Kerala High Court quashes rules brought by the Kerala Govt to regulate Sale of Other-State Lotteries [Read Judgment]

Kerala High Court - Kerala Govt - Sale of Other-State Lotteries - Taxscan

The Kerala High Court has quashed the rules brought by the Kerala government to regulate the sale of other-state lotteries.

The petitioner, Future Gaming and Hotel Services a private limited company engaged in the marketing and sale of lottery tickets organized by the State of Nagaland in the State of Kerala. The petitioner challenged an amendment brought to the Kerala Paper Lotteries (Regulation) Rules, 2005.

These amendments were brought into force in the State with effect from April 28, 2018, vide Government order.

The amendments brought by the Government of Kerala are essentially featured to regulate the lotteries, organized, conducted, and promoted by other States.

The petitioner further challenged the communications issued by the Principal Secretary to the Government and Director of State Lotteries respectively are in tune with the amendment directing the petitioner to comply with the amended rules to market lotteries of other States.

The Single Judge Bench of Justice A. Muhamed Mustaque noted that no state can exercise its authority by making Rules in such a way to impact upon the authority of other States to organize, conduct and promote a lottery. That power is exclusively given to the Central Government under Section 6.

“Any Rules, therefore, has to be tested against three essential elements of authority conferred upon the State Government. If the Rules are framed in such a way to interfere in the authority of other States to organize, conduct and promote (except the sale of lottery tickets) that would amount to usurping the power of the Central Government,” the court said.

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