TaxTMI 
TaxTMI 
1957 (4) TMI 55
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....nstitution of India. The said petition was presented before the High Court of Judicature at Bombay on December 18, 1952. In the said petition there were two petitioners who are now the two respondents to this appeal. The first petitioner is an individual who claims to be a citizen of India and the founder and Managing Director of the second petitioner, which is a company incorporated in the State of Mysore and having its registered head office at 2, Residency Road, Bangalore in that State. That petition was further supported by an affidavit sworn by the first petitioner on the same day. 2. The allegations appearing in the said petition and affidavit may now be shortly stated. In July, 1946 the first petitioner applied for and obtained from the then Collector of Bombay a licence, being Licence No. 84 of 1946, for the period ending March 31, 1947, to conduct what was known as the Littlewood's Football Pool Competitions in India. That licence was granted to the first petitioner under the provisions of the Bombay Prize Competitions Tax Act, (Bom. XI of 1939) (hereinafter referred to as the 1939 Act), which was then in force. The said licence was renewed for a period of one ye....
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....ing come into force on February 1, 1952, the second petitioner applied for and obtained a licence under that Act and paid the requisite licence fees and also paid and is still paying to the State of Mysore the tax at the rate of 15% (latterly reduced to 121%) of the gross receipts in respect of the R.M.D.C. Crosswords Prize Competition and continued and is still continuing the said Prize Competition through the said weekly newspaper "The Sporting Star" and to receive entry forms with fees from all parts of the territory of India including the State of Bombay. It is said, on the strength of the audited books of account, that after distribution of prizes to the extent of about 33% of the receipts and after payment of taxes in Mysore amounting to about 15% and meeting the other expenses aggregating to about 47%, the net profit of the second petitioner works out to about 5% only. 6. On November 20, 1952, the State of Bombay passed The Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act (Bom. XXX of 1952). This Act amended the provisions of the 1948 Act in several particulars. Thus, the words " but does not include a prize competition contained in a newspaper p....
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....ons contained in newspapers and other publications printed and published outside the State of Bombay, are ultra vires void and inoperative in law. 8. Upon the presentation of the petition a Rule was issued calling upon the State of Bombay to appear and show cause, if any it had, why the writ or orders prayed for should not be issued or made. The State of Bombay filed an affidavit raising several technical legal objections to the maintainability of the petition and refuting the allegations and submissions contained therein and in the supporting affidavit. It submitted that, as the second petitioner was a corporation , and the first petitioner, who was a Managing Director thereof, had no rights independent of the second petitioner, neither of them could lay any claim to any fundamental right under Art. 19(1) (g) and no question could arise of any violation of the petitioner's alleged fundamental rights. It further submitted that, having. Regard to the fact that lotteries and prize competitions were opposed to public policy, there could be no " business " in promoting a lottery or a prize competition and the question of the violation of the petitioners' alleged rights....
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....and commerce not within but outside the State. (f) The impugned Act operated extra-territorially inasmuch as it affected the trade or business of conducting prize competitions ' outside the State and was, therefore, beyond the competence of the State Legislature and invalid. (g) The impugned Act offended against Art. 301 of the Constitution inasmuch as it imposed restrictions on trade, commerce and intercourse between the States and was not saved by Art. 304 (b) of the Constitution. (h) The restrictions imposed by the impugned Act on the trade or business of the petitioners were not reasonable restrictions in the interests of the general public and, therefore, contravened the fundamental right of the petitioners, who were citizens of India, to carry on their trade or business under Art. 19 (1) (g) of the Constitution. (i) That ss. 10, 12 and 12A of the said Act offended against Art. 14 of the Constitution inasmuch as they empowered discrimination between prize competitions contained in newspapers or publications printed and published within the State and those printed and published outside the State. 10. The State of Bombay, which is now the appell....
