A lottery is considered an 'actionable claim' and goods or moveable property, and can be taxed under the Central Goods and Service Tax Act, 2017 and the State Goods and Service Tax Act, 2017. The court also found that the differential levy of tax was permissible.

Debangsu Basak, J.

The petitioners have sought a declaration that, lotteries are exempt from tax under Sl. No. 6 of Schedule III read with Section 72 of the Central Goods and Service Tax Act, 2017 and Sl. No. 6 of Schedule III read with Section 72 of the State Goods and Service Tax Act, 2017.

2. Learned Senior Advocate appearing for the petitioner has submitted that, a lottery cannot come within the definition of 'goods'. Referring to (H. Anraj v. Government of Tamil Nadu, 1986 1 SCC 63) he has submitted that, the initial view of the Supreme Court was that, lottery tickets to the extent they comprise the entitlement to participate in the draw, are goods. Such view was reversed in (Sunrise Associates v. Government of NCT of Delhi, 2005 5 SCC 603). Both, the Central Goods and Services Tax Act, 2017 (CGST) and the State Goods and Services Tax Act, 2017 (SGST) define 'goods'. Such definition includes actionable claim and excludes money and securities. He has referred to Section 7 read with Schedule III Entry 6 of CGST Act, 2017 in support of his contention. He has referred to the definition of 'goods' in Article 366(12) of the Constitution. He has submitted that, 'goods' as defined therein has to have the characteristics of material, commodities and articles. Referring to Article 366 (29A) of the Constitution, he has submitted that, the definition of 'tax' on the sale or purchase of 'goods' is an inclusive definition. However, there has to be a transfer of property. Therefore, according to him, 'goods' as defined in the Constitution has to be something which can be transferred for cash, deferred payment or other valuable consideration. According to him, it should be possible to transfer at least the beneficial interest in the movable property for it to be 'goods'. It has to be something which is actually transferable either in the physical form or at least a beneficial interest therein. Referring to Lotteries (Regulation) Act, 1998, he has submitted that, lottery has been defined to mean a scheme, in whatever form and by whatever name called for distribution of prizes by lot or chance to those persons participating in the chances of a prize, by purchasing tickets. According to him, ticket holder has a right to participate in the chance of getting a prize. The ticket holder, has a contingent interest in the prize money, which he may or may not get in the future, but does not get to possess any benefit for such payment in return. The sale of lottery ticket is, therefore, a sale of chance. Consideration is paid for the chance to win. The sale of lottery ticket therefore does not entail transfer of any 'goods' or even beneficial interest in a movable property. Therefore, the person who sells the lottery ticket is not selling any 'goods' nor is the purchaser buying any 'goods'. Viewed from such perspective, lottery cannot come within the definition of 'goods' under the CGST Act, 2017 or any of the SGST Acts.

3. Learned Senior Advocate appearing for the petitioner has referred to the preamble of CGST Act, 2017 and submitted that, the CGST Act, 2017 came into being to make provision for levy and collection of tax on inter-state supply of goods or services or both by the Central Government and the matters connected therewith or incidental thereto. According to him, for levy of tax, the subject of tax has to be 'goods'. He has also referred to the preamble to the Integrated Goods and Services Tax Act, 2017. Since lottery is neither 'goods' nor 'service', no levy under the Integrated Goods and Services Tax Act, 2017 can be made.

4. Learned Senior Advocate appearing for the petitioner has submitted that, when CGST, 2017 and IGST, 2017 propose to tax a lottery, it goes beyond the constitutional definition of 'goods'. He has relied upon (Jindal Stainless Ltd. v. State of Haryana, 2017 12 SCC 1) and has submitted that, the power of taxation controlled by Article 265 of the Constitution forbids levy or recovery or any tax except by authori