JUDGMENT
Govindasamy, J.
1. The petitioners in these writ petitions have been carrying on business as organising Agents for lotteries on behalf of various State Lotteries. The petitioners have experience in organising lotteries and used to distribute lottery tickets in the State of Tamil Nadu and elsewhere in India. The Tamil Nadu Government, in exercise of the powers conferred by Section 59 of the Tamil Nadu General Sales Tax Act hereinafter referred to as ‘the Act’, issued a Notification G.O.P. No. 77, dated 28.1.1984 inserting an Entry 163 in the First Schedule to the Act, whereby the sale of lottery tickets was brought within the purview of the levy of sales tax. In pursuance thereof, the tax was levied on the sale of lottery tickets at the point of first sale in the State. The said Notification was later replaced by a Legislative enactment viz., the Tamil Nadu Act 14 of 1984. The petitioner in W.P. No. 2062 of 1985 has challenged the levy before the Supreme Court and the Supreme Court by its Judgment in H. Anraj v. Government of Tamil Nadu , held that the State Government has power to impose levy on sale of lottery tickets. While so, in exercise of the powers conferred by Section 53 of the Act, the Tamil Nadu Government, by G.O.P. No. 1158, Commercial Taxes and Religious Endowments, dated 20.10.1984, effected amendments to the Tamil Nadu General Sales Rules, 1959, hereinafter referred to as ‘the Rules’, by introducing Sub-rules (18), (19) and (20) to the Rule 26 of the said Rules. Rules 18 to 20 are as follows:
(18) Every dealer in lottery tickets shall maintain respect of all tickets liable to tax on the sales effected by him, in addition to the other accounts maintained in the usual course of his business or in accordance with the other provisions of these rules, a day-to-day sales cum stock account in Form XXX-A and a monthly account of all receipts and sales of lottery tickets, State-wise, in Form – XXX-B.
(19) Every dealer in a lottery tickets that in respect of all tickets not liable to tax on the sales effected by him, a daily account in Form XXX-C together with the purchase vouchers or bills containing the particulars prescribed in Sub-rules (11) and (12) and the certificate, in Sub-rule (13).
(20) All lottery tickets sold within the State of Tamil Nadu shall bear the sale of the authority competent to assess the respective first seller. Every dealer shall, before he effects the sale of any tickets other than the tickets purchased from another registered dealer in the State, submit to the assessing authority the stock of such tickets together with a list giving the particulars of the name of the lottery, source of purchase, date of receipt of the tickets, their serial numbers and date of draw and get the tickets sealed by the assessing authority.
2. The said rules prescribed Forms XXX-A, XXX-B and XXX-C which are shown in the Annexure as Annexure-I, Annexure-II and Annexure-III respectively.
3. As it is the rules impose an obligation on the part of the dealer to maintain in respect of all tickets, liable to tax on the sales effected by him, a day-to-day sales-cum-stock account in form XXX-A and a monthly account of all receipts and sales of lottery tickets, State-wise, in Form XXX-B and also to maintain in respect of all tickets not liable to tax on the sales effected by him, a daily account in Form XXX-C together with the purchase vouchers or bills containing the particulars prescribed thereon. Rule 20 of the Rules provide that all lottery tickets sold within the State of Tamil Nadu shall bear the seal of the authority competent to assess the respective first seller. From the point of view of the petitioner these sub-rules are oppressive and hence they have filed the above Writ petitions for issue of a Writ of declaration declaring that G.O.Ps. 1158 C.T. & R.E., dated 20.10.1984 issued by the first respondent amending Rule 26 of the Rules by introducing Sub-rules 18 to 20, as ultra vires and void in so far as the petitioners are concerned.
4. It is stated that the impugned amendments are violative of Articles 14, 19(1)(g) and 21 and 300-A of the Constitution of India. The impugned amendments violate Article 19(1)(g) as they exceed the limit of reasonableness within the meaning of Article 19(6) of the Constitution of India. The impugned amendments are so arbitrary and unreasonable and imposed a burden on the petitioners, which is grossly impractical and disproportionate to any evil sought to be remedied and that the amendments fetter the petitioners’ right to deal with the property.
5. It is also stated that the impugned amendments have a telling effect on the sale of what are called daily lotteries i.e., lotteries in which there is a draw every day and it has been found impossible to do so consistent with the individual ticket sealing procedure introduced by the impugned amendment and that the respondents do not have the necessary staff or machinery or infrastructure to seal every lottery ticket of the petitioners each day before sale. It is also stated that the State has not prescribed any procedure for stamping/sealing of other articles of other States sold in Tamil Nadu. It is stated that the tax on sale cannot be augmented by stifling the very sales and if the impugned rule makes the sale itself effectively and practically un worth while, sales tax collection can certainly not be expected to increase. The more easy the sale, the more sales tax is leviable and that the petitioners have to incur extra expenditure to have sufficient number of staff in order to comply with the formal requirement of the amended rules.