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....t Art. 19 (1) (g) of the Constitution. In the result the rule nisi was made absolute and it was further ordered that the State of Bombay, its servants and agents, do forbear from enforcing or taking any steps in enforcement, implementation, furtherance or pursuance of any of the provisions of the impugned Act and the 1952 Rules made thereunder and particularly from -enforcing any of the penal provisions against the petitioners, their Directors, officers, servants or agents and that the State of Bombay, its servants and agents, do allow the petitioners to carry on their trade and business of running the Prize Competition mentioned in the petition and do forbear from demanding, collecting or recovering from the petitioners any tax as provided in the impugned Act or the said Rules in respect of the said Prize Competition and that the State of Bombay do pay to the petitioners their costs of the said applications. 12. Being aggrieved by the decision of the trial Judge, the State of Bombay preferred an appeal on June 8, 1954. The Court of Appeal dismissed the appeal and confirmed the order of the trial Judge, though on somewhat different grounds. It differed from the learned trial ....
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....e of an Act passed by the Legislature of a Province (now a State), its operation extends beyond the boundaries of the Province or the State, for under the provisions conferring legislative powers on it such Legislature can only make a law for its territories or any part thereof and its laws cannot, in the absence of a territorial nexus, have any extra territorial operation. If the impugned law satisfies both these tests, then finally the court has to ascertain if there is anything in any other part of the Constitution which places any fetter on the legislative powers of such Legislature. The impugned law has to pass all these three tests. 13. Taking the first test first, it will be recalled that the 1948 Act was enacted by the Provincial Legislature of Bombay when the Government of India Act, 1935, was in force. Under ss. 99 and 100 of that Act the Provincial Legislature of Bombay had power to make laws for the Province of Bombay or any part thereof with respect to any of the matters enumerated in List 11 in the Seventh Schedule to that Act. It will also be remembered that the 1948 Act was amended by Bombay Act XXX of 1952 after the Constitution of India had come into oper....
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....y to examine and to ascertain the purpose and scope of the impugned legislation. It may be mentioned that the 1939 Act was enacted to regulate and levy a tax on prize competitions in the Province of Bombay. It did not deal with lotteries at all. That Act was repealed by the 1948 Act which was enacted to control and to levy a tax not only on prize competitions but on lotteries also. It is not unreasonable to conclude that the clubbing together of lotteries and prize competitions in the 1948 Act indicates that in the view of the Legislature the two topics were, in a way, allied to each other. As already indicated, the 1948 Act was amended in 1952 by Bombay Act XXX of 1952 so as to extend its operation to prize competitions contained in newspapers printed and published outside the State of Bombay. In s. 2(1) (d) of the impugned Act will be found the definition of " prize competition " to which reference will be made hereafter in greater detail. Clause (dd) was inserted in s. 2(1) in 1952 defining "promoter". Section 3 declares that subject to the provisions of the Act, all lotteries and all prize com- petitions are unlawful. This is a clear indication that the legislature regard....
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....5 by the promoter of the lottery or prize competition as having been received or due in respect of such lottery or prize competition or in a lump sum having regard to the circulation or distribution of the newspaper or publication in the State." 15. Section 15 requires every person promoting a lottery or prize competition of any kind to keep and maintain accounts relating to such lottery or prize competition and to submit to the Collector statements in such form and at such period as may be prescribed. It is not necessary for the purpose of this appeal to refer to the remaining sections which are designed to facilitate the main purpose of the Act and deal with procedural matters except to s. 31 which confers power on the State Government to make rules for the purpose of carrying out the provisions of the Act. In exercise of powers so conferred on it, the State Government has, by Notification in the Official Gazette, made certain rules called the Bombay Lotteries and Prize Competitions Control and Tax Rules, 1952, to which reference will be made hereafter. 16. The petitioners contend that the object of the impugned Act is to control and to tax lotteries and prize competitio....
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....ny other competition for which the solution is, prepared beforehand by the promoters of the competition or for which the solution is determined by lot; (ii) any competition in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or not yet generally known; And (iii) any other competition success in which does not depend to a substantial degree upon the exercise of skill, but does not include a prize competition contained in a newspaper printed and published outside the Province of Bombay; " 19. The collocation of words in the first category of the definitions in both the 1939 Act and the 1948 Act as originally enacted made it quite clear that the qualifying clause "for which the solution is prepared beforehand by the promoters of the competition or for which the solution is determined by lot " applied equally to each of the five kinds of prize competitions included in that category and set out one after another in a continuous sentence. It should also be noted that the qualifying clause consisted of two parts separated from each other by the disjunctive word "or". Both pa....
