Service tax not applicable on distributors of lottery tickets issued by state govt & charge created by Finance Act, 2015 is unconstitutional

Brief of the case:

The Hon’ble Sikkim High Court in the case of Future Gaming & Hotel Services Private Limited and others held that activities of distributors & agents selling lottery tickets cannot be considered as activities for facilitating promotion of lottery tickets issued by state government because there is no principal-agent relationship between the Govt. and distributors, and as such sale of lottery tickets being actionable claims cannot be charged to tax as it not even includible in the definition of service as per Sec 65B(44).

 Facts of the case:

• The petitioner companies were engaged in the business of selling lottery tickets issued by the Government of Sikkim through various agents, stockists, resellers, etc.

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