6. The respondents in their counter affidavit stated that the lottery tickets are taxable at 20% single point of first sale in the State under Entry 163 of the First Schedule to the Tamil Nadu General Tax Act, 1959 with effect from 28.1.1984. However, the tax was reduced to 10% by the Tamil Nadu Amendment Act 41 of 1986 effect from 17.3.198ft, The levy of sales tax on the sale of lottery tickets was challenged before the Supreme Court under Article 32 of the Constitution and that the Supreme Court by its Judgment in H. Anraj v. Government of Tamil Nadu , upheld the validity of levy of sales tax on the sale of lottery tickets.
7. It is stated that in order to carry out the legislative demand of the levy of tax on sales of lottery tickets, the State Government has framed Sub-rules (18), (19) and (20) under Rule 26 of the Tamil Nadu General Sales Tax Rules to carry out the purpose of the legislation to levy tax on sale of lottery tickets. It is stated that every dealer in lottery ticket shall maintain in respect of all tickets liable to tax and not liable to tax, day-to-day sales-cum-stock account in Form XXX-A and a monthly account of all respects and sales of lottery tickets State-wise in Form XXX-B and a daily account in Form XXX-C and all lottery tickets sold within Tamil Nadu shall bear the seal of the authority competent to assess the respective first seller. It is stated that the impugned amendments are not violative of Articles 14, 19(1)(g), 21 and 300-A of the Constitution by reason of the fact that the provisions are equally applicable to all dealers in lottery tickets who are a class by themselves. Hence Article 14 is not, therefore, offended and that no taxation measure can be said to be violative Article 19(1)(g) unless it is shown to be confiscatory and that the rules framed to carry out the purpose of the Act is not therefore violative of Article 19(1)(g) and that there is no deprivation of personal liberty or property so as to state that it is violative of Articles 21 and 300-A of the Constitution. It is stated that the State Government is competent to frame rules to carry out the purpose of the Act to prevent evasion and make collection of tax effective. By reason of increased complexity of modern administration, it has become expedient and necessary to regulate the procedure for the purpose of implementing the provisions relating to the levy of tax. It is stated that there is legislative control in the framing of the rule so that the rule making powers may not become arbitrary and abuse of power without fear of check or control does not take place. There are procedural safeguards provided to keep watch over the exercise of these powers by the administrative authorities. The amended rules do not vitiate any constitutional provisions. The rules are framed in order to prevent evasion of tax. It is stated that it is the Department to seal the tickets for the purpose of sale and it is the burden on the Department to make arrangements and to provide adequate measures to seal the tickets. It is competent for the legislature to make all such incidental and ancillary provisions as may be necessary to effectuate the law. In the absence of such a provision, it would be impossible, to track the movement of sales of lottery tickets of other Slates. In the absence of such regulatory measures, it would be practically impossible to prevent evasion and suppression of sales of raffle tickets and that the petitioners cannot assume that there could be no safety to the tickets entrusted with the Department for sealing. This procedure of stamping of tickets cannot be adopted obviously in the case of other articles sold.
8. On going through the amended provisions viz., Sub-rules (18), (19) and (20) to Rule 26 of the Rules, it is clear that they impose obligations on every dealer in lottery tickets that he should maintain in respect of all tickets liable to tax on the sales effected by him, a day-to-day sales-cum-stock account in Form XXX-A and a monthly account of all receipts and sales of lottery tickets State-wise in Form XXX-B. Every dealer in lottery tickets should maintain in respect of all tickets not liable to tax on the sales effected by him, daily account in Form XXX-C together with the purchase vouchers or bills. Sub-rule (20) imposes a condition that all lottery tickets sold within the State of Tamil Nadu shall bear the seal of the authority competent to assess the respective firsts seller.
9. It is clear from the above that Sub-rules (18) to (20) to Rule 26 of the Rules provide a procedure that every dealer should maintain a day-to-day sales cum stock account and daily account as contemplated in Forms XXX-A, XXX-B and XXX-C. It is not the case of the petitioners that these rules are inconsistent with any of the provisions of the Act or of the Constitution. It is also not in dispute that the Authority who framed the rules has authority and is competent to frame the Rules. The contention that is put forward on behalf of the petitioners is that these rules are violative of Articles 14, 19(1)(g) and 300-A of the Constitution. On a perusal of the rules, the Rules do not make any discrimination from among the dealers who are dealing in Lottery tickets. The prescribed procedure to maintain the account with the avowed object of preventing evaion of tax, cannot be said to be violative of Article 14 or violative of Article 19(1)(g) of the Constitution. It is manifestly clear that there are no arbitrariness as a result of the introduction of the impugned rules nor are there any restriction for the dealer to deal with the lottery tickets. Hence the allegation that the impugned sub-rules are violative of Articles 14 and 19(1)(g) of1 the Constitution, is without substance.
