Article 14 classification upheld for lottery exemption limited to State-authorised schemes with rational regulatory safeguards.

A statutory exemption confined to lotteries specially authorised by the State Government was held not to offend Article 14 because such lotteries were subject to direct State control and safeguards against misuse of funds and public exploitation. Lotteries authorised by other States but organised by private or institutional agencies were treated differently since effective regulatory supervision in Maharashtra could not be assumed. The classification was therefore based on a real and relevant distinction with a rational nexus to regulation and prevention of abuse, and the challenge to the restricted exemption failed.

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Issues: Whether the exemption in Section 32(c) of the Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958, confined to lotteries specially authorised by the State Government, was discriminatory under Article 14 when lotteries authorised by other States but organised by non-governmental agencies were not exempted.

Analysis: The exemption was upheld on the ground that lotteries specially authorised by the State Government stood on a different footing from lotteries authorised by Governments of other States but organised by private or institutional agencies. In the former case, the State Government could itself regulate the activity and prevent misuse of funds and exploitation of the public. In the latter case, effective regulatory control within Maharashtra would be difficult, and the corresponding safeguards could not be assumed to exist. The differentiation was therefore based on a real and relevant distinction connected with control and prevention of abuse, and did not amount to hostile discrimination.

Conclusion: The classification was valid and there was no violation of Article 14.

Final Conclusion: The challenge to the restricted exemption failed, and the writ petitions were dismissed with costs.

Ratio Decidendi: A statutory exemption limited to lotteries specially authorised by the State is not discriminatory where the classification is founded on a real distinction bearing a rational nexus to effective regulation and prevention of abuse.

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