C. N. Mithran Vs Union of India (Kerala High Court)
In the case of C. N. Mithran vs. Union of India, the Kerala High Court examined whether the sale of lottery tickets falls within the scope of “auxiliary service” or “taxable service” under Section 65 of the Finance Act, 1994. The petitioner sought a declaration that such sales should not be considered a taxable service as defined under Section 65(105) of the Act. The core issue centered on whether service tax was applicable to the act of selling lottery tickets, a matter which has previously generated legal ambiguity.
During the proceedings, both the petitioner and the government acknowledged that the matter had already been conclusively decided by the Supreme Court in the case of Union of India v. Future Gaming Solutions Pvt. Ltd. ([2025 SCC OnLine SC 289]). In that case, the apex court ruled that the activity of selling lottery tickets does not constitute a service that falls under the category of “auxiliary services” or any other taxable service under the Finance Act. Based on this precedent, the Kerala High Court held that service tax is not applicable to the sale of lottery tickets.
Accordingly, the High Court allowed the writ petition and granted the relief as sought by the petitioner. The ruling reaffirms the position that mere sale of lottery tickets does not amount to rendering a taxable service under the Finance Act and follows the binding interpretation given by the Supreme Court. The decision effectively shields lottery ticket sellers from liability under service tax laws for their sales activities, provided they are not engaged in any additional taxable services outside the scope of ticket distribution.