10. The only grievance that is projected by the petitioners at the time of arguments is that as a result of the impugned Sub-rules, the dealers are expected to maintain day-to-day sales-cum-stock account in Form XXX-A and monthly account of all receipts and sales of lottery tickets State-wise in Form XXX-B and also to maintain in respect of all tickets not, liable to tax on the sales effected by them, a daily account in Form XXX-C and that is practically not possible to maintain day-to-day or daily account, having due regard to the nature of the business that is being transacted by the dealers viz., that the dealers have to distribute the tickets to various agents and it is not possible to make an entry in Form XXX-A, XXX-B and XXX-C. The said contention can be said to be well founded because the practical difficulties pointed out by the learned Counsel for the petitioners are possible by reason of the fact that the dealers cannot be in a position to get the details of the sale on the very same day, with the result the dealers should be put into difficulties to maintain day-to-day or daily account, as required under Sub-rules (18) and (19) to Rule 26 of the Rules.
11. On going through the Forms XXX-A, XXX-B and XXX-C, there appears to be no requirement that the details in the forms should be filled on the very same day. It is in these circumstances, the apprehension on the part of the petitioners that they would not be in a position to fill up the forms on the very same day or on every day and in case of failure to do so they are liable for prosecution, cannot be sustainable. It may be stated in this connection that all that the dealers were required to do are that they should maintain in respect of tickets liable to tax on the sales effected by them a day-to-day sales-cum-stock account in Form XXX-A, monthly account of all receipts and sales of lottery tickets State-wise in Form XXX-B and should maintain in respect of tickets not liable to tax on the sales effected by them daily account in Form XXX-C. It is made clear that the dealers are under an obligation to fill up the forms (i) in respect of tickets liable to tax on the sales effected by the dealers; (ii) sales in respect of tickets not liable to tax on the sales effected by the dealer in order to maintain a day-to-day sales cum stock account as. well as monthly account and daily account in Forms XXX-A, XXX-B and XXX-C respectively.
12. In so far as Sub-rule (20) is concerned, learned Counsel for the petitioners contended that all lottery tickets sold within the State of Tamil Nadu shall bear the seal of the authority competent to assess and such a procedure causes hardship to the petitioners, in the sense that the sealing of all the tickets is not practically possible and the authorities are able to seal only 20,000 tickets every day, even though the petitioners are to dispose of about more than 3,00,000 tickets per day and especially in daily lotteries, it is contended that the petitioners could not effect sales of all lottery tickets for the reason that the authority could not seal all the tickets, but only to the extent of 20,000 tickets. This hampers the trade of the petitioners’ business and consequently there is loss of revenue, both to the State as well as to the dealer.
13. It may be remembered that the learned Counsel for the petitioners has pointed out the practical difficulties that is being experienced by the dealers. In reply, the State Government has come forward with an averment that there would not be any difficulty to meet such a situation by improving the State machinery and by providing adequate staff to discharge their obligation of sealing of all tickets. It is stated that in order to prevent evasion of tax such regulatory measures have to be imposed. Considering the above, it can be said that the contention of the State Government in this behalf is also well founded. But the State Government has to take note of the hardship that is being experienced and explained by the learned Counsel for the petitioners and it should be alleviated by improving the State machinery and by providing adequate staff so as to comply the formalities of sealing of all the tickets produced each day and if this is done the petitioners cannot have any grievance at all. That apart, the petitioners have no grievance at all and the petitioners have not contended that the impugned sub-rules have suffered any other infirmity except that what they have contended hereinabove and as such it cannot be said that the impugned rules are liable to be struck down for the reasons stated by the petitioners supra.
14. It is, in these circumstances, made clear that the State Government should take note of the observation made hereinabove with reference to the obligation on the part of the petitioners to submit their returns once a week and also with reference to the responsibility Of the State to improve the State machinery in order to meet the contingency to sell all the tickets produced by the dealers so that the dealers in lottery tickets may not have any apprehension that the impugned sub-rules impose undue hardship in their business of dealing in lottery tickets. Learned Counsel for the petitioners have not argued any other point except those which have been dealt with hereinabove. With the above observations, the writ petitions are ordered accordingly. No costs.