T.JOHN ROSE v. STATE OF KERALA

NORTH BLOCK, CENTRAL SECRETARIAT, NEW DELHI. BY ADV. SRI.ALEX VARGHESE, CGC - R7 SRI.V.T.GOPALAN (SR) - R6 SRI.A.M.SHAFFIQUE SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.ANIL D. NAIR SPL. GOVERNMENT PLEADER (TAXES) SRI.V.V.ASOKAN – R1 TO R5 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON ON 31/01/2007, THE COURT ON 08/02/2007 DELIVERED THE FOLLOWING: K.BALAKRISHNAN NAIR, J.-----------------------------------------W.P.(C) NO. 33980 OF 2006-T-----------------------------------------JUDGMENTThe short point that arises for decision in this case, is whether thepetitioner, who is not directly appointed by the State of Arunachal Pradeshas promoter for the sale of paper lottery tickets of the said Government inKerala, is entitled to get registration under Section 7 of the Kerala Tax onPaper Lotteries Act, 2005 (hereinafter referred to as 'the Act').2. The petitioner is a dealer of the tickets of paper lotteries organisedby the State of Arunachal Pradesh. For selling the tickets of the said lotteryin Kerala, he should get registration under Section 7 of the Act. Hesubmitted Ext.P6 application for registration. But, the 4th respondent, thecompetent authority to grant registration, did not accept the application. Inthe above background, this Writ Petition was filed, praying, inter alia, for adirection to the 4th respondent to receive, consider and pass appropriateorders on Ext.P6. Pursuant to the interim order of this Court dated20.12.2006, the application was received. The 4th respondent considered theapplication, after affording an opportunity of being heard to the petitionerand rejected it, by Ext.P11 order dated 5.1.2007. The writ petition was, Wpc No.33980/062therefore, amended, incorporating the challenge against Ext.P11.3. The petitioner submits, he is already having registration aspromoter under the Act, as evident from Ext.P3, for selling the tickets of thelotteries organised by the Royal Government of Bhutan and therefore, thereis no necessity for further getting registration under the Act, for selling thetickets of the lotteries of the Government of Arunachal Pradesh. Withoutprejudice to that contention, the petitioner applied for registration as thepromoter for the lottery run by the Government of Arunachal Pradesh. Thesaid application was not received for extraneous reasons. The KeralaGovernment is also organising paper lotteries. To prevent competition to itslotteries, the Kerala Government is doing everything possible to obstructand prevent the sale of the lottery tickets of other States. Thus, with malafide intentions, the 4th respondent did not receive the application. Theapplication received pursuant to the direction of this Court has beendismissed on erroneous grounds, it is submitted.4. The stand of the 4th respondent in Ext.P11 is that no reliablematerial has been produced to show that the petitioner has been appointedas the promoter by the Arunachal Pradesh Government to sell its lotterytickets in Kerala. The Arunachal Pradesh Relief and Welfare CharitableSociety is the promoter for sale of tickets of the lotteries organised by the Wpc No.33980/063Arunachal Pradesh Government. The said Society appointed M/s. SriKrishna Agency, to act on its behalf as distributor. The said Sri KrishnaAgency has appointed Sree Balaji Agencies, run by the petitioner, as itsselling agent in Kerala. So, the 4th respondent held that the petitioner wasnever directly appointed by the Arunachal Pradesh Government andtherefore, he cannot be treated as a promoter. On that ground, Ext.P11 waspassed. But, the petitioner would contend that the appointment made by thepromoter's agent's agent will be sufficient for the purpose of registration.So,the petitioner prays for quashing Ext.P11 and seeks consequential reliefs.5. The respondents 1 and 2 have filed a counter affidavit, supportingthe impugned order. The main contention urged by them is that thepetitioner is not a promoter, as defined under Section 2(l) of the Act. Hehas not been appointed by the Government of Arunachal Pradesh.Therefore, there is nothing illegal with Ext.P11, it is submitted.6. I heard learned senior counsel Smt.Nalini Chidambaram for thewrit petitioner, learned Special Government Pleader Sri.V.V.Asokan forrespondents 1 to 5 and learned senior counsel Sri.V.T.Gopalan, appearingfor the 6th respondent. I also heard Sri.Alex Varghese, CentralGovernment Counsel for the 7th respondent Union of India. Wpc No.33980/0647. The learned senior counsel for the petitioner brought to my noticeSection 4(c) of the Lotteries (Regulation) Act, 1998, which provides that theState Government shall sell the lottery tickets either by itself or throughdistributors or selling agents. According to her, the word “promoter”defined in Section 2(l) of the Act should be understood in the light of theabove said provision in the