2018 (7) TMI 1635 – SIKKIM HIGH COURT – [2018] 59 G S.T.R. 56 (Sik), 2018 (19) G. S. T. L. 18 (Sikkim) – GST on lotteries – Validity of Notifications issued by the State of Goa – seeking deletion of the State of Goa as a party Respondent – distinction between lotteries run by the State Government and the lotteries authorized by the State Government – 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 Services Tax on lotteries organized, promoted and conducted by the State of Sikkim.
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Held that:- It is not the actual incidence of GST under the GGST Act, 2017 which are impugned in the present Writ Petitions but the provisions of law made by the Parliament as well as the respective State Governments including the State of Goa by which it seeks to levy GST on lotteries.
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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 Lepcha, Advocates. For R-4 : Ms. Karma Yangchen Bhutia, Advocate. For R-7 : Mr. Manish Kr. Jain, Advocate. For R-9 : Mr. Salvador Santosh Rebello and Mr. Ugang Lepcha, Advocates. For R-10 : Ms. Babita Rai and Ms. Ranjeeta Kumari, Advocates. For R-5 & 6, R-11 and R-12 : None. O R D E R Pradhan, J. 1. Three Writ Petitions are pending before this Court for adjudication. The present applications filed by the State of Goa under consideration seek the deletion of the State of Goa as a party Respondent in WP(C) No.36/2017, WP(C) No.38/201
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, 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 Limited which has been admitted by the said High Court vide order dated 20.09.2017 and is pending final hearing. 5. The Applicant thus submits that the Petitioner can either challenge the impugned notification issued by the State of Goa by filing a Writ Petition before the High Court of Bombay at Goa or apply for intervention in Writ Petition 759/2017. The challenge to the impugned notification cannot continue before this Court as no cause of action has arisen vis-a-vis the said notification within the jurisdiction of this Court. The A
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er, 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 (b) giving such party an opportunity of being heard, makes an application to the High Court for the vacation of such order and furnishes a copy of such application to the party in whose favour such order has been made or the counsel of such party, the High Court shall dispose of the application within a period of two weeks from the date on which it is received or from the date on which the copy of such application is so furnished, whichever is later, or where the High Court is closed on the last day of that period, before the expiry of the next d
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nd, 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 services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council. 9. The Central Government in exercise of the powers conferred by 246 A of the Constitution of India has enacted the Central Goods and Services Act, (CGST Act) 2017 as well as Integrated Goods and Services Act, (IGST Act) 2017. The State of Sikkim, the Government of Goa as well as some other States have also enacted their respective State Goods and Services Act, 2017. The Government of Goa has also enacted Goa Goods and Services
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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.6 of Schedule III read with Section 7(2) of the States Goods Service Act, 2017 of Respondent Nos. 2 to 11 exempting actionable claims as activities or transactions which shall be treated neither as supply of goods nor a supply of service but not excluding lottery from such exemption is unconstitutional, illegal and non-est as lotteries cannot at all be subjected to tax under the GST Act, 2017, IGST Act, 2017 and SGST Acts, 2017. (b) in the alternative, issue a writ in the nature of mandamus or certiorari or any other writ order or direction to hold and declare that t
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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, 2017 of the Respondents can only be levied only on the face value of the lottery ticket minus the prize money in the scheme under which the State Govt. sells its lotteries through its Distributors/ Selling Agents; (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 the value of the lottery tickets supplied by the States to its Distributor should be the invoice value and /or the transaction value of the actually paid by the Distributor and received by the Respondent No.2 as reflected in the invoice raise
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erse 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 arrayed as Respondent No.7 and the Petitioner has sought for the following prayers:- (i) Set aside the Impugned Notifications 01/2017 Central Tax (Rate), 01/2017 Integrated Tax (Rate), 01/2017, and the State rate Notifications of the States of Sikkim, Goa, Punjab and Maharashtra to the extent it levies differential rates of tax on the supply of Lottery tickets by creating an illusory sub-classification between Lottery run by the State Government as discriminatory and violative of Article 14, 19(1)(g) , 301, 304 of the Constitution of India and of the CGST, SGST and IGST Act, and further hold th
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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 the said GST legislations. (b) Or in the alternative to issue a writ in the nature of mandamus or certiorari or any other writ order or direction to hold and declare and S.No.6 of Schedule III read with Section 7(2) of the Central Goods and Service Act, 2017 and also S.No.6 of Schedule III read with Section 7(2) of the States Goods and Service Act, 2017 of Respondent Nos.2 to 11 exempting actionable claims as activities or transactions which shall be treated neither as supply of goods nor a supply of service but not excluding lottery from such exemption is unconstitutional, illegal and non -est as lotteries cann
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e 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 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, 2017 of the Respondents can only be levied only on the face value of the lottery ticket minus the prize money in the scheme under which the State Govt. sells its lotteries through its Distributors/ Selling Agents; (f) in the further alternative, issue a writ in the nature of mandamus or any other writ order or direction to hold and dec
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butor 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 organized lotteries and has been organizing, conducting and promoting its State organized lotteries and is one of the States in the Union of India where lotteries can be sold. It is the case of the Petitioners that the Petitioners distribute, purchase and sell lotteries and online lotteries both within the State of Sikkim as well as in the State of Goa. It is the case of the Petitioners that the Central Government issued impugned notifications in exercise of the powers conferred by the Sub-section (1) of the Section 9 of the CGST Act, 2017 and similarly identical notifications have also been issued by the State Governments including the St
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tion 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 Services Tax on lotteries organized, promoted and conducted by the State of Sikkim. It is not the actual incidence of GST under the GGST Act, 2017 which are impugned in the present Writ Petitions but the provisions of law made by the Parliament as well as the respective State Governments including the State of Goa by which it seeks to levy GST on lotteries. 20. Perusal of the prayers, as prayed for, in the said three Writ Petitions also makes it evident that at least a part of the cause of action has arisen within the jurisdiction of this Court. 21. WP(C) No.36/2017 was filed on 07.07.2017, WP(C) No.38/2017 was filed on 14.07.2018 and WP
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