libra, justice, law

Case Comment: “Skill Lotto Solutions Pvt. Ltd. V Union of India”

Writ petition (civil) no.961 of 2018 decided on December the 3rd, 2020


Throughout history, gambling has bee­n a widespread activity with roots dating back to ancient times. The earliest known evidence of gambling can be traced to China’s ancient civilization, where the first form of gaming originated. References to a wooden drawing in the Chinese “Book of Songs” suggest that tiles were possibly used in an early lottery game. This tells us that Lottery and Gambling are not a concept developed in recent years and it has been legally existing for over a few centuries. The present case pertains to the question that whether Lotteries would be included within the definition of goods and also whether the tax can be levied under the Central Goods and Services Tax Act, 2017 or not.


Skill Lotto Pvt. Ltd. is an agent that has been authorized to sell and distribute the lotteries which are coordinated by the State of Punjab has approached the apex court filing a writ petition stating the levy of tax on the lottery violates Article 14 of the Constitution of India which enumerates that “The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.” and also violative of other provisions stated in the constitution such as Article 19(1)(g), 301 and 304.

Earlier lotteries were handled by the State through their legislations such as “Bengal Finance Sales Tax Act, 1941 and Madras General Sales Tax Act,1939″, etc. Now the parliament has enacted a central legislation binding on all states, the Lotteries (Regulation) Act, 1998. Article 246A containing special provisions with respect to the Goods and Services Tax was added to the constitution was added through the 101st Amendment Act, 2016. Later, the Central Goods and Services Act, 2017, was established by Parliament to levy and collect taxes on inter-state supply of goods and services.


  1. Whether the petition filed by Skill Lotto Pvt. Ltd. is maintainable under Article 32 of the Constitution of India or as claimed by the respondent, lottery is a thing outside commerce and as a result, the petitioner cannot invoke his right to practice any profession or to carry on any occupation, trade or business enumerated under Article 19 (1)(g)?
  2. Whether incorporating an actionable claim within the definition of ‘goods’ contradicts the legal interpretation of goods and is unconstitutional?
  3. Whether the inclusion of Lottery, betting and gambling into the meaning of goods and leaving all the other types of actionable claims which are mentioned in Item no. 6 Schedule III of the Central Goods and Services Tax Act, 2017 is an infringement of Article 14 of the Constitution of India?
  4. Does the assessment of GST pertaining to the face value of lottery tickets require the exclusion of the prize money component for the computation purpose of GST?


The Council on behalf of the Petitioner was’ ‘Shri Ravindra Shrivastava’ and on behalf of the respondent it was ‘Shri Vikramjit Banerjee’, who was theAdditional Solicitor General for the Union of India.

Arguments of Petitioner

  • He submitted that under Article 366 of the Constitution of India, “goods includes all materials, commodities, and articles.” Because this term excludes actionable claims, the scope of ‘goods’ established in Section 2(52) of the Central Goods and Services Tax Act, 2017 that is “goods means and includes every kind of movable property other than money and securities but includes actionable claims……” is unconstitutional.
  • The counsel in his argument has referred to “Sunrise Associates v. Govt. of NCT of Delhi and Ors”[1] to contend that the Constitutional Bench has decided lottery not to be a part of ‘good’ in this judgement. Thus, including lottery within the definition of good is contrary to the judicial pronouncement.
  • He argues that the imposition of tax on the face value of lottery tickets is impermissible due to the inclusion of prize money, which is intended to be reimbursed to the lottery ticket winners.
  • The counsel has also referred to State of Madras v Gannon Dunkerley & Co.[2], which stated that “the deliberate endeavour to encompass the actionable claim within the purview of goods appears to be a deliberate attempt aimed at bringing lotteries within the ambit of GST, thereby leading to a situation where the definition of goods conflicts with its meaning ascribed to it by the Constitution of India.”
  • The phrases contained in the Indian Constitution must be restricted to their legal meaning and not their popular interpretation.
  • He also argues that the Parliament lacks the authority to define something broadly enough to subject it to taxation when it wouldn’t otherwise be taxable.

