M/s. Summit Online Trade Solutions Pvt. Ltd., M/s Future Gaming & Hotel Services Pvt. Ltd. & Anr., Pan India Network Ltd. & Anr., Versus Union of India & Ors.
GST
2018 (7) TMI 1635 – SIKKIM HIGH COURT – [2018] 59 G S.T.R. 56 (Sik), 2018 (19) G. S. T. L. 18 (Sikkim)
SIKKIM HIGH COURT – HC
Dated:- 6-6-2018
IA No. 05/2018 in WP (C) No. 38/2017, IA No. 07/2018 in WP (C) No. 36/2017, IA No. 01/2018 in WP (C) No. 59/2017,
GST
MR. BHASKAR RAJ PRADHAN J.
For Petitioner (s) : Mr. A.R. Madhav Rao, Ms. Laxmi Chakraborty and Ms. Manju Rai, Advocates., Mr. Karma Sonam Lhendup, Advocate
For Respondent (s) For R-1 & R-2 : Mr. B.K. Gupta, Advocate.
For R-3 & R-4 : Mr. J.B. Pradhan, Addl. Advocate General with Mr. Karma Thinlay, Sr. Govt. Advocate, Mr. Thinlay Dorjee Bhutia, Govt. Advocate, Mr. S.K. Chettri, Ms. Pollin Rai, Assistant Government Advocates. For R-3 : Ms. Prarthana Ghataney, Advocate
For R-5 & R-6 : None. For R-7 : Mr. Salvador Santosh Rebello and Mr. Ugang Lepch
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ices Tax Act both Central as well as State. The Applicant submits that the notification or order or action of one State cannot be subjected to judicial scrutiny within the jurisdiction of a High Court beyond the territorial jurisdiction of that State more so when no cause of action has arisen within the jurisdiction of that High Court. It is the Applicant's case that as far as challenge to the notification issued by the State of Goa is concerned and charging of the Tax thereunder, the cause of action, if any, has arisen in Goa and thus, the appropriate Court where the notification and the consequential actions if at all can be challenged is the High Court of Bombay at Goa. Consequently, the Applicant submits that this Court would not entertain such a challenge to the notification of the Government of Goa is concerned.
4. The Applicant further states that an identical Writ Petition No. 759/2017 has already been filed before the High Court of Bombay at Goa by one Serenity Trades Private
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se territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibitions, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose
(2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories
(3) Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause (1), without
(a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and
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ndia the power conferred by clause (1) to issue directions, orders or Writs to any Government Authority or person may also be exercised by this Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such powers, nothwithstanding that the seat of such Government or Authority or the residence of such person is not within those territories.
8. Article 246 A of Constitution of India provides:-
“(1) Notwithstanding anything contained in articles 246 and
254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.
(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.
Explanation.-
The provisions of this article, shall, in respect of goods and s
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ikkim” within the State of Sikkim as well as its lottery tickets in the State of Goa.
12. The Petitioner in WP(C) No.59/2017 is the marketing Agent/distributor of State organized online lotteries organized, promoted and conducted by the State of Sikkim and is marketing the State organized online lotteries of the State of Sikkim in the State of Goa.
13. It is the case of the Petitioner in the aforesaid Writ Petitions that the State of Goa having issued the impugned notification under the GGST Act, 2017 to impose tax on the lotteries organized, run and conducted by the State of Sikkim is unconstitutional and illegal.
14. In WP(C) No.36/2017 the State of Goa is Respondent No.9. In the said Writ Petition the following prayers are sought :-
“(a) issue a writ in the nature of mandamus or certiorari or any other writ order or direction to hold and declare that the provisions of Serial No.6 of Schedule III read with Section 7(2) of the Central Goods and Service Act, 2017 and also serial No
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rit in the nature of mandamus or certiorari or any other writ order or direction quashing and setting aside Serial No.228 in Schedule-IV of the impugned Central Notification, impugned IGST Notification and the impugned State Notifications providing for taxation of “Lottery authorized by State Governments” and to further quash, set aside and/or read down S.No.242 in Schedule-II of the impugned Central Notification, impugned IGST Notification and the impugned State Notifications of Respondent Nos.2 to 12 providing for taxation of “Lottery run by State Governments”;
(d) in the further alternative, issue a writ in the nature of mandamus or any other writ order or direction to hold and declare that even if State lotteries are subject to tax, the prize money in a lottery ticket or under the lottery scheme of the State Government cannot be taxed at all and the tax i.e. Central tax and the State tax imposed on State Organized lotteries under the CGST Act, 2017 IGST Act, 2017 and the SGST Act,
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Notification;
(f) in the further alternative, issue a writ in the nature of mandamus or any other writ order or direction to hold and declare that the Respondents shall give credit of Central tax, integrated tax and/or the State tax to the Petitioners in respect of the “unsold lottery tickets” under Section 34 of the CGST Act of 2017, IGST and Section 34 of the SGST Acts, 2017;
(g) in the further alternative, issue a writ in the nature of mandamus or any other writ order or direction to quash and set aside the “impugned GST Notification- Reverse Charge”, impugned IGST Notification – Reverse Charge, and the impugned State Notification – Reverse Charge providing that in case of Lottery supply the Lottery Distributor or selling agent shall be liable to pay tax on reverse charge basis;
(h) pass any other directions/s, relief/s, order/s that may be deemed fit and proper in the circumstances of this case.
