1 vks IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2343 OF 2009 Shri Balaji Marketing .. Petitioners -versus The Commissioner of Small Savings and State Lotteries & ors .. Respondents. Mr. V.V. Tuljapurkar, Senior Counsel, R.D. Soni with V.R. Kasle i/b Ram & Co for the Petitioners Mr. Aspi Chinny, Seniour Counsel with Mr. A. A. Kumbhkoni with Ms Geeta Shastri, AGO for the Respondents CORAM: F. I. REBELLO & J.H. BHATIA, JJ DATED: 17th December, 2009 Oral Order (per F.I. Rebello, J) 1. On behalf of the Petitioners, learned counsel submits that considering the scheme of The Maharashtra Tax on Lotteries Act, 2006, tax can only be collected on the scheme and not on each individual draw of the scheme. It is submitted that the demand for tax on each draw by respondent is illegal and arbitrary. On behalf of the State a preliminary objection is raised that the petition has to be dismissed at the threshold in view of the judgment in N. V. Marketing Pvt. Ltd -vs- State of Maharashtra and others, 2 decided on 14th August, 2009. 2. The petitioners have approached this Court to impugn the notice dated 6.11.2009 by which notice the petitioners were called upon to pay advance tax under the Maharashtra Tax on Lotteries Act, 2006. With regard to the draw of the lottery for the relevant week, it is the case of the petitioners that number of draws are specified under the scheme itself. A scheme can be a weekly lottery scheme, fortnightly lottery scheme, monthly lottery scheme or bumper lottery scheme. In respect of weekly lottery scheme, the scheme has only one draw every week till the scheme is in existence. Similarly in fortnightly and monthly lottery schemes. In case of bumper lottery scheme, there can be six draws per year. According to the petitioners it is settled law well known to the trade that a scheme comprises several draws and that in accordance with the aforesaid Act, more particularly section 3 thereof, tax is levied per scheme and therefore cannot be collected on a draw of the scheme as sought to be done by the respondent. 3. It is submitted that the respondents are reading the word “draw” in section 3 of the said Act while determining the tax by construing each draw as a scheme. Reference is made to the judgment of this Court in Writ Petition No.432 of 2007, N. V. Marketing Pvt. Ltd -vs- State of Maharashtra and others, decided on 14th August, 2009. 3 4. The petitioners state that it had already paid tax under the scheme. The demand made by the respondent on the basis of a draw is contrary to the provisions of the Act and on plain reading of section 3 thereof. 5. On the other hand on behalf of respondents learned counsel submits that the petition is not maintainable as the issue is squarely covered by the judgment of this Court in the case of M/s N. V. Marketing Pvt. Ltd (supra). The learned Counsel, has taken us through the petition, written argument filed by the petitioner and the judgment of this Court. 6. We may first refer to the prayer clauses in the original petition (W.P No.1120 of 2007) which read as under: a) That this Hon’ble Court be pleased to issue a Writ of Certiorari or any other appropriate writ, order or direction in the nature of writ of certiorari thereby quashing and setting aside the impugned enactment being Maharashtra Tax on Lotteries Act, 2006 ( Mah. Act No.XLII of 2006) being ultra vires and violative of the provisions of the Constitution of India. b) That pending the hearing and final disposal of the present petition, the implementation, execution and effect of the impugned enactment viz. The Maharashtra Tax on Lotteries Act, 2006 (Mah. Act. No.XLII of 2006) be stayed 4 and same may not be acted upon. c) That in the alternative, the Respondents be directed to levy tax on the scheme of lottery irrespective of number of draws comprising in a particular scheme and that the Respondents, their officers, servants and agents be restrained from levying and/or collecting tax from the registered promoters as defined in the Act on teach and every draw in a particular scheme as sought to be levied by the Respondents. (emphasis supplied). d) That interim and ad interim reliefs in the terms of prayer clauses(b) and (c) be granted in favour of the Petitioners. 