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.... those two categories of gambling competitions were squeezed in, as the second category, "competitions in which prizes were offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or is not yet generally known." This juxtaposition is important and significant and will hereafter be discussed in greater detail. 20. As already stated the 1948 Act was amended in 1952 by Bombay Act XXX of 1952. Section 2(1)(d) as amended runs as follows: Prize competition " includes- (i) (1) cross-word prize competition, (2) missing word prize competition, (3) picture prize competition, (4) number prize competition, or (5) any other prize competition, for which the solution is or is not prepared beforehand by the promoters or for which the solution is determined by lot or chance; (ii) any competition in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or not yet generally known; and (iii) any other competition success in which does not depend to a substantial degree upon t....
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....tions, legitimate or otherwise, within the operation of the regulatory provisions of the Act including the taxing sections. The argument is thus formulated. As a result of the amendment the qualifying clause has been broken up into three parts separated from each other by the disjunctive word " or ". The, three parts are (1) for which the solution is prepared beforehand by the promoters, (2) for which the solution is not prepared beforehand by the promoters and (3) for which the solution is determined by lot or chance. The first and the third parts of the qualifying clause, it is conceded, will, when applied to the preceding five kinds of prize competitions, make each of them gambling a ventures; gut it is contended that prize competitions to which the second part of the qualifying clause may apply, that is to say prize competitions for which the solution is not prepared beforehand, need not be of a gambling nature at all and at any rate many of them may well be of an innocent type. This argument hangs on the frail peg of unskilful draftsmanship. It has been seen that in the old -definitions all the five kinds of prize competitions included in the first categorv were of a gam....
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....(See Maxwell on the Interpretation of Statutes, 10th edition, page 238). 23. A similar argument was sought to be raised on a construction of cl. (ii) of s. 2(1) (d). As already stated, in between the first and the third categories of prize competitions which, as already seen, are of a gambling nature the definition has included a second category of competitions in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or not yet generally known. It is said that forecasts of such events as are specified in the section need not necessarily depend on chance, for it may be accurately done by the exercise of knowledge and skill derived from a close study of the statistics of similar events of the past. It may be that expert statisticians may form some idea of the result of an uncertain future event but it is difficult to treat the invitation to the general public to participate in these competitions as an invitation to a game of skill. The ordinary common people who usually join in these competitions can hardly be credited with such abundance of statistical skill as will enable them, by the appli....
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....een clubbed together with lotteries and dealt with in the same Act and seeing that the second category of the definition of " prize competition " is sandwiched in between the other two categories which are clearly of a gambling nature and in view of the other provisions of the impugned Act and in particular s. 3 and the taxing sections, we are clearly of opinion that the definition of " prize competition " on a proper construction of the language of s. 2(1) (d )in the light of the other provisions of the Act read as a whole comprises only prize competitions which are of the nature of a lottery in the wider sense, that is to say, of the nature of gambling. The Court of Appeal took the view that although as a matter of construction the definition did include innocent prize competitions, yet by the application of another principle, namely, that a literal construction will make the law invalid because of its overstepping the limits- of Entry 26, which comprises only trade and commerce within the State, the definition should be read as limited only to gambling prize competitions so as to make it a law with respect to betting and gambling under Entry 34. It is not necessary for us ....
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....t such period as may be prescribed. Form 'J' prescribed by r. 11 (c) requires the promoter to declare, among other things, the total number of tickets/coupons received for the competition from the State of Bombay and the total receipts out of the sale of the tickets/coupons from the State of Bombay. The percentage under a. 12A is to be calculated on the total sums specified in the declaration. It is clear, therefore, that the tax sought to be imposed by the impugned Act is a percentage of the aggregate of the entry fees received from the State of Bombay. On ultimate analysis it is a tax on each entry fee received from each individual competitor who remits it from the State of Bombay. In gigantic prize competitions which the prize competitions run by the petitioners undoubtedly are, it is extremely difficult and indeed well nigh impossible for the State to get at each individual competitor and the provision for collecting the tax from the promoters after the entry fees come into their hands is nothing but a convenient method of collecting the tax. In other words, the taxing authority finds it convenient in the course of administration to collect the duty in respect of ....
