Judgment :- Some of the points that arise for decision in these cases are common and therefore, they are heard and disposed of together, by this common Judgment. These case arise under the Kerala Tax on Paper Lotteries Act, 2005 (Act No.20 of 2005). The writ petitioners are engaged in the sale of tickets of paper lotteries, conducted by the State of Sikkim and the Royal Government of Bhutan respectively. They are having registration as promoters under the above Act. The said registration is sought to be cancelled, on the ground that their lotteries are run in violation of section 4 of the cancelled, on the ground that their lotteries are run in violation of Section 4 of the Lotteries Regulation Act, 1998 (Central Act 17 of 1998). The cancellation of the registration will result in prohibition of sale of their lottery tickets in the Kerala State. Hence these Writ Petitins, seeking appropriate reliefs. The pleadings in them are summarized below: Writ Petition (C) No.30355/06 2. The petitioner is engaged in the distribution and marketing of the tickets of lotteries, organized by the State of Sikkim, in the State of Kerala, M/s. Martin Lottery Agencies Limited, is the sole distributor of the lotteries of the Stae of Sikkim. The said agency has appointed M/s. Best & Co., as the main stockist of the said Lotteries, which, in turn, has appointed the petitioner as the Marketing Agent of those lotteries in Kerala. Ext.P1 would show that the petitioner is the stockist for selling the Sikkim State Lotteries in the State of Kerala. It is a certificate, issued by the Director of Lotteries, Government of Sikkim. The petitioner, the lottery run by the State of Sikkim is conducted, strictly in accordance with the provisions of the Lotteries (Regulation) Act, 1998. The State of Kerala is competitor in the field of sale of tickets of lotteries. The State is running its own lotteries. So, it has been trying to stop the sales of the tickets of lotteries of other States in Kerala. The Kerala Government, in exercise of its power under Regulation 12 of the Lotteries (Regulation) Act 1998, framed Kerala State Lotteries and On-line Lotteries (Regulation) Rules, 2003. Sub-rules (3) and (10) of Rule 24 of the Rules enabled the Kerala Government to interfere with and suspend the sale of tickets of lotteries, run by other State Governments. The Kerala Government, in exercise of its power under Regulation 12 of the Lotteries (Regulation) Act 1998, framed Kerala State Lotteries and On-line Lotteries (Regulation) Rules, 2003. Sub-rules (3) and (10) of Rule 24 of the Rules enabled the Kerala Government to interfere with and suspend the sale of tickets of lotteries, run by other State Governments. The affected parties challenged the said provisions run by other State Governments. The affected parties challenged the said provisions in the Rules, before this Court. Though, the Writ Petition was dismissed, a Division Bench of this Court, in WA No.2044/03, passed Ext.P2 interim order dated 19-12-2003, staying the operation of the above said sub-rules. Later, the Writ Appeal itself was dismissed. On appeal, the Apex court admitted the appeal and resorted Ext.P2 interim order, as the interim order of the Apex Court. When the Police Officials of the State tried to prosecute the agents, selling the tickets of the lotteries of Sikkim and Bhutan Government, the Supreme Court intervened and restrained the State of Kerala from prosecuting them. 3. Later, the Kerala Government banned all the lotteries and made the State a lottery-free-zone. Still later, it decided to start paper lotteries by Ext.P8 notification and also allowed other States to sell their paper lottery tickets in the State of Kerala. In the meantime, the Kerala Tax on Paper Lotteries Act, 2005 was enforced in the State of Kerala. On 20.04.2005, it also promulgated the Kerala Paper Lotteries (Regulation) Rules 2005, which is produced as Ext.P8. The petitioner narrates the above facts to show that the Kerala Government was trying everything within its powers, to prevent the sale of lotteries of other States in Kerala. 4. Now, for the sale of lotteries in Kerala, it is mandatory to get registration under the Kerala Tax on Paper Lotteries Act, 2005 (hereinafter referred to as the Kerala Act). The petitioner applied for registration under Section 7 of the Kerala Act. Ext.P9 is the registration certificate dated 07.07.2005, granted to him. Thereafter, he was paying tax regularly and selling the tickets of the lotteries of the State of Sikkim in the State of Kerala. Ext.P10 is the statement, showing the payments made by the petitioner from time to time. 5. While so, he was served with Ext.p11 notice dated 27.10.2006, calling upon him to show cause, why his registration certificate should not be cancelled. Ext.P10 is the statement, showing the payments made by the petitioner from time to time. 5. While so, he was served with Ext.p11 notice dated 27.10.2006, calling upon him to show cause, why his registration certificate should not be cancelled. The main allegations stated in Ext.P11 are concerning violation of Section 4 of the Lotteries (Regulation) Act, 1998 (hereinafter referred to as the Central Act). The petitioner submits, the grounds mentioned in the said notice are not grounds available to the State, to cancel the registration. Going by the scheme of the Act, the only ground for cancellation of the registration is non-payment of the tax. With the issuance of Ext.P11 notice, the authorities under the Kerala Act declined to accept advance tax from the petitioner. They maintained the stand that since it is proposed to cancel his registration, no tax could be received from him. Without paying the tax, lottery tickets cannot be transported or sold within the State. The petitioner filed a detailed reply to Ext.P11 notice, which is produced as Ext.P15. He challenged in his reply, the very jurisdiction of the officials of the State to issue the notice. He also specifically denied all the allegations in Ext.P11. Thereafter, this Writ Petition was filed, challenging Ext.P11 notice and also seeking a direction to respondent 1 to 4 and 6 to receive advance tax from the petitioner from time to time. He also seeks a direction to the above respondents, not to interfere with the transport or sale of tickets of lotteries of the State of Sikkim in the State of Kerala. 