The Supreme Court of India on March 23 held that a State legislature has the right to impose tax on lotteries conducted by other States within its jurisdiction under Entry 62 of the State List.
- This observation was made by a Bench comprising Justices M.R. Shah and B.V. Nagarathna.
- The judgment came on appeals filed by the Karnataka and Kerala governments against the decisions of their respective High Courts to quash laws enacted by their legislatures to tax lotteries organised and promoted by the States of Nagaland, Arunachal Pradesh, Sikkim, Manipur in Kerala and Karnataka.
Supreme Court observation
- ‘Lotteries’ is a “species of gambling activity”.
- ‘Betting and gambling’ is part of the State List in the Seventh Schedule of the Constitution.
- There is no dispute that lotteries, irrespective of whether it is conducted or organised by the Government of India or the Government of State is ‘betting and gambling.
- Lotteries are within the ambit of ‘betting and gambling’ as appearing in Entry 34 List II.
- Lotteries, except those organized by Govt of India or a Govt of a State covered under Entry 40 List I, come within State subject.
- Entry 40 of List I does not take away the power of States to levy tax on other-state lotteries.
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