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....sed by s. 12A is a tax on betting and gambling. In enacting the statute the Legislature was undoubtedly making a law with respect to betting and gambling under Entry 34 as here in before mentioned. By the amending Act XXX of 1952 the Legislature by deleting the concluding words of the definition of 'prize competition', namely," but does not include etc., etc.," extended the operation of the Act to prize competitions carried on in newspapers printed and published outside the State of Bombay. They knew that under Art. 276 which reproduced s. 142A of the Government of India Act, 1935, they could not impose a tax exceeding the sum of Rs. 250 on any trade or calling under Entry 60. If the tax can be referable either to Entry 60 or to Entry 62, -then in view of the fact that s. 12A will become at least partially, if not wholly, invalid as a tax on trade or calling under Entry 60 by reason of Art. 276(2), the court must, in order to uphold the section, follow the well established principle of construction laid down by the Federal Court of India and hold that the Legislature must have been contemplating to make a law with respect to betting and gambling under Entry 62, for there....
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....f the copies of the " Sporting Star ", the petitioners print over 40,000 extra coupons for distribution which no doubt are available from their local collectors. The most important circumstance in these competitions is the alluring invitation to participate in the competition where very large prizes amounting to thousands of rupees and sometimes running into a lakh of rupees may be won at and for a paltry entrance fee of say 4 annas per entry. These advertisements reach a large number of people resident within the Stat. The gamblers, euphemistically called, the competitors, fill up the entry forms and either leave it along with the entry fees at the collection depots set up in the State of Bombay or- send the same by poet from Bombay. All the activities that the gambler is ordinarily expected to undertake take place, mostly if not entirely, in the State of Bombay and after sending the entry forms and the fees the gamblers hold their soul in patience in great expectations that fortune may smile on them. In our judgment the standing invitations, the filling up of the forms and the payment of money take place within the State which is seeking to tax only the amount received by t....
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....) or Art. 301 applies at all, the restrictions imposed by the impugned Act are reasonable restrictions necessary in the interest of the general public and saved by Art. 19(6) and by Art. 304(b),of the Constitution. It is conceded that the bill which became Act XXX of 1952 and amended the 1948 Act in the manner here in before stated was introduced in the Legislature of the State without the previous sanction of the President and, consequently, the condition precedent to the validity of the resulting Act as laid down in the proviso had not been complied with but it is submitted, we think correctly, that the defect was cured, under Art. 255, by the assent given subsequently by the President to the impugned Act. It is, however, admitted by learned counsel appearing for the appellant State that under Art. 255 the subsequent assent of the President will save the Act if the other condition embodied in Art. 304(b) as to the restrictions imposed by it being reasonable in the public interest is held to be satisfied but it will not save the rules framed under a. 31 of the impugned Act which had never been placed before the President or assented to or approved by him. We now proceed to exam....
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.... same thing-the freedom of trade Art. 19(1)(g) looks at the matter from the point of view of the individual citizens and protects their individual right to carry on their trade or business, Art. 301 looks at the matter from the point of view of the country's trade and commerce as a whole, as distinct from the individual interests of the citizens and it relates to trade, commerce or intercourse both with and within the States. The question which calls for our decision is as to the true meaning, import and scope of the freedom so guaranteed and declared by our Constitution. We have been referred to a large number of -decisions bearing on the Australian and American Constitutions in aid of the construction of the relevant articles of our Constitution. 31. In the Commonwealth of Australia Constitution Act (63 and 64 Vic. c. 12) there is s. 92 from which our Art. 301 appears to have been taken. The material part of a. 92 -runs thus: On the imposition of uniform duties of customs, trade, commerce and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free. 32. It has been held in James v. Commonwealth of Aust....
