HC directs govt to accept tax on prospective basis from Megha

Kerala High court today directed the State government to accept the tax from Megha Distributors, promoters of Bhutan lottery and two others on a prospective basis from today.

The government should not insist on the provisions of payment of tax under sec. 10 of the Kerala Tax on Paper lotteries act of 2005, justice C K Abdul Rehim said in his order after admitting the petitions, challenging the legality of the Lottery Ordinance 2010, and referring them to a division bench.

The court also restrained enforcement of amendment to taxation rules introduced till the disposal of the petitions.

The rules contain procedure related to enforcement of ordinance.

Court said attempts of the state to legislate on lottery are motivated by the idea of preventing social menace. It is a matter of common knowledge that pernicious effects and gambling nature involved in lottery tickets is mainly affecting the lower strata of the society. Therefore it is the duty of the government to protect such vulnerable sector from being exposed to such criminal exploitations, the judge observed.

But such measurers cannot be permitted to transgress the fields of powers distinctly conferred on the constitution by Union government and governments of others States.

Only course left to the government to protect such social interest is to declare the State as lottery free zone, the judge held.