Central Act. If that be so, there need not be anydirect appointment by the Arunachal Pradesh Government, it is submitted.The learned senior counsel pointed out that by Ext.P1 communication dated13.12.2006, the Arunachal Pradesh Government has informed the KeralaGovernment that the petitioner has been appointed as the approvedpromoter/main stockist for marketing its lottery tickets in the State ofKerala, by M/s. Sri Krishna Agency, which in turn, has been appointed bythe Arunachal Pradesh Relief and Welfare Charitable Society, which is theauthorised distributor of Arunachal Pradesh State Lotteries organised by theArunachal Pradesh Government.8. Ext.P7(3), at page 50 of the paper book of the amended writpetition, is the agreement between the Government of Arunachal Pradeshand the Arunachal Pradesh Relief and Welfare Charitable Society,appointing the latter as the distributor for the lottery tickets of ArunachalPradesh. Ext.P7(9), at page 56, is the deed of agreement between the Wpc No.33980/065aforementioned Society and M/s. Sri Krishna Agency. Ext.P7(16), at page63, is the agreement between M/s.Sri Krishna Agency and M/s. Sree Balaji Agencies, run by the petitioner. By Ext.P10, the Arunachal PradeshGovernment recognised the petitioner as the selling agent of its lotteries inKerala, on the strength of the appointment made by M/s.Sri KrishnaAgency. In view of the above documents, the petitioner prays for quashingExt.P11 and seeks a direction to the 4th respondent to grant registration tohim, as the promoter of Arunachal Pradesh lotteries. The learnedAdditional Solicitor General, who appeared for the 6th respondent alsosupported the above submissions of the learned senior counsel for thepetitioner. He also added that the Arunachal Pradesh Governmentundertakes to pay the tax due to the Kerala Government, if there is anydefault from the part of the petitioner in paying any tax on paper lotteries tothe Kerala Government, payable for the sale of lottery tickets of ArunachalPradesh.9. Learned Special Government Pleader Sri.V.V.Asokan raised apreliminary objection that the writ petition is not maintainable, in view ofthe efficacious remedy of appeal available to be petitioner under Section 14of the Act. He also submitted that as long as the petitioner is not appointedby the Arunachal Pradesh Government, he is not entitled to get registration. Wpc No.33980/066He also relies on the discrepancies in the documents produced by thepetitioner, which have been noticed by the 4th respondent in Ext.P11. Hepoints out that Ext.P1 dated 13.12.2006 deals with the appointment of thepetitioner with effect from 15.1.2007, made on 15.12.2006, as per Ext.P7(16). So, the learned Special Government Pleader points out that thedocuments produced by the petitioner are not reliable.10. The first point to be considered is whether the writ petition has tobe dismissed, based on the preliminary objection raised by the learnedSpecial Government Pleader. According to him, Section 14 provides anefficacious remedy to the writ petitioner. The said Section reads as follows:"14. Appeals:-(1) Any person objecting to an order affecting him passed under theprovisions of this Act by the Assistant Commissioner may appeal to theDeputy Commissioner (Appeal) (hereinafter called the AppellateAuthority) of the concerned jurisdiction.(2) The appeal shall be preferred within thirty days from the date ofcommunication of the order appealed against.(3) No appeal against the order shall be entertained by the AppellateAuthority unless it is accompanied by satisfactory proof of payment oftax and penalty not disputed in appeal.(4) The appeal shall be in the prescribed form and shall be verified in theprescribed manner.(5) In disposing of an appeal, the Appellate Authority, may, after givingthe appellant a reasonable opportunity of being heard,(i) set aside the order, or reduce,or enhance the amount statedtherein or annul; Wpc No.33980/067(ii) pass such orders as it may think fit, for reasons to be recordedin writing.(6) Every order passed on appeal under this section shall, subject to theprovisions of section 18 be final."The above underlined portion of Section 14 would show that the appealscontemplated under Section 14 relate to orders assessing tax. Evenassuming the said section will cover orders in the nature of Ext.P11 also, Ifeel that an appeal from the 4th respondent to the Deputy Commissioner ofAppeal is like an appeal from 'Caesar to Caesar's wife'. Having regard tothe contentions taken up by respondents 1 to 5, no purpose will be servedby preferring a statutory appeal. Therefore, the preliminary objection raisedby the learned Special Government Pleader is untenable.11. The term “promoter” is defined in Section 2(l) of the Act, whichreads as follows:“(l) 'Promoter' means the Government of India orGovernment of a State or a Union Territory or any Countrywho