7. In Writ Petition No.1126 of 2007, the petitioners therein had taken a ground which reads as under: “The scheme not being defined under the Act, under dictionary meaning of the scheme and/or the Scheme as interpreted by the respective State as regards its own system has to be accepted and that tax cannot be levied on draw” 8. The written submission filed on behalf of petitioner in that petition on this aspect reads as under: “Assuming that the impugned Act is valid, the Act permits levy on the scheme. Such scheme can cover 5 one or more draws. The impugned Act does not authorize the State to levy tax on each draw under a Scheme. The Government is in fact levying tax on each draw in a scheme which results in multiple taxation and that the same is clearly contrary to the express provisions of the Act. In the absence of any definition of the term “Scheme” the meaning is required to be ascertained by reference to dictionaries and also how the said word is understood and interpreted by the Government of Maharashtra itself. In this connection see paras 11 and 12 of the Affidavit in Rejoinder page 256. Exhibits 1, 2, 3 and 4 of the Affidavit in Rejoinder pages 268 to 271 and Exhibit K to the petition page 145. See State of West Bengal -vs- Kesoram Industries Ltd (2004) 10 SCC 201, 1328 and 389para 138. 9. The learned Division Bench of this Court, after hearing a group of petitions was pleased to hold that the lottery is nothing but a scheme for distribution of prizes by lot or chance and that draw is used only as a measure of tax. We may refer to para 11 of the judgment of this Court in N.V. Marketing Pvt. Ltd’s case which reads thus, “Now so far as the submission that the State Act in 6 fact levies tax on sale of lottery tickets is concerned, in our opinion, this submission also does not have any substance. Looking to the scheme of the Act, it is clear that Draw is used only as a measure of tax. What is said to be taxed is betting and gambling. From the preamble of the State Act it is clear that levy and collection of tax is on the lotteries (betting and gambling). The tax, as defined under the State legislation, means the tax levied and collected on lotteries. The act does not levy tax on Draws or sale of tickets, the levy of tax is on betting and gambling which is offered within the State of Maharashtra by organizing sale of tickets for participation in the lottery. The measure of levying of tax depends upon as to whether the lottery organised is relating to weekly draw, monthly draw, or bumper draw. It is, thus, clear that levying of tax is not on the draw which takes outside the State. The draw is only a measure of tax and the tax is not imposed on the draw itself.” 10. On behalf of petitioner, learned counsel submits that relevant portion in the prayer clause referred to on behalf of respondent was by way of interim relief and not final reliefs. 7 11. The Judgment of this Court is in Appeal before the Hon’ble Supreme Court. Leave has been granted. No Stay has been granted. The question that arises for our consideration is whether the contention by the petitioner that the tax cannot be charged on a draw, but on the scheme is open for consideration. 12. In our opinion though there was no prayer clause by way of final relief, nonetheless the petitioners and the respondents proceeded on the footing that the tax cannot be collected on each draw, but on the scheme. The written submissions of the petitioners are clear. It is true that the present petitioners were not parties to that petition. However, the issue involved in the present petition was considered in the case of M/s N.V. Marketing Pvt. Ltd (supra). From para 11 of that judgment which we have reproduced above, it is clear that what the Court was considering, was an issue with regard to the levy of tax not on draws or sale of tickets, but on betting and gambling and this Court held that the measure of levying tax depends as to whether the lottery organised is relating to weekly draw, monthly draw or bumper draw. The Court further observed that draw is used only as a measure of tax and the tax is not imposed on the draw itself but on betting and gambling. In our opinion considering the averments, the prayer clauses, the written submissions and the findings by this Court the issue was considered and answered. The petition as filed, therefore, would have to be 8 dismissed. 13. Yet another aspect of the matter is that the validity of the section under challenge, before this Court, is now in issue and pending before the Hon’ble Supreme Court. Normally as available grounds to a challenge to the vires of the statute ought to be raised in the same petition. The issue now canvassed will also be an issue for consideration before the Hon’ble Supreme Court as it arises from the judgment in N. V. Marketing Pvt. Ltd (supra). In our opinion, therefore, it will not be possible for us to entertain the petition under the guise that the issue was not an issue in the earlier petition. Once the learned Supreme Court has refused interim relief, the respondent State cannot be precluded from collecting the tax. The tax as finally collected will be subject to the order passed in Appeal arising from the judgment of this Court in N.V. Marketing Pvt. Ltd (supra). It will be open for the petitioners to apply, if advised to intervene in the proceeding before the Hon’ble Supreme Court. 14. With the above observations, the petition stands dismissed. (J.H. BHATIA, J) (F.I. REBELLO)