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....933) 50 C.L.R. 30) and O. Gilpin Ltd. v. Commissioner of Road Transport and Tramways(1). In each of these three cases the State law was upheld as not offending against s. 92. Cases arose under statutes which were sought to be supported on the ground of health. In Ex parte Nelson (No. 1) ((1928) 42.C.L.R. 209) a New South Wales statute prohibited entry of cattle from tick infected area until dipped. Applying the principle of pith and substance, it was held that the restrictions looked at in their true light, were aids to and not restrictions upon the freedom of inter-State trade, commerce and intercourse. In Tasmania v. Victoria (1935) 52 C.L.R. 157). the absolute prohibition of imports of potatoes from Tasmania to Victoria could not on facts be supported as a health measure and consequently was struck down as a violation of s. 92. In James v. Commonwealth of Australia(L.R. (1936) A.C. 578) came up for consideration the Dried Fruits Act 1928-35 which prohibited the carrying of any dried fruit from one State to another except under a licence and which provided for penalty for its contravention. The regulations authorised the Minister to direct the licensee to export a certain p....
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....ntra- state transaction but did not think it necessary to decide that question. After referring to the observations of Lord Wright in James v. The Commonwealth (L.R. (1936) A.C. 578,627) that the freedom declared by s. 92 meant freedom at the frontier, the learned Judge observed that the question whether that freedom had been restricted or burdened depended upon the true character and effect of the Act. He took the view (at p. 616) that the main purpose of the Act was to prevent or suppress lotteries and particularly, in ss. 19, 20 and 21, foreign lotteries and that it was aimed at preventing what he graphically described as "illegitimate methods of trading", if sales of lottery tickets were regarded as trading. The learned Judge took note of the fact that New South Wales law allowed State lotteries and concluded that the true character of the impugned Act was to suppress gambling in foreign lottery tickets and examined from the historical point of view, from, the character of the Act, its function and its effect upon the flow of commerce, the Act did not, in his view, restrict or hinder the freedom of any trade across the frontier of the States. Dixon J., as he then was, gav....
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....ance and loss which, on general grounds of policy, the State is entitled to prevent or at least minimize." 36. McTiernan J. was even more forthright in placing gambling outside the pale of trade, commerce and intercourse. At p. 631 he said: "Some trades are more adventurous or speculative than others, but trade or commerce as a branch of human activity belongs to an order entirely different from gaming or gambling. Whether a particular activity falls within the one or the other order is a matter of social opinion rather than jurisprudence...... ..................... It is gambling, to buy a ticket or shard in a lottery. Such a transaction does not belong to the commercial business of the country. The purchaser stakes money in a scheme for distributing prizes by chance. He is a gamester." A little further down the learned Judge observed: "It is not a commercial arrangement to sell a lottery ticket; for it is merely the acceptance of money or the promise of money for a chance. In this case the purchase of a lottery ticket merely founds a hope that something will happen in Tasmania to benefit the purchaser." Naturally enough learned counsel for the app....
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....(L.R. (1950) A.C. 235) commonly called the Bank case where it was held that s. 46 of the Banking Act, 1947, was invalid as offending against s. 92 of the Australian Constitution. Sub-section (1) of s. 46 provided that a private bank should not, after the commencement of the Act, carry on banking business in Australia except as required by the section. Subsection (2) laid down that each private bank should carry on banking business in Australia and should not, except on appropriate grounds, cease to provide any facility or service provided by it in the course of its banking business on the fifteenth day of August one thousand nine hundred and forty seven. Sub-section (4) authorised that the Treasurer might, by notice published in the gazette and given in writing to a private bank, require that private bank to cease, upon a date specified in the notice, carrying on business in Australia. Sub-section (8) provided that upon and after the date specified in a notice under sub-s. (4) the private bank to which that notice was given should not carry on banking business in Australia. It also provided a penalty of pound 10,000 for each day on which the contravention occurred. The questi....
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....at every case must be judged on its own facts and in its own setting of time and circumstances, and that it might be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation, and that inter-State trade, commerce and intercourse thus prohibited and thus monopolised remained absolutely free. His Lordship further added that, regulation of trade might clearly take the form of denying certain activities to persons by age or circumstances unfit to perform them or of excluding from passage across the frontier of a State creatures or things calculated to injure its citizens. Referring to the doctrine of "pith and substance" his Lordship observed that it, no doubt, raised in convenient form an appropriate question in cases where the real issue was one of subject matter as when the point was whether a particular piece of legislation was a law in respect of some subject within the permitted field, but it might also serve a useful purpose in the process of deciding whether an enactment which worked some interference with trade, commerc....
