Regulatory tax controls on lottery tickets upheld as uniform measures to prevent evasion and aid effective collection.

Sub-rules (18), (19) and (20) of rule 26 of the Tamil Nadu General Sales Tax Rules, 1959 were framed to support levy of sales tax on lottery tickets and prevent evasion by requiring prescribed accounts and sealing of tickets sold within the State. The Court treated these requirements as uniform regulatory measures applicable to all lottery dealers, not as discriminatory or arbitrary restrictions. It held that delegated rules aimed at effective tax administration may regulate trade if they do not impose an unreasonable or confiscatory burden, and that administrative inconvenience alone is insufficient to invalidate them. The amended sub-rules were therefore upheld as consistent with articles 14, 19(1)(g), 21 and 300A.

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Issues: Whether sub-rules (18), (19) and (20) of rule 26 of the Tamil Nadu General Sales Tax Rules, 1959, introduced to regulate accounts and sealing of lottery tickets, were ultra vires or unconstitutional under articles 14, 19(1)(g), 21 and 300A of the Constitution of India.

Analysis: The impugned sub-rules were framed under the rule-making power conferred by the Act to implement levy of sales tax on lottery tickets and to prevent evasion. They required dealers to maintain day-to-day and monthly accounts in the prescribed forms and to get tickets sold within the State sealed by the competent authority. The provisions applied uniformly to all lottery dealers and did not discriminate between them. A regulatory procedure enacted to make tax collection effective and to curb evasion cannot, by itself, be treated as arbitrary or as an unreasonable restriction on the freedom to trade. The Court also treated the practical inconvenience highlighted by the petitioners as a matter calling for administrative improvement rather than as a ground for striking down the rules, especially since the rules themselves did not compel impossible compliance on the same day.

Conclusion: The amended sub-rules were held valid and not violative of articles 14, 19(1)(g), 21 or 300A of the Constitution of India.

Ratio Decidendi: Regulatory measures framed under delegated legislative power to facilitate tax collection and prevent evasion are valid if they apply uniformly and do not impose an arbitrary or confiscatory restraint on trade; administrative hardship alone does not invalidate such rules.

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