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Judgment
B. Subhashan Reddy, C.J.—These writ petitions have been filed questioning G.O.Ms. No. 19 of 1998 dated 26-6-1998 issued by the first
respondent by which the sale of tickets of a lottery organised, conducted or promoted by any other State within the Union Territory Pondicherry,
has been prohibited.
The lotteries were held to be pernicious and constitutionality of the Lotteries Act of 1998 enacted by the Parliament has been upheld by the
Supreme Court in M/s. B.R. Enterprises Vs. State of U.P. and Others, . The only condition imposed by the Supreme Court is that a State or
Union Territory, as the case may be, cannot impose ban on the sale of lottery tickets by other States/Union territories unless the host State or the
Union Territory imposes ban on its lotteries.
The notification referred to above, which is impugned in this writ petition, satisfies the dicta laid down by the Supreme Court in the above case.
As such, the question is no more res integra. In fact, this Court had an occasion to deal with similar matters arising out of the State of Tamil Nadu
in State of Mizoram v. State of T. N., 1993 WLR 104. Following the above judgment of the Supreme Court, the action of the State of Tamil
Nadu in imposing the ban on lotteries has been upheld by this Court. The above judgment of this Court was also affirmed by the Supreme Court.
But Mr. A. L. Somayaji, learned senior counsel appearing for the petitioners, submits that even after notification of 26-6-1998, the Union
Territory had not acted upon it, that exercising power u/s 62(7) of Pondicherry General Sales Tax Act, it even levied Sales Tax imposing a higher
tax on the sale of lottery tickets vide G.O. Ms. No. 35/2001/F.2, dated 1-10-2001 and as such, invoking doctrine of desuetude, on the ground
that because of the disuse of the above notification, the petitioners are entitled to continue their business in the sale and conduct of the lotteries. For
this proposition, he has relied upon the judgment rendered by the Supreme Court in Municipal Corporation for City of Pune and another Vs.
Bharat Forge Co. Ltd. and others, . But the facts in the said case are entirely different from the one in the instant case.
It cannot be said that the Union Territory of Pondicherry did not act upon the notification. The notification was acted upon and in fact, when
violations were found, even prosecutions were launched. Merely because the higher Sales Tax was levied on the sale of lotteries, it does not entitle
the petitioners to conduct the business as sales tax imposed is different from the permission to sell the lottery tickets. It has to be understood that
only when lottery tickets are sold, then the sales tax, as increased by G.O. Ms. No. 35/ 2001/F.2, dated 1-10-2001, would be levied. In fact, the
levy of sales tax cannot validate the illegal sale of lotteries and it cannot be said that if the sales tax has been levied, the respondents are estopped
from denying the right of the petitioners to sell the lottery tickets. So long as the lotteries are not permitted, the petitioners cannot run the lotteries
and if they run it illegally, then, apart from prosecution, they are also liable for sales tax as may be levied. Charging of sales tax. does not validate
the illegal actions of the petitioners.
In fact W.P. Nos. 8810, 8811, 9120,-9121. 9044, 9045, 9230 and 9231 of 1998 have been filed questioning the above notification and this
Court, following the judgment of the Supreme Court in M/s. B.R. Enterprises Vs. State of U.P. and Others, , dismissed those writ petitions. Some
of the petitioners here were also parties there.
In view of what is stated above, these writ petitions fail and are accordingly dismissed. The interim order, which was granted, was already
modified injuncting the petitioners from running the lotteries from the date mentioned. The ban imposed by the impugned notification No. 19 of
1998, dated 26-6-1998, on the sale and conduct of the lotteries, shall stand. Consequently, W.P.M.P. Nos. 58526, 58527, 59104 and 59105 of
2002 are closed.