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.... "No simple legislative expedient purporting to transmute trade and commerce into something else will remove it from the ambit of s. 92. But whilst asserting the width of the field in which s. 92 may operate it is necessary to observe that not every transaction which employs the forms of trade and commerce will, as trade and commerce, invoke its protection. The sale of stolen goods, when the transaction is juristically analysed, is no different from the sale of any other goods but can it be doubted that the Parliament of any State may prohibit the sale of stolen goods without infringing s. 92 of the Constitution ? The only feature which distinguishes such a transaction from trade and commerce as generally understood is to be found in the subject of the transaction; there is no difference in the means adopted for carrying it out. Yet it may be said that in essence such a transaction constitutes no part of trade and commerce as that expression is generally understood. Numerous examples of other transactions may be given, such as the sale of a forged passport, or, the sale of counterfeit money, which provoke the same comment and, although legislation prohibiting such transact....
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....ause, then neither the Congress nor the State Legislature can in any way control the same. In such circumstances, the Supreme Court of America thought it right to give a wide meaning to the word "commerce" so as to include gambling within the commerce clause and thereby enable the Congress to regulate and control the same. Thus in Champion v. Ames ([1903] 188 U.S. 321 ; 47 L. Ed. 492) the carriage of lottery tickets from 'one State to another by an express company was held to be inter-State commerce and the court upheld the law made by Congress which made such carriage an offence. In Hipolite Egg Co. v. United States ([1911] 220 U.S. 45 ; 55 L. Ed. 364) the Pure Food Act which prohibited the importation of adulterated food was upheld as an exercise of the power of the Congress to regulate commerce. The prohibition of transportation of women for immoral purposes from one State to another or to a foreign, land has also been held to be within the commerce clause (see Hoke v. United States ([1913] 227 U.S. 308 ; 57 L. Ed. 523). SO has the prohibition of obscene literature and articles for immoral use. Reference has also been made to the cases of United States v. Kahriger (....
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....he interest of the general public reasonable restrictions on the exercise of the rights guaranteed and declared by Art. 19 (1) (g) and Art. 301. As one of us said in P. P. Kutti Keya v. The State of Madras (A.I.R. (1954) mad. 621) the framers of our Constitution, being aware of the problems with which the Australian Government had been confronted by reason of s. 92, sought to solve them by enacting limitations in Part XIII itself on the freedom guaranteed in Art. 301. Our task, therefore, will be to interpret our Constitution and ascertain whether the prize competitions falling within the definition of the impugned Act, all of which are of a gambling nature, can be said to be a "trade or business" within the meaning of Art. 19(1) (g) or "trade, commerce and intercourse " within the meaning of Art. 301 of our Constitution. 43. The scheme of our Constitution, as already indicated, is to protect the freedom of each individual citizen to carry on his trade or business. This it does by Art. 19(1)(g). This guaranteed right is, however, subject to Art. 19(6) which protects a law which imposes, in the interest of the general public, reasonable restrictions on the exercise of the fund....
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....ies undertaken and carried on with a view to earning profit and the safeguard is provided in Art. 19(6) and Arts. 302-305. The proper approach to the task of construction of these provisions of our Constitution*, it is urged, is to start with absolute freedom and then to permit the State to cut it down, if necessary, by restrictions which may even extend to total prohibition. On this argument it will follow that criminal activities undertaken and carried on with a view to earning profit will be protected as fundamental rights until they are restricted by law. Thus there will be a guaranteed right to carry on a business of hiring out goondas to commit assault or even murder, of housebreaking, of selling obscene pictures, of trafficking in women and so on until the law curbs or stops such activities. This appears to us to be completely unrealistic and incongruous. We have no doubt that there are certainactivities which can under no circumstance be regarded as trade or business or commerce although the usual forms and instruments are employed therein. To exclude those activities from the meaning of those words is not to cut down their meaning at all but to say only that they are....
