been made in terms of the powers as were and are with the State Government under the said entry 54 as mentioned above. In short, Mr. Gooptu specifically claimed that the levy and imposition of tax, in the instant case, on lottery tickets has been made by the State Legislature on the basis of their independent right under entry 54, List II, of the Seventh Schedule to the Constitution of India. Mr. Gooptu further and categorically claimed that the reference to the 46th Amendment of the Constitution in the statement of objects and reasons for the purpose of having the Bill introduced, referred to Clause (a) only and not to Clauses (b) and (c). All the clauses, as above, have been incorporated in the earlier part of this judgment. As indicated earlier and still we keep it on record that the levy and imposition of sales tax on the lottery ticket was claimed by Mr. Gooptu to be on the basis of the independent power given to the State Legislature under entry 64 of the Constitution of India, as mentioned hereinbefore. He further claimed that by incorporation of Rule 100 after the existing Rule 99 of the Sales Tax Rules exemption with retrospective effect to sale of lottery tickets, so far as levy and imposition of tax is concerned, has been granted up to 30th April, 1984, apart from indicating further that there would be no bar for the seller of a lottery ticket to charge the concerned levy or imposition of sales tax which would be in addition to the price of the concerned ticket from the purchaser and there would also be no bar for such dealer of a lottery ticket to sell tickets on charging local taxes as extra and in fact the State lottery tickets are not being sold at the said rate. Mr. Gooptu contended further that the said Rule 100 has not been challenged. While on the point, reference was made by him to the Government of West Bengal, Finance Department, Taxation Branch, Notification No. 2093-S. T. dated 29th June, 1984. Let a copy of that notification as produced be kept in the record. It should be noted that the present imposition of tax has been made effective from 1st May, 1984. It was Mr. Gooptu's further and specific contentions that lottery ticket is not an actionable claim and according to him the definition of 'goods' under the said Act is inclusive and not exhaustive. The reference as made by him to the cases reported in A.V. Meiyappan v. Commissioner of Commercial Taxes, Board of Revenue, Madras [1967] 20 STC 116 and Commissioner of Sales Tax, Madhya Pradesh, Indore v. Madhya Pradesh Electricity Board [1970] 26 STC 188 (SC) have been mentioned hereinbefore and apart from them he also referred to the case of J.K. Trust, Bombay v. Commissioner of Income-taxi Excess Profits Tax, Bombay [1957] 32 ITR 636 , where it has been observed that 'property' is a term of the widest import, and subject to any limitation or qualification which the context might require, it signifies every possible interest which a person can acquire, hold and enjoy and business would undoubtedly be property, unless there is something to the contrary in the enactment apart from holding that there is nothing in Section 4(3)(i) of the Indian Income-tax Act, 1922, which restricts in any manner the normal and accepted meaning of the word 'property' and excludes business from its connotation. Business would, therefore, be property for the purposes of Section 4(3)(i). The managing agency of a company is business and is 'property' for the purposes of Section 4(3)(i). On the basis of such determinations also, Mr. Gooptu submitted that 'goods' having the same definition either under the said Act or under the Tamil Nadu Act and which made the existence of possible interest of the possessor, 'lottery ticket' must be deemed to be 'goods' and a movable property. Incidentally, he claimed that under the said Act all movables are goods and such being the position, a lottery ticket should also be 'goods'.

49. On the basis of the observation in Smt. Ashalata Pal v. State of West Bengal : AIR1980Cal262 or the holding therein, Dr. Pal restated that 'lottery ticket' is not a property and he further stated that the unreported Madras decision, as indicated hereinbefore, should not also be looked into or considered as there may be appeals taken out from the same. No particulars of such or any appeal from that judgment was produced before us. It was Dr. Pal's further submissions that since the determinations in Joffer Meher Ali v. Budge-Budge Jute Mitts Co. ILR (1906) Cal 702, the definition of 'goods' has not been substantially amended and changed, so on the basis of such decision 'lottery tickets' in this case should not be held, found and observed to be 'goods' under the said Act.

