By TIOL News Service

GANGTOK, SEPT 30, 2014: THE issue is the taxability of the transaction in lottery tickets. The petitioners have challenged in the Sikkim High Court, letters issued by Mumbai Service Tax.

Union of India raised an objection that the three impugned letters were issued from the Mumbai Office, thus, the cause of action arose in the territorial jurisdiction of the Mumbai High Court, therefore, the Writ Petition would not be maintainable.

The High Court noted that in an earlier writ petition (reported in 2013-TIOL-904-HC-SIKKIM-ST) the same High Court had held that the transaction in the lottery tickets are not liable to service tax under the provisions of the Finance Act, 1994, as amended by the Finance Act, 2012 and the three communications issued in the said matter were quashed.

The High Court noted that the issue of jurisdiction was also considered in the same judgement.

The High Court in the present case, observed,

In the instant case, it was not disputed that the agreement had taken place in the State of Sikkim and the other events to run the lottery business had also taken place in the State of Sikkim. Therefore, as decided in the said matter, the objection raised by the Counsel for Respondents 1 and 2 does not appear to be correct and we accordingly turn down the same as the issue stands already concluded.

The High Court was of the view that the present writ petition is squarely covered by the judgment of the Court reported in 2013-TIOL-904-HC-SIKKIM-ST and it can be allowed on the same terms.

So, the High Court allowed this Writ Petition in terms of the earlier judgment and made a declaration that the transaction in the lottery tickets are not liable to service tax under the provisions of Finance Act, 1994 as amended by the Finance Act, 2012, and, also quashed the three communications from the Service Tax Department.

(See 2014-TIOL-1709-HC-SIKKIM-ST)