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Supreme Court Dismisses Meghalaya Government`s Review Petition on Previous Order Permitting Karnataka & Kerala to Tax Other State Lotteries

Supreme Court Dismisses Meghalaya Government`s Review
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  • Namita Ghosh August 23, 2022
  • 2 Minutes Read

On August 17, Supreme Court dismissed the petition filed by the Meghalaya government seeking a review of the apex court`s previous order granting Karnataka and Kerala legislative competence to levy tax on lotteries run by other states.

The Apex Court had, in an order dated March 23, 2022, upheld the constitutional validity of the Karnataka Tax on Lotteries Act, 2004, and the Kerala Tax on Paper Lotteries Act, 2005.

The review petition delved into whether the states can levy tax on the lotteries of other states under the Entry 62 of List II read with Entry 34 of List II.

Going through the court’s earlier decision in the case of State of Karnataka vs. State of Meghalaya 2022 SCC Online SC 350, a two-judge bench of Justices MR Shah and BV Nagarathna said, “Applications for listing review petitions in open court are rejected.”

The bench referred to its judgment dated March 23, where it had ruled that the laws in question in Karnataka and Kerala had appropriate clauses governing the conduct of lottery sales by other states. The court had ruled – “We also hold that lottery schemes by the Government of other States are organized/conducted in the State of Karnataka or Kerala, and there are express provisions under the impugned Acts for registration of the agents or promoters of the Governments of respective States for conducting the lottery schemes in the State of Karnataka and the State of Kerala. This indicates sufficient territorial nexus between the respondents–States who are organizing the lottery and the States of Karnataka and Kerala.”

Incidentally, on August 5, Meghalaya filed another petition seeking the Supreme Court to review its 1999 decision in the BR Enterprises case that upheld the states’ rights to ban lotteries of other states as long as they didn`t organize and sell lotteries themselves.

The Supreme Court’s dismissal comes days before Nagaland and Sikkim approached the court against the Kerala High Court order upholding the state`s right to control the marketing and sale of lotteries under the provisions of the Kerala Paper Lotteries (Regulation) Amendment Rules, 2018.

While the Apex Court will hear the Nagaland and Sikkim petitions on September 29, clearly, Meghalaya has not made any legal headway against the Karnataka and Kerala government’s rule to tax its lottery tickets being sold in these two states.

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