50. The Calcutta decision in Ashalata Pal's case : AIR1980Cal262 has not really defined or determined the character of a lottery ticket, viz., whether the same is 'goods' or not. By that determination, the rule which was obtained against the refusal of claim to award the prize on the ground of failure to produce the original ticket, has been discharged, as it was found that a suit and not a writ proceeding was maintainable as by her claim, the petitioner in the proceedings was found and held to be asking for enforcement of some contractual right. In our view, that judgment correctly decided the point as indicated above and if at all, for infringement of any of the rights as under a 'lottery ticket', the possessor of such a ticket would be entitled to bring appropriate action before the appropriate forum and ask for necessary reliefs. That being our view, we cannot also agree or subscribe to the view that 'lottery ticket' is a wagering contract. We must also keep it on record that Dr. Pal, while on the point on consideration, made reference to the case of Kalufam v. Ramdayal decided by Mr. Stanyan, A. C. I., of the Nagpur Judicial Commissioner's Court in Second Appeal No. 748 of 1908 as reported in (1909) 3 1C 55. That determination was made on 16th April, 1909, in a case where during the pendency of a suit for possession, the parties requested to one 'G' to decide their case by arbitration. 'G' proposed that a lottery might be put and one who obtained the 'winning ticket' should win the subject-matter of the suit. The parties agreed to this. Accordingly a lottery was put and the defendant won the property. On such facts it has been held, (1) that 'G' did not act as an arbitrator; he was no doubt appointed an arbitrator but he did not accept the proposal, instead he made a counter-proposal that the parties should refer the dispute, not to his own judgment, but to chance. An actor or a manager in a lottery is not an arbitrator in any sense, (2) that the result of the lottery was not an arbitration award. The result was not controlled by any opinion of the person conducting the lottery but was merely due to chance, and (3) that the agreement to decide the suit by lottery was void ab initio as being an agreement by way of wagering and being opposed to public policy. The terms of the contract for sale or purchase of such ticket, as framed under the relevant Rules, are printed on the ticket itself and for any infraction of the same or refusal to entertain the claim, unless such refusal is due and bona fide, an action would lie. Such determination we are making even when 'lottery', according to the Concise Dictionary of Law as published by the Oxford University Press, means a game of chance in which the participants buy numbered tickets and the prizes are distributed by drawing lots and it has been observed that lotteries are usually illegal unless they are (1) on behalf of registered charities or sports, (2) restricted to members of a private club, (3) run by a local authority and registered with the Gaming Board or (4) small lotteries that take place as part of an entertainment (e. g., in a bazar or at a dance), and 'gambling' according to that dictionary means amongst others playing a game in order to win money or anything else of value, when winning depends on luck. Such usual meaning of 'lottery', in our view, cannot also be ordinarily applicable in cases of lotteries as in this case, as they are held under a statute and the Rules as framed thereunder, which in this case would mean the said rule. It must also be noted that even though the holding of a lottery ticket for the chance of winning a prize is opposed to public policy but people often for such chance opt today and they are opting for the same without any reservation-and more particularly in respect of lotteries as involved in this case.

51. We are further of the view and for consideration of the submissions, as indicated hereinbefore, that the observations in the unreported Madras judgment, the particulars whereof have been stated hereinbefore, can be looked into and the tests as laid down therein in so far as the character of the 'lottery tickets', which in our view are also appropriate, can also be applied in this case, the more so when the definition of 'goods' under the Tamil Nadu Act and the said Act are substantially the same. We further hold that the incorporation of the amendment to the said Act and-the levy and imposition of sales tax on 'lottery tickets' have been made by the State Legislature in exercise of their independent right under the Constitution of India and as such, these incorporations cannot be said to be void, illegal, ultra vires or made in excess of powers or in colourable exercise of the same. We further keep it on record that the question of violation of Article 19(1)(g) has not been determined by us on the basis of concession as indicated hereinbefore and as made by Mr. Gooptu. 'Lottery tickets', in terms of the determinations as cited at the Bar and the tests as laid down therein, should thus be deemed to be 'goods' in terms of the definition of 'goods' as in Section 2(d) of the said Act, as amended, and so the imposition and levy of sales tax on them, in our view, must be upheld.

52. The rule which was referred for determination before the Division Bench, thus fails and the same is discharged. There will however be no order as to costs.

53. In view of the above the appeal is also disposed of without entering into the respective contentions and submissions including submissions regarding the maintainability of the same.

54. The oral prayer for a certificate under Article 133 of the Constitution is refused, as we are of the view, that no substantial question of law as to the interpretation of the Constitution or any important point is involved in this case, which is required to be decided by the Supreme Court.

55. On compliance with the necessary formalities, the office is requested to make available the certified copy of the judgment at an early date.

Amarendra Chandra Sen Gupta, J.

56. I agree.


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