STATE OF MIZORAM Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THESE matters emanate from the Lotteries (Regulation)Act, 1998, which is hereinafter referred to as the Lotteries Act. The Lotteries act is a Central piece of Legislation. The Lotteries Act confers rule making powers both on the Central Government as also the State Government under section 11 and 12 respectively. State of Tamil Nadu framed Rules in exercise of Powers under Section 12 of the Act, titled Tamil Nadu State Lotteries (Regulation) Rules, 2002. Lotteries were being conducted not only by the State of Tamil Nadu, but by other States too. Rules 3 to 19 relate to the lotteries conducted by the State of Tamil Nadu while Rule 20 pertains to the lotteries conducted by other states, Union Territory or any country having bilateral treaty with India . Rule 20 was the subject matter of writ petitions of the year 2002, on the ground that the restrictions imposed on the conducting of lotteries other than State of Tamil Nadu were not only unreasonable, but also devoid of jurisdiction. Interim orders were passed in the said writ petitions, enabling the agents to purchase the lottery tickets organised and conducted by other states subject to the condition of payment of sales tax in advance and also not indulging in single digit lotteries. Such orders were in force as on 8th January 2003. The date 08th January 2003 assumes significance as the State of Tamil Nad u issued g. O. Ms. No. 20 Home (Courts II) Department dated 08. 01. 2003, prohibiting the sale of all lottery tickets, including the one organised and conducted by the State of Tamil Nadu. Writ petitions of the year 2003 are filed assailing the said Governmental order. Interim Order was passed on 14th January 2003, permitting the sale of the lottery tickets, which were subjected to payment of advance sales tax under section 7 (D) of the Tamil Nadu General Sales Tax Act, giving a time of one week therefor. The matters have been finally heard on 22nd January 2003.

(2.) M/s. G. Masilamani, R. Krishnamurthy, V. T. Gopalan, a. L. Somayaji, R. Gandhi and Mrs. Nalini Chidambaram, the learned Senior Counsel advanced arguments on behalf of the petitioners / appellants, while mr. N. R. Chandran, learned Advocate General appeared for the respondent State. Mr. Palani Selvaraj appeared for the impleading petitioner in support of the governmental action.

(3.) LOTTERIES are not of recent origin. They are age-old but had been consistently viewed as pernicious. Yet, in order to augment revenues, some monarchial Governments as also the democratic ones have been conducting and authorising the business in lotteries. Before the advent of constitution, the Government of India Act, 1935, provided legislative fields both for Centre as also Provinces for enacting the law relating to lotteries and gambling. While Entry 48 of List I enabled the Central Government to enact the law relating to lotteries, Entry 34 of List II conferred legislative power on the States relating to gambling. There was no such law enacted by the Centre but States had enacted the laws. One such law was enacted by the State of Maharashtra , hitherto called Bombay LOTTERIES and Prize Competitions Control and Tax Act, 1948. The validity of the Act was challenged and so also the taxing provisions contained in Section 12-A thereof. The challenge to the Act was upheld by the Bombay High court but, on appeal, the Supreme Court in STATE OF BOMBAY v. R. M. D. CHAMARBAUGWALA (AIR 1957 S. C. 699), popularly called as R. M. D. C. case, reversed the judgement of the Bombay High Court. The above judgment is of the constitutional bench and the issue relating to the nature of trade in lotteries was comprehensively dealt with holding that lottery is a gamble and cannot be regarded as a trade or commerce in common parlance and neither there is any fundamental Right available to a citizen under Article 19 (1) (g) nor a protection under Article 301 of the Indian Constitution. The corresponding legislative fields provided in Indian Constitution are Entry 40 of List I and entry 34 of List II of Schedule 7. Till the year 1997, the Central Government did not make any attempts to enact any law relating to lotteries. The State governments were either enforcing the enacted laws under Entry 34 of List II or acting on the entrustment of powers by the President in exercise of the powers under Article 258 of Indian Constitution.