2020 Supreme(SC) 689

SUPREME COURT OF INDIA
Ashok Bhushan, R.Subhash Reddy, M.R. Shah, JJ.
Skill Lotto Solutions Pvt. Ltd. – Petitioner
Versus
Union Of India & Ors. – Respondents
Writ Petition (Civil) No.961 Of 2018
Decided On : 03-12-2020

IMPORTANT POINTS
(1) Writ petition alleging violation of Article 14 specially with respect to a parliamentary Act can very well be entertained under Article 32.
(2) Inclusion of actionable claim in definition “goods” as given in Section 2(52) of Central Goods and Services Tax Act, 2017 is not contrary to legal meaning of goods and is neither illegal nor unconstitutional.
(3) Levy of Central Goods and Services Tax on lotteries – Lottery is actionable claim. Actionable claims are goods.

Headnote:

(A) Constitution of India – Article 32 – Writ Petition – Maintainability – Writ petition alleging violation of Article 14 specially with respect to a parliamentary Act can very well be entertained under Article 32 – Article 32 confers a right to move to Supreme Court for enforcement of right conferred by Part III, which is guaranteed by sub-article (1) of Article 32 of Constitution – Article 32 is an important and integral part of basic structure of Constitution. Article 32 is meant to ensure observance of rule of law – Article 32 provides for enforcement of fundamental rights which is most potent weapon. (Paras 14 and 16)

(B) Sale of Goods Act, 1930 – Section 2(7) – Central Goods and Services Tax Act, 2017 – Section 2(52) – Constitution of India – Articles 246A and 366(12) – Legal meaning of goods – Whether actionable claim can also be a part of goods – Inclusion of actionable claim in definition “goods” as given in Section 2(52) of Central Goods and Services Tax Act, 2017 is not contrary to legal meaning of goods and is neither illegal nor unconstitutional – Definition of goods as occurring in Article 366(12) is inclusive definition and does not specifically excludes actionable claim from its definition – Whenever inclusive definition is given of an expression it always intended to enlarge meaning of words or phrases, used in definition – When Parliament has been conferred power to make law with respect to goods and services, legislative power of Parliament is plenary – Constitution framers were well aware of definition of goods as occurring in Sale of Goods Act, 1930 when Constitution was enforced – By providing an inclusive definition of goods in Article 366(12), Constitution framers never intended to give any restrictive meaning of goods – Definition of goods under Section 2(52) of Act,2017 does not violate any constitutional provision nor it is in conflict with definition of goods given under Article 366(12). (Paras 33, 34, 49 and 61)

(C) Central Goods and Services Tax Act, 2017 – Section 2(52) – Constitution of India – Articles 14, 19(1)(g), 301 and 304 – Levy of tax on lotteries – Lottery is actionable claim – Actionable claims are goods – There has to be a rational connection between item taxed but with regard to taxing policy of legislature, Courts have very limited role to play – When Act, 2017 defines goods to include actionable claims and included only three categories of actionable claims, i.e., lottery, betting and gambling for purposes of levy of GST, it cannot be said that there was no rationale for including these three actionable claims for tax purposes – It is a duty of State to strive to promote welfare of people by securing and protecting, as effectively as it may, a social order in which justice, social, economic and political, shall inform all institutions of national life – Value of taxable supply is a matter of statutory regulation and when value is to be transaction value which is to be determined as per Section 15 it is not permissible to compute value of taxable supply by excluding prize which has been contemplated in statutory scheme – Petitioner is not entitled to reliefs as claimed in writ petition – When levy of GST, determination of taxable val ue are governed by Parliamentary Act in this country, legislative scheme of other countries may not be relevant for determining the issue which has been raised here – Taxing policy and taxing statute of various countries are different which are in accordance with taxing regime suitable and applicable in different countries. (Paras 48, 57, 59, 70, 71, 80, 81 and 82)

Facts of the case:

Petitioner, an authorized agent, for sale and distribution of lotteries organized by State of Punjab has filed this writ petition impugning definition of goods under Section 2(52) of Central Goods and Services Tax Act, 2017 and consequential notifications to the extent it levies tax on lotteries. The petitioner seeks declaration that levy of tax on lottery is discriminatory and violative of Articles 14, 19(1)(g), 301 and 304 of Constitution of India. Grounds of challenge include violation of Article 14 of the Constitution of India. The levy of GST has been attacked as discriminatory. It is also submitted that there is a hostile discrimination in taxing only lottery, betting and gambling whereas leaving all other actionable claims from the taxing net as is evident by entry 6 of Schedule III of Act, 2017.

Findings of Court:

When there are specific statutory provisions enumerating what should be included in the value of the supply and what shall not be included in the value of supply we cannot accept the submission of petitioner that prize money is to be abated for determining the value of taxable supply.

Result : Writ Petition dismissed.