Prospective overruling bars sales tax demand on lottery tickets for earlier years where levy had not attained finality

Lottery tickets were treated as involving two distinct interests: the right to participate in the draw, which was regarded as goods, and the chance to win, which was treated as an actionable claim. Applying prospective overruling, the declaration of law was taken to govern transactions and proceedings not yet final. As the earlier levy had not been finally concluded and no tax had been recovered for that period, the sales tax demand notice for the prior assessment years could not be sustained and was set aside.

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Issues: Whether the demand notice for sales tax on lottery tickets for the earlier assessment years could be sustained after the Supreme Court's declaration on the nature of lottery tickets and the operation of prospective overruling.

Analysis: The legal position governing lottery tickets was settled by the Supreme Court, which held that the purchaser acquires two distinct interests: the right to participate in the draw and the chance to win. Only the former was treated as goods, while the latter was treated as an actionable claim. The Court further applied the principle of prospective overruling as explained in the later Supreme Court decision, recognising that a declaration of law ordinarily operates on transactions and proceedings that have not attained finality. On that basis, a demand raised for the earlier period, where the levy had not been finally concluded and no tax had been recovered, could not be maintained.

Conclusion: The demand notice was unsustainable and was set aside in favour of the petitioner.

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