SC dismissed the review petition of allowing states to tax lotteries of other

The Supreme Court has recently dismissed a review petition of its verdict about a pre-GST tax imposition. It earlier had set aside the HC judgements of not allowing the states to impose a tax on lotteries of other states during the pre-GST regime (before 1st July 2017). 

The Division Benches of the Karnataka and Kerala High Courts had passed judgements. These benches had observed that the state legislatures of Karnataka and Kerala, respectively, do not permit the governments to impose taxes on state-led lotteries conducted by other states, such as Sikkim.

The Supreme Court Bench comprised Mr Justice M. R. Shah and Mrs Justice B.V. Nagarathna. They considered the appeals filed by the state governments of Karnataka, Kerala and a few other states against the HC judgements.

The HC had opined that respective state legislatures do not have any such clause to permit tax imposition for lotteries of other states. The HC further observed that Entry 62 of List II of the Indian Constitution is on betting and gambling activities. These also include lotteries, irrespective of businesses running the same.

The Supreme Court has, after considering the review petition, remarked that there is no mistake apparent on the face of the record to reconsider the impugned order. Hence, after the SC verdict, the Kerala Tax on Paper Lotteries Act, 2005 and the Karnataka Tax on Lotteries Act, 2004, were considered valid.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@clear.in