Lack Of Legislative Competence: Kerala HC Declares Kerala Tax On Paper Lotteries Act Unconstitutional [Read Judgment]

The Kerala High Court has declared that the Kerala Tax on Paper Lotteries Act unconstitutional.

The Act dealt with the levy and collection of tax on the conduct of paper lotteries in the State. The Single Bench of the High Court had upheld the validity of the Act by dismissing the writ petition filed by the State of Sikkim.

One of the main contention in the writ appeal was that he subject "lotteries organised by the Government of India or the Government of a State" is within the realm of the legislative competence of the Parliament, and therefore the state has no legislative competence to levy tax on paper lotteries.

The bench comprising Justices CK Abdul Rahim and TV Anilkumar observed that the State of Kerala was lacking legislative competence to impose tax under the impugned Act on state organised lotteries by deriving its source of power from Entry 62 of List II of the Constitution. It also accepted the contention that the Act intended to introduce an indirect taxation on the sale of lottery tickets within the state.

The Court also held that the State of Sikkim will be entitled for refund of the tax paid from the State Government, on their producing proper accounts and proof as to who had ultimately borne the burden.

Appearances: Sr. Adv. S.K. Bagaria assisted by A. Kumar, Sr. Adv Pallav Shishodia, C.E. Unnikrishnan Special Government Pleader (Taxes) 

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