Arguments of Respondent

  • He stated that lottery is “res extra commercium” and that the petitioner has no right to invoke this writ against the violation of his Freedom Of Occupation, Business, Profession and Trade and Article 301 of the Constitution as he began his argument with the question of whether this petition could be maintained under the provisions of Article 32 of the constitution.
  • The transaction involving lotteries cannot be elevated to the level of trade, commerce, or intercourse.
  • He submits that the laws which concern themselves with economic activity need to be interpreted with “greater latitude than laws touching civil rights.” He also contends that the courts are reluctant to interfere with the taxing-related matter upon which the state has a better understanding.
  • He also referred to Sunrise Associates in which it was stated that “an actionable claim is movable property and ‘goods’ in the wider sense of the term”
  • He also framed an argument on the inapplicability of State of Madras v Gannon[3] Dunkerley with regards to the facts of a current case because the former case decision relates to the meaning of the word ‘sale’ and is not concerned with the interpretation of “goods”.


In response to arguments presented by both counsels, the highest court concluded that Article 32 may very well be invoked to address a breach of Article 14, particularly one involving a legislative Act. The court overruled the contention of respondents that the writ is not maintainable by citing different cases such as H. Anuraj and Ors. V. State of Maharashtra[4]and H. Anuraj V. Government of Tamil Nadu[5] in which the courts have taken notice of the matter of lottery itself and have entertained the writ petition. According to the judgment, “the inclusion of an actionable claim within the definition of “goods” as delineated in Section 2(52) of the Central Goods and Services Tax Act, 2017 does not contravene the legal connotation of goods, and it does not infringe upon any laws or constitutional provisions”. In addition to this, it was also stated that the judgment given in the case of Sunrise Associates cannot be said to be obiter dicta. Court has concluded that lottery, betting and gambling were regulated and taxed by different legislation even before independence thus the concept of taxing lottery is a decades-old concept and if the parliament has included lottery, betting and gambling to levy GST and not other actionable claims, it cannot be conferred that there is no rationale or reason for leaving the others and keeping only these three.

It was held in the case of the “State of Bombay V. R.M.D. Chamarbaugwala”[6] The makers of India’s constitution established an ideal welfare state without intending for betting and gambling activities to be considered on par with trade or commerce. Therefore, petitioners cannot legitimately assert any fundamental right under Article 19(1)(g) nor rely upon protection offered by Article 301 in the Constitution of India. In the current instance, the court determined that there is no discrimination in taxing the lottery, betting, and gaming while not taxing other actionable claims, and therefore no violation of Article 14 in Item No. 6 of Schedule III of the Act of 2017. After considering all the facts and laws put forward by both parties, the petitioner is not entitled to the remedy sought in the writ petition, the supreme court said.


The whole case arose due to the fact that the term “goods” and whether it includes an actionable claim under it or not. Thus, all this could be avoided if the parliament had clearly defined an exhaustive definition of ‘goods’ in one particular place. Activities such as Lotteries, betting and gambling are centuries-old concepts thus they should have found their place in legislation clearly so that this ambiguity is not resolved through judicial pronouncements. To move towards the welfare state which was dreamt by the constitution maker, we need to raise the tax slab from 28 percent to more than 50 percent for these prize competitions being of a gambling nature. So that society as a whole could move towards enhancing their skills and wisdom thereby rejecting these quick money options.


After conducting a comprehensive analysis of the presented evidence and legal arguments, India’s Apex Court deemed the writ petition valid under Article 32. However, the court dismissed the petitioner’s claims within the writ petition. Nevertheless, as the petitioner had requested the opportunity to challenge the notification issued on 21st February 2020/2nd March 2020, which equalized the goods and services tax (GST) rates for state-run lotteries and lotteries organized by the State, the petitioner sought permission to pursue this matter separately. The court, recognizing the petitioner’s plea, granted the liberty to challenge the aforementioned notification through appropriate legal proceedings.

NAME: Tushar Dhar

COLLEGE: University of Allahabad[1] 

[1] Sunrise Associates v. Govt. of NCT of Delhi and Ors, (2006) 5 SCC 603

[2] State of Madras v Gannon Dunkerley & Co, (1959) SCR 329

[3] Ibid

[4] H. Anuraj and Ors. V. State of Maharashtra, (1984) 2 SCC 292

[5] H. Anuraj V. Government of Tamil Nadu, (1986) 1 SCC 414

[6] State of Bombay V. R.M.D. Chamarbaugwala, (1957) AIR 699