6. The main grounds stated in the Writ Petition are the following: The impugned notice violates the fundamental rights of the petitioner, guaranteed under Articles 14 and 19 of the Constitution of India. The notice is issued without jurisdiction. It is ultra vires of the provisions of the Constitution and also the provisions of the ultra vires of the provisions of the Constitution and also the provisions of the Central Act. The jurisdictional facts, which enable the State Government to cancel the registration, are absent in this case. The State is acting as the complainant, prosecutor and the Judge. The report of the Director of Vigilance and Anti Corruption Bureau, obtained behind the back of the petitioner, cannot be relied on against him. The jurisdictional facts, which enable the State Government to cancel the registration, are absent in this case. The State is acting as the complainant, prosecutor and the Judge. The report of the Director of Vigilance and Anti Corruption Bureau, obtained behind the back of the petitioner, cannot be relied on against him. The decision pursuant to the notice is pre-determined and issuance of the notice is only an empty formality. The past conduct of the State of Kerala would show that it is bent on stopping the business of the petitioner under one guise or other. So, the action is vitiated by mala fides It is also arbitrary. The allegations regarding violation of Section 4 of the Central Act, can be looked into, only by the Central Government. The State or its Officers have no jurisdiction to interfere in the matter, in view of entry 40 of list I of the 7th Schedule of the Constitution of India. The action of the Stat of Kerala is contrary to the statement made by it before the Honourable Supreme Court that no action will be taken against the lotteries of other States, for violation of Section 4 of the Central Act. Invoking the provisions of the Kerala Act, it is trying to prohibit the sale of tickets of lotteries, run by other States. It is tying to do something indirectly, which, it cannot do directly. On the above and other incidental grounds, the petitioner prays for granting the reliefs, sought in the Writ Petition. 7. A counter affidavit has been filed in the Writ Petition, on behalf of respondents 1 to 3, 5 and 6. According to them, the petitioner cannot be treated as a promoter of the lotteries of the State of Sikkim. He has been granted registration under Section 7 of the Kerala Act, on the assumption that Sikkim lotteries the definition of paper lotteries, under Section 2(j) of the Kerala Act. For getting the registration, the paper lottery of the State of Sikkim must be run in accordance with Section 4 of the Central Act. Further, going by the definition of promoter in Section 4 of the Central Act. Further, going by the definition of promoter in Section 2(1) of the Kerala Act, he must be one appointed by the State Government concerned. Further, going by the definition of promoter in Section 4 of the Central Act. Further, going by the definition of promoter in Section 2(1) of the Kerala Act, he must be one appointed by the State Government concerned. If it is found that the lottery is not run in accordance with Section 4 of the Central At or that he is not appointed by the State of Sikkim, the authorities under the Kerala Act have inherent jurisdiction to cancel the registration. The contention that the assessing authority has no power to cancel the registration, is unsustainable. The Government received several complaints against the conduct of paper lotteries of other States. Therefore, the Vigilance and Anti Corruption Bureau was asked to conduct an enquiry into the matter. The Government obtained a report, confirming the various irregularities. Committed by the Sikkim State Lotteries. The report showed that the lotteries are run in gross violation of Section 4 of the Central Act and therefore, the impugned notice was issued. The various orders of the Supreme Court, mentioned in the Writ petition are those concerning on-line lotteries and also under the Kerala Stat Lotteries and On-line Lotteries (Regulation)Rules, 2003. They have nothing to do with the action taken under the Kerala Act, which is enacted under Entry 62 of List II of the 7th Schedule of the Constitution of India. So, the official respondents pray for dismissal of the Wit Petition. Writ Petition (C) No.30176/06 8. The petitioner is a citizen of India, engaged in the sale of paper lotteries, run by the Royal Government of Bhutan, on the strength of Ext.p1 agreement, executed between the Royal Government of Bhutan and the Government of the Republic India. The tickets of Bhutan lotteries are sold in the whole of India. They are printed under the direct instance of the competent Officer of the Royal Government of Bhutan. The sale proceeds of the tickets are credited to the account of the said Government. The lotteries are run in compliance with the provisions of the Lotteries (Regulation0 Act, 1998 (hereinafter referred to as the Central Act). the Bhutan Government has appointed M/s. Sanjay Jayantilal and Co., as the sole marketing agents of its lotteries with power to