High Court quashes notice demanding service tax from Future Gaming

GANGTOK, 24 Sept: The division bench of Sikkim High Court has rejected the notice served to Future Gaming Private Limited by the Superintendent of Central Excise and Service Tax, Gangtok Range, Gangtok in 2012 demanding that the company pay service tax.
Future Gaming Private Limited is a Company registered under the Companies Act, 1956 and is engaged in the business of sale of lottery tickets organised by the Government of Sikkim [Respondent No. 4] under an agreement of 2009 for a term of five years. By that agreement the Petitioner procures the lottery tickets in bulk from the Government of Sikkim and resells those to the public through various agents, stockists, resellers, etc.
Future Gaming had challenged the notice demanding the service tax in the Sikkim High Court on several grounds. According to the company, with the amendment to the Finance Act, 1994 in 2012, ‘lottery’ and ‘transaction in actionable claim’ were kept outside the purview of the service tax. Specific reference was made to Sub-Sections (1), (34), (44) and (55) of Section 65B as well as Sections 66B and 66D of the Act to indicate the change in the law in clearly excluding ‘lotteries’.
The division bench of Sikkim High Court has said that the impugned letter demanding Service Tax does not have the sanction and authority of either the Constitution or the law as there is no provision anywhere for imposing of service tax on ‘lottery’.
The next ground of attack was that there is no element of service in Future Gaming’s relation with the Government of Sikkim, in respect of the Sikkim State Lotteries. The petitioner purchases lottery tickets in bulk and sells them to stockists, resellers, etc., by adding a profit margin. The stockists, resellers, etc., in turn sell these tickets to retailers who in turn sell them to the ultimate participants of the draw. As the tickets are sold to the company by the state government, the transaction is one of sale and purchase of lottery ticket and not one of rendering of any service and the company is not involved in rendering any ‘taxable service’.

Future Gaming lodges formal complaint with Directorate against attempts to malign Sikkim lotteries and company

GANGTOK, 12 Jan: The Lotteries Directorate has confirmed that it has received a formal complaint from Future Gaming, the operator of Sikkim state lotteries, on the manner in which lotteries claimed be those of Sikkim lotteries were confiscated at Coimbatore, Tamil Nadu, and Cochin, Kerala, recently.
Director, Lotteries, today informed that he had received a complaint letter from the company along with samples of the ‘fake’ Sikkim state lotteries which were allegedly confiscated by the Tamil Nadu and Kerala police but were being projected as genuine ones being smuggled into the two states where the lottery is banned.
These materials, the Director said, would be put up to the State government for examination and further action.
Future Gaming had written a complaint letter to the Director, Lotteries Directorate, bringing to his notice the incident relating to the confiscation of Sikkim lotteries by the Tamil Nadu and Kerala police and while claiming that it had nothing to do with the matter, further requested the Lotteries Directorate to find the actual culprits behind the racket who were trying to malign the reputation of Sikkim State Lotteries.
The fake lottery tickets have also been received by the Lotteries Directorate.
On preliminary examination, it appears that someone was attempting to defame the Sikkim lotteries as well as the company that operates it, it was informed. However, any further action will be up to the state government to take after examination of the materials at hand. There has been no formal or official communication between the state government here and the Kerala or Tamil Nadu government or police either, stated the Director.
On the other hand, it is informed that the CBI and other police agencies had also shown some interest in the matter. A CBI inspector from Kerala is informed to have been enquiring about the incident.
17.55 lakh paper lotteries worth Rs. 35.10 lakh were confiscated by the Coimbatore police last week and another few lakh lotteries were reported to have been confiscated by the Cochin police a couple of days later. Future Gaming contends that these lotteries are not Sikkim lotteries but fakes made by a rival group to defame them who then informed the police.

Sikkim Lotteries confiscated in Tamil Nadu are fakes, claims Future Gaming

GANGTOK, 11 Jan: While it had come as something of a surprise to the State government, particularly the Lotteries Directorate, that lakhs of rupees worth of Sikkim state lotteries were being allegedly smuggled into Tamil Nadu where they were confiscated, what may be even more surprising is the claim and assertion by the lottery operator here that these were ‘fake’ lotteries.
It is also interesting to note that these so-called Sikkim state lotteries were confiscated in Tamil Nadu where Sikkim lotteries have been banned since the year 2003. This was the incident at Coimbatore, and a couple of days later, another ‘consignment’ was confiscated by the Kerala police at Cochin where Sikkim lotteries has suspended operations since September, 2010 as claimed by Future Gaming, the distributor of Sikkim Lotteries.
A ‘sample’ of the lotteries confiscated by the Coimbatore police last week is being brought to Sikkim to present to the Lotteries Directorate for examination, it is informed. These ‘samples’ are being brought as the Directorate has sought to know details of the incident and to satisfy queries of how such a huge consignment of Sikkim lotteries was being smuggled, informed officials of Future Gaming.
The 17.55 lakh paper lotteries worth Rs. 35.10 lakh were confiscated by the Coimbatore police last week and three persons arrested, while at Cochin 16 lakh lottery tickets were reportedly seized and two persons arrested. These reports were flashed in the national media. Sikkim state paper lotteries are operated by Future Gaming, earlier known as Martin Lotteries and is owned by John Britto, it is informed.
It was informed that the confiscated ‘samples’ have been procured by Future Gaming and are to be presented to the Lotteries Directorate, Sikkim. Officials of the state lotteries directorate will be able to identify them.
Speaking to NOW!, officials of the lottery company insisted that the lotteries confiscated are duplicates.
“You can be sure 200% that these are fake Sikkim state lotteries,” stated Ravi Chandran of Future Gaming.
The company informs that Mr. Britto’s advocate, against whom the Coimbatore police has lodged an FIR in connection with the seizure, had acquired a sample of the confiscated lotteries and on close examination the fakes were exposed.
Not only that, the arrested persons have revealed the name of the man for whom they were working and on whose orders they were transporting the consignment, Mr. Chandran claims.
The police, however, seem to be sticking to John Britto, the owner of Future Gaming, Sikkim, as the main accused.
“John Britto will prove in court that these are fakes,” asserted Mr. Chandran.
The ‘duplicates’, it is alleged, do not carry the signature of the Director, Lotteries Directorate, Sikkim, as all paper lotteries of Sikkim do and moreover, it is also claimed that on the top left hand corner even the name of the State has been misspelled. And while the state run lotteries are printed in security ink, the ‘confiscated’ lotteries seem to be printed in ordinary ink, it is claimed by Mr. Chandran.
Future Gaming, which pays Rs. 2000 per draw per day to the state government as tax, claims that someone is out to defame their company and the Sikkim government.
“It is a conspiracy to defame Sikkim and Future Gaming,” claim officials of Future Gaming.

Future Gaming lodges formal complaint with Directorate, Lotteries
Future Gaming, which operates the Sikkim state paper lotteries, has written to the Director, Lotteries Directorate, bringing to his notice the incident relating to the confiscation of Sikkim lotteries by the Tamil Nadu police. A similar complaint letter is also to be forwarded regarding the similar incident of confiscation at Cochin by Kerala police.
The company claims that it has nothing to do with the matter and further has asked the Lotteries Directorate to find the actual culprits behind the racket aimed at maligning the reputation of Sikkim State Lotteries. The company claims that it will also file a complaint with the Chief Secretary and the DGP as soon as they receive a certified copy of the FIR registered by the Coimbatore police. It is further informed that the lottery operator is also mulling over filing an FIR with the Sikkim Police as the incident has to do with the state run lotteries and also at the same police station where the FIR against them has been lodged.