State of Karnataka & Anr etc Vs State of Meghalaya & Anr etc
Forum-Supreme Court of India
Date-23rd March 2022

Sub-Whether power to levy tax on lotteries under Entry No 62 of List II of Constitution of India lies with a State Government even in respect of those lotteries which are conducted by Central Government or another state government.

The Supreme Court in this very interesting judgement was called upon to decide as to who has the power to levy and collect the taxes on lotteries in pursuance of the entries as contained in the Union and State list of the Constitution of India in view of overlap between two entries. The apex court in a 122 page judgement guided by the doctrine of pith and substance which is applied to find out the true character of the enactment and the entry within which it would fall and also the law that when a power is conferred on the Legislature to levy a tax, the power itself must be widely construed, doctrine of unjust enrichment, after considering various decisions cited by the counsels, allowed the appeal of the States of Karnataka and Kerala and the upheld the power to levy tax on lotteries by State under Entry No 62 of List II.

The above judgement, though in the context of Lotteries, will be helpful in interpretation of cases in relation to power to levy the tax, the doctrine of pith and substance, meaning of Betting and gambling and inter play between various entries in the Union and State list of the Constitution of India.

Ramesh Patodia
24-03-2022