new Delhi. The Supreme Court on Wednesday said that state legislatures are competent to levy tax on lotteries run by other state governments or the central government in their areas. Justice MR. Shah and Justice B.V. Nagarathna said that the subject ‘betting and gambling’ in entry 34 of List II is a State subject. It is now clear that lotteries are a type of gambling activity and therefore lotteries fall under the purview of ‘betting and gambling’, as shown in entry 34 Listing 2.
“If lotteries are conducted by private parties or agencies authorized by the Government of India or the Government of any State, it is covered by entry 34 of List II.”
The top court upheld the validity of laws passed by Karnataka and Kerala to tax the lotteries of other state governments.
Justice Nagarathna, who wrote the judgment on behalf of the bench, observed that the Karnataka and Kerala governments can levy tax on lotteries conducted by other state governments, as the court allowed appeals by Karnataka and Kerala challenging the decisions of their respective high courts. .
The high courts had held that the state governments could not tax the lotteries run by other northeastern states like Nagaland, Arunachal Pradesh, Meghalaya, Sikkim and ordered them to refund the money.
In its 122-page judgment, the top court said, “The Division Benches of the High Courts were not right to hold that the Legislatures have no power to levy tax on lotteries conducted by the Government of India or the Government of any State and only Parliament can do so.” can put.”
Both the Karnataka and Kerala governments relied on the Karnataka Tax on Lotteries Act, 2004 and the Kerala Tax on Paper Lotteries Act, 2005 for levying the tax.
The Karnataka government’s counsel argued that the tax under consideration is a tax on gambling which can be found in entry 62 of List 2 of the Constitution. Kerala also adopted the same submission.
The top court said that the state legislatures have the power to tax lotteries under entry 62 of List 2, as the taxation under that entry is on ‘betting and gambling’ activities, including lotteries, irrespective of the institution operating it. Do you do
“The legislature of the States of Karnataka and Kerala was fully competent to enforce and tax the Acts imposed on the activity of ‘betting and gambling’ organized and conducted in the respective States, including lotteries conducted by the Government of India.
The bench said that under the Acts of Karnataka and Kerala there are clear provisions for the registration of agents or promoters of the respective state governments for the conduct of lottery schemes there. “This in itself indicates a substantial regional nexus between the responsible states, which are conducting the lotteries, and the states of Karnataka and Kerala,” it said.
—AnyTV News
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