HC upheld Constitutionality of Service Tax on Lottery Ticket Sale activities

1. In the instant petitions, HC concerned with the amendments made in the Finance Act, 1994 by the Finance Act, 2016. The previous Division Benches  have come to a conclusion that no service tax is imposable and leviable on lottery, but we are dealing with the service tax on related activities in distribution and sale of lottery tickets.

2. On gleaning through various amendments made from 2010 onwards, it is evident that the service tax was intended on promotion, marketing, organizing, selling of lottery or facilitating in organizing lottery of any kind, in any other manner. By the impugned amendment a cosmetic change has been made in the Amendment Act, 2010, as initially the words “any person or any other person” was used. In 2015, it was modified to the extent that any activity carried out, for a consideration, in relation to or for facilitation of, a transaction in money except an actionable  claim excluding the activity carried out (a) by a lottery distributor or selling agent in relation to promotion, marketing, organizing, selling of lottery or facilitating in organizing lottery of any kind, in any other manner. The lottery distributor or selling agent is a person appointed or authorized by a State for the purpose of some activities. By the impugned amendment the words “a person appointed or authorized by a State for the purpose of …………………. ” were substituted by the words “by a lottery distributor or selling agent on behalf of the State Government, …………….. “. The substitution does not make substantial changes and the intention remains the same in pith and substance.