(i) all the costs of Writ Petition”
15. In WP(C) No.38/2017 the State of Goa is a
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2017 and the State rate Notifications of the States of Sikkim, Goa, Punjab and Maharashtra to the extent it levies tax on the face value of the lottery ticket without abating the prize money component of the lottery ticket when the said amount never forms part of the income of the Petitioner the lottery trade.
(iv) Pass such other orders that his Hon'ble Court may consider proper in the above case.”
16. In WP(C) No.59/2017 the State of Goa has been arrayed as Respondent No.5 and the Petitioner has sought for the following prayers:-
“(a) issue a writ in the nature of mandamus or certiorari or any other writ order or direction to hold and declare that “lottery” are not “actionable claims” for the purpose of Section 3 of the Transfer of Property Act and assumption and treatment of lotteries as “actionable claims” for the purpose of subjecting lotteries to tax under the GST Act, 2017, IGST Act, 2017 and SGST Act, 2017 is illegal and unconstitutional and beyond the scope and powers of th
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zed Lotteries” as “Lotteries run by State Governments” and/or “Lotteries authorized by State Governments” and recommend and/or levy two different and varying rates on the State Lotteries based on such non-existent classification i.e. 12% and 28% respectively;
(d) in the further alternative, issue a writ in the nature of mandamus or certiorari or any other writ order or direction quashing and setting aside S.No.228 in Schedule-IV of the impugned Central Notification, impugned IGST Notification and the impugned State Notifications providing for taxation of “Lottery authorized by State Governments” and to further quash, set aside and/or read down S.No.242 in Schedule-II of the impugned Central Notification, impugned IGST Notification and the impugned State Notifications of Respondent Nos.2 to 12 providing for taxation of “Lottery run by State Governments”; (e) in the further alternative, issue a writ in the nature of mandamus or any other writ order or direction to hold and declare that
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tickets supplied on the basis of 100/112 in respect of S.No.242 of Schedule II and 100/128 in respect of S.No.228 of Schedule IV of the face value of the lottery ticket and to hold the said fixation under the impugned Central Notification, impugned IGST Notification and impugned State Notification;
(g) in the further alternative, issue a writ in the nature of mandamus or any other writ order or direction to quash and set aside the “impugned GST Notification – Reverse Charge”, impugned IGST Notification -Reverse Charge, and the Impugned State Notification – Reverse Charge providing that in case of Lottery supply the Lottery Distributor or selling agent shall be liable to pay tax on reverse charge basis;
(h) pass any other direction/s, relief/s, order/s that may be deemed fit and proper in the circumstances of this case.
(i) all the costs of Writ Petition.”
17. It is the case of the Petitioners in the Writ Petitions that the State of Goa is also engaged in the business of State organ
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ioners that if the distinction between lotteries run by the State Government and the lotteries authorized by the State Government is made as has been done by the impugned notifications the same would be ex-facie illegal and would be mis-used by the States in order to monopolize the business of lottery by selling its lottery within its own State by classifying and certifying its own lotteries as lotteries run by State Governments whereas on one or several ground stating that the lotteries of the other State as “lotteries authorized by the State Governments” which would wipe out the competition apart from the fact that it would be in violation of the Section 5 of the Lotteries Regulation Act, 1998.
19. Thus it is seen that the Petitioners are aggrieved by not only impugned notification issued by State of Goa under the GGST Act, 2017 but also by the act of the Centre of issuing the impugned notifications under the CGST Act, 2017 as well as the IGST Act, 2017 which seeks to levy Goods and
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notices had been issued by this Court in WP(C) No.36/2017 and WP(C) No.38/2017 on 17.07.2017.
23. The aforesaid I.A (s) were all filed on 27.02.2018.
24. A part of the cause of action for the present Writ Petition having arisen within the jurisdiction of this Court coupled with the fact that the said Writ Petitions WP(C) No. 36/2017 and WP(C) No.38/2017 having been filed prior in time before this Court to the Writ Petition filed by Serenity Trades Private Limited in WP(C) No.759/2017 in the High Court of Bombay at Goa and WP(C) No.59/2017 is being heard together with the said two Writ Petitions this Court is of the view that the aforesaid applications filed in the aforesaid Writ Petitions for deletion of State of Goa from the array of Respondents in the said Writ Petitions are liable to be dismissed.
25. All the aforesaid I.A (s) stands dismissed. Ordered accordingly.
26. The State of Goa may file the counter affidavit, if they desire to do so.
Case laws, Decisions, Judgements
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