Lottery ticket taxation on face value rejected; taxable goods component must be separated from the actionable claim element.

For the relevant period, lottery ticket sales could not be assessed on the full face value under the Haryana VAT framework because the governing law then in force remained H. Anraj, as Sunrise Associates operated prospectively only. The taxable component had to be separated from the actionable claim element, so face value alone could not form the basis of assessment. The assessments were therefore not sustainable in that form, and the matter was remitted for fresh assessment under the law applicable to the relevant period. Refund, if any, was to be considered only on proof that the tax burden had not been passed on.

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Issues: Whether the assessment of lottery ticket sales on the face value under Section 45(1) and Schedule G of the Haryana Value Added Tax Act, 2003 could stand in the light of the binding law governing lottery tickets, and whether the assessment orders required remand for fresh determination of tax liability.

Analysis: The governing principle applied was that, for the relevant period, the law declared in H. Anraj continued to hold the field because Sunrise Associates had overruled that view only prospectively. On that footing, a lottery ticket sale could not be taxed on the entire face value as if it were wholly a sale of goods. The taxable element had to be identified by separating the component, if any, referable to sale of goods from the component representing the actionable claim. Since the assessments had proceeded on the face value basis under the statutory schedule, they could not be sustained in that form. The question of refund was left to be examined by the Assessing Authority on proof that the tax burden had not been passed on.

Conclusion: The assessment orders, appellate orders, and tribunal orders were set aside and the matters were remitted for fresh assessment in accordance with the law applicable for the relevant period. The statutory provisions were to be construed consistently with the governing Supreme Court ruling, and face value of the lottery ticket could not by itself remain the basis of assessment.

Ratio Decidendi: Where the controlling Supreme Court decision is given only prospective effect, assessments for the earlier period must be made on the law then holding the field, with the taxable component of a composite lottery transaction determined by separating the sale element, if any, from the actionable claim element.

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