Show cause notice to Bhutan lottery promoters valid: HC

Kochi, Jan 10 (UNI) The Kerala High Court today held as valid the show cause notice issued by the state government to the promoters of the Bhutan lottery on cancellation of registration certificate.

Justice K Balakrishnan Nair, however, quashed the show cause notice issued against the promoters of the Sikkim lottery.

Following the verdict, Kerala Finance Minister Thomas Issac told newspersons at Thiruvananthapuram that immediate steps would be taken to cancel the registration of Bhutan lottery.

The court passed the judgement while disposing the petitions filed by the promoters of the Sikkim and Royal Government of Bhutan.

The petitioners had the registration as lottery promoters under the Kerala Tax on Paper Lotteries Act, 2005.

It was condended by the petitioners that the government issued a notice calling upon them to show cause why their registration certificate should not be cancelled.

But the notice was challenged by the petitioners citing that it violated Article 14 and 19 of the Constitution of India.

The court while disposing the petition filed by Sikkim lottery promoters observed that even if the lottery was conducted in violation of Section 4 of the Lotteries (Regulation) Act, the state had no power to regulate or prohibit it unless the state was a lottery free zone.

The court further observed that government pleader's contention seeking cancellation of the registration cannot be accepted.

The court said once the registration of promoter was cancelled, it would disable them from transporting or selling the tickets in the state.

The court observed that something which the state cannot do under Section 5 of the Central Act cannot be indirectly forced under the provisions of the Kerala Tax on Paper Lotteries Act.

Therefore, the court held that the notice was issued to the promoters without jurisdiction.

The court further ordered the state government that they shall recieve tax from the petitioner (Bhutan lottery) until the registration was cancelled.

UNI