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....o wins, thickly anointed with the player's fairest good. 10 The gambler's wife is left forlorn and wretched: the mother mourns the son who wanders homeless. In constant fear, in debt, and seeking riches, he goes by night unto the home of others. 11 Play not with dice: no, cultivate thy corn-land. Enjoy the gain, and deem that wealth sufficient. There are thy cattle, there thy wife, O gambler. So this good Savitar himself hath told me." 46. The Mahabharata deprecates gambling by depicting the woeful conditions of the Pandavas who had gambled away their kingdom. Manu forbade gambling altogether. Verse 221 advises the king to exclude from his realm gambling and betting, for those two vices cause the destruction of the kingdom of princes. Verse 224 enjoins upon the king the duty to corporally punish all those persons who either gamble or bet or provide an opportunity for it. Verse 225 calls upon the king to instantly banish all gamblers from his town. In verse 226 the gamblers are described as secret thieves who constantly harass the good subjects by their forbidden practices. Verse 227 calls gambling a vice causing great enmity and advises wise men not ....
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....granted to other litigants. The Scottish courts, however, have always refused to recognise the validity of wagering contracts and have held that sponsiones ludicroe, as they style such contracts, are void by the Common Law of Scotland. Gambling and Betting Act, 1664 (16 Car. 11, c. 7) was directed against fraudulent and excessive gambling and betting at games or sports. This was followed by the Gaming Act of 1710 (9 Anne.c. 19). The Marine Insurance Act 1745 (19 Geo. 11 C. 37) for the first time prohibited wagering policies on risks connected with British shipping. This was supplemented by the Marine -Insurance Act 1788 (28 Geo. III c. 56). The Life Insurance Act, 1774 (14 Geo. III c. 48) though not intended to prohibit wagering in general, prohibited wagering under the cloak- of a mercantile document which purported to be a contract of insurance. Then came the Gaming Act of 1845 (8 and 9 Vict. c. 109) which for the first time declared all contracts made by way of gaming or wagering void irrespective of their form or subject-matter. The provisions of this Act were adopted by our Act XXI of 1948 as here in before mentioned. The Gaming Act of 1892 (55 and 56 Viet. c. 9) further....
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....intercourse". We are, however, clearly of opinion that whatever else may or may not be regarded as falling within the meaning of these words, gambling cannot certainly be taken as one of them. We are convinced and satisfied that the real purpose of Arts. 19(1) (g) and 301 could not possibly have been to guarantee or declare the freedom of gambling. Gambling activities from their very nature and in essence are extra-commercium although the external forms, formalities and instruments of trade may be employed and they are not protected either by Art. 19 (1) (g) or Art. 301 of our Constitution. 51. The Court of Appeal; we have already said, took the view that it was not open to the State, which had not thought fit to prohibit these prize competitions but had sought to make a profit out of them by levying a tax, to contend at the same time that it was illegal or was not a "trade" at all. But as pointed out in United States v. Kahrigar (345 U.S. 22; 97 L. Ed. 754), the fact of issuing a licence or imposing a tax means nothing except that the licensee shall be subject to no penalties under the law if he pays it. Lewis v. United States of America (348 U.S. 49 ; 99 L. Ed- 475) also re....
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....course as such, for the criterion of its application is the specific gambling nature of the transaction which it restricts. The purpose of the Act is not to restrict anything which brings the transactions under the description of trade, commerce or intercourse. In other words, the Act is in pith and substance an Act with respect to betting and gambling. To control and restrict betting and gambling is not to interfere with trade, commerce or intercourse as such but to keep the flow of trade, commerce and intercourse free and unpolluted and to save it from anti-social activities. In our opinion, therefore, the impugned Act deals with gambling which is not trade, commerce or business and, therefore, the validity of the Act has not to be decided by the yardstick of reasonableness and public interest laid down in Arts. 19(6) and 304. The appeal against the stringency and harshness, if any, of the law does not lie to a court of law. 53. In the view we have taken, it is not necessary for us to consider or express any opinion on this occasion as to the vexed question whether restriction, as con. templated in Arts. 19(6) and 304(b), may extend to total prohibition and this is so be....