had entered into a bi-lateral agreement or a treaty withthe Government of India for organizing, conducting orpromoting a lottery and includes, any person appointed forselling lottery tickets by the Government in the State ofKerala on its behalf, where such Government is not directlyselling lottery tickets in the State.”Going by the said Section, apart from the State Government concerned,which is organizing the lottery, another person can be treated as promoter, if Wpc No.33980/068only he is appointed by the Government. Neither the petitioner, nor the 6threspondent has a case that the petitioner has been appointed by theArunachal Pradesh Government. The only claim made is that the ArunachalPradesh Government has appointed a Charitable Society, which in turn, hasappointed M/s.Sri Krishna Agency. The said Sri Krishna Agency hasappointed the petitioner. So, the petitioner is not directly appointed by theArunachal Pradesh Government. As rightly pointed out by the 4threspondent and the learned Special Government Pleader, Ext.P1 cannot berelied on. As per Ext.P7(16), at page 63 of the paper book, M/s.Sri KrishnaAgency appointed the petitioner as the sole selling agent/promoter forKerala only on 15.12.2006. But, Ext.P1 letter dated 13.12.2006 mentions ofthat appointment made on 15.12.2006. So, Ext.P1 appears to be a shamdocument. Further, Ext.P1 only speaks of appointment of the petitioner bythe agent's agent of the Government of Arunachal Pradesh. Ext.P10 ispractically a re-production of Ext.P1 with the change of date of thedocument. Exts.P1 and P10 specifically say that M/s. Sree Balaji Agencies,the proprietory concern of the petitioner will be responsible for the salestax/compound tax/VAT and other Government levies. Against the aboveexpress words in the last paragraphs of Exts.P1 and P10, the 6th respondentundertook that the Arunachal Pradesh Government will be responsible for Wpc No.33980/069any default from the part of the petitioner to pay the tax on paper lotteries.But, the said undertaking will not cure the basic defect in the appointmentof the petitioner. Though, the learned senior counsel for the petitioner triedto explain how a letter dated 13.12.2006 could mention of an agreemententered into on 15.12.2006, the same was least convincing. Further, I feelthat it is unnecessary to probe into the said dispute in this case, as going bySection 2(l) of the Act, a person appointed by the Arunachal PradeshGovernment alone can be treated as the promoter. The plain literal meaningof Section 2(l) does not admit any other interpretation. The view taken bythe 4th respondent in this regard is certainly a plausible view,with which thisCourt cannot interfere under Article 226 of the Constitution of India. Atany rate, it cannot be described as an unreasonable view in the light of thefacts of the case. Lord Hailsham of St.Marylebone L.C., in In re W. (AnInfant) (1971 A.C. 682) held that two reasonable persons can perfectly,reasonably come to opposite conclusions on the same set of facts withoutforfeiting their title to be regarded as reasonable. So, I find no reason tointerfere with Ext.P11.12. The learned senior counsel appearing for the petitioner pointedout that the Kerala Government is trying to prevent the sale of lottery tickets Wpc No.33980/0610of Arunachal Pradesh Government, which it cannot do directly. I think, thesaid contention cannot be accepted. If the Arunachal Pradesh Governmentapplies for registration as promoter, it shall be granted registration. If theArunachal Pradesh Relief and Welfare Charitable Society applies, it shallalso be granted registration. If the Arunachal Pradesh Government directlyappoints the petitioner as the selling agent of the tickets of its lotteries inKerala, then the petitioner shall also be granted registration. Withoutsatisfying the requirement of Section 2(l) of the Act, the petitioner cannotclaim registration. It may be noticed that the petitioner does not challengeany of the provisions of the Act. The denial of registration to a strangerlike the petitioner, who is not eligible to get registration in terms of theprovisions of the Kerala Act, cannot be described as an act of hostilityagainst the sale of tickets of lotteries organised by the Arunachal PradeshGovernment. The petitioner has no locus standi to canvass this point onbehalf of the Arunachal Pradesh Government.13. Though, at the outset, the petitioner pointed out that theregistration obtained by him as the promoter of Bhutan Lotteries will enablehim to sell the tickets of Arunachal Pradesh Lotteries also, the said pointwas not seriously canvassed by the learned senior counsel for the petitioner. Wpc No.33980/0611Going by the definition of promoter, the said contention is plainlyuntenable.In the result, the Writ Petition fails and it is dismissed. No costs.8th February, 2007.K.BALAKRISHNAN NAIR, JUDGE.Nm/