Official use exemption for tax does not extend to lottery tickets bought for a commercial lottery activity.

A concessional sales tax notification limited to goods purchased for a department's "official use" was held not to cover lottery tickets acquired for conducting a revenue-generating lottery activity. The Court reasoned that the decisive test was the actual purpose of the goods, not merely the departmental declaration stating official use. Because the tickets were printed for a commercial venture and not for ordinary office requirements, the expression "used by them" and the declaration "for official use" could not be extended to the purchase. The assessee was therefore not entitled to the reduced rate of tax, and assessment at the regular rate was upheld.

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Issues: Whether lottery tickets purchased by the Department of Small Savings and State Lotteries for conducting the lottery were goods used by the department "for use by them" and "for official use" within the meaning of the notification dated 30.03.1996, so as to attract the reduced rate of tax under section 5 of the Karnataka Sales Tax Act, 1957.

Analysis: The reduced rate under the notification was intended for goods required for the regular official use of the specified governmental departments. The declaration form also certified that the goods were purchased for official use. On the facts, the lottery tickets were printed for a revenue-generating lottery activity and not for the department's ordinary office use. The mere existence of a departmental declaration did not change the character of the purchase, because the decisive question was whether the goods were meant for official use or for a commercial venture. The Court held that the expression "used by them" in the notification and "for official use" in the declaration could not be extended to cover goods purchased for conducting a lottery business.

Conclusion: The assessee was not entitled to the concessional rate of tax, and the assessment at the regular rate was upheld.

Ratio Decidendi: An exemption or concessional tax notification limited to goods purchased for "official use" of a department does not extend to goods acquired for a commercial or profit-making activity, even if supplied to the department and supported by a declaration.

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