further appoint the distributors, sole selling agents, stockists etc., to sell its tickets. The lotteries are run in compliance with the provisions of the Lotteries (Regulation0 Act, 1998 (hereinafter referred to as the Central Act). the Bhutan Government has appointed M/s. Sanjay Jayantilal and Co., as the sole marketing agents of its lotteries with power to further appoint the distributors, sole selling agents, stockists etc., to sell its tickets. The said firm has appointed M/s. Sri Krishna Agencies, as the main stockist, which, in turn, has appointed the petitioner, as per agreement dated 14.04.2005,as the main stockist in the State of Kerala, for the sale of Bhutan Data series and the Bhutan Sri Deepam series of Weekly lotteries. The petitioner submits, by virtue of Ext.P1 treaty and also the decision of the Apex Court in B.R. Enterprises v. State of U.P. (1999) 9 SCC 700), the Bhutan lottery tickets can be sold in any State in India, including the State of Kerala. In view of Ext.p2 certificate issued by the Royal Government of Bhutan, the petitioner claims, he is the promoter of Bhutan Lotteries, for the purpose of the Kerala Act, in the State. He has been granted Ext.P3 registration certificate, under Section 7 of the Kerala Act, for the year 2005-06. As per Ext.P4, it has been renewed for the year 2006-07. 9. The petitioner submits, he has been regularly paying the tax payable under the Act. As per Section 10 of the Act, the tax has to be paid in advance and if the registration is cancelled, the promoter will not be entitled to sell lottery tickets within the State. The State of Kerala has been trying to obstruct the sale of tickets of Bhutan Lotteries in Kerala. As part of the said action, he has been served with Ext.P5 notice, directing him to produce the agreement entered into between the Royal Government of Bhutan and the main stockist, for distribution of Bhutan State Lotteries. It was followed by Ext.P6 notice, stating that in view of the materials produced, the petitioner cannot be treated as a promoter and therefore, it is proposed to cancel his registration. Thereupon, Ext.P7 communication from the Government of Bhutan was produced, stating that the petitioner is the promoter to sell the tickets of the Royal Government of Bhutan in the State of Kerala. Thereupon, Ext.P7 communication from the Government of Bhutan was produced, stating that the petitioner is the promoter to sell the tickets of the Royal Government of Bhutan in the State of Kerala. It was followed by Ext.P8 letter, addressed by the Bhutan Government to the commissioner of Commercial Taxes, to retain the registration of the petitioner and allow him to remit the tax the due under the Kerala Act. The Royal Government of Bhutan also addressed Ext.P9 letter to the Assistant Commissioner of Commercial Taxes, reiterating that the petitioner is the promoter of Bhutan Lotteries, for the purpose of the Kerala Act, in the State. While so, the Assistant Commissioner of Sales Tax, Special Circle I, Ernakulam, issued Ext.P10 communication dated 04.08.2006, calling upon the petitioner to furnish certain details. One of the details. One of the details called for, was the main agreement entered into between the Royal Government of Bhutan and M/s. Sanjay Jayantilal Co., the main stockist. The petitioner submits, on forwarding that letter to the Bhutan Government, the said Government, by Ext.P11, informed the Assistant Commissioner that the main agreement entered into between the Royal Government of Bhutan and M/s. Sanjay Jayantilal and Co. cannot be shared with any State Government, since it is of confidential nature and is of commercial value. In the background of the above communications, the officials of the State Government declined to accept tax from the petitioner. Feeling aggrieved by the above harassment, the petitioner filed Writ Petitioner. Feeling aggrieved by the above harassment, the petitioner filed Writ Petition (C) No.20713/06 before this Court, seeking a direction to the 3rd respondent to accept the advance tax due for the month of September 2006. Immediately after the filing of that Writ Petition, the tax for the month of September was received and therefore, the Writ Petition was withdrawn on 07.08.2006. Thereafter, the advance tax dur for the months of October and November was also received without demur. 10. When the petitioner attempted to pay the tax for the month of December 2006, he was served with Ext.P13 notice dated 27.10.2006, calling upon him to show cause, why the registration granted to him under Section 7 of the Kerala Act should not be cancelled. The main ground taken in Ext.P13 is that the lottery is run, flouting all the stipulations contained in Section 4 of the Central Act. The main ground taken in Ext.P13 is that the lottery is run, flouting all the stipulations contained in Section 4 of the Central Act. Simultaneously, the 3rd respondent declined to accept the advance tax paid by the petitioner. The petitioner submits, Ext.P13 is issued without jurisdiction. On the basis of violation of Section 4 of the Central Act, the State Government has no power or authority to initiate any proceedings against the conduct of the lottery. Only the Central Government is authorized to do that. The petitioner also refers to the challenge to the provisions of the Kerala State Lotteries and On-line Lotteries (Regulation) Rules, 2003, made before this Court and the orders of this Court and the Apex court on them and also about the connected cases. In view of the intervention of the Apex Court, the State cannot take any action against the sale of lottery tickets of the Bhutan Government in Kerala. While so, the Finance Minister of the State of Kerala made a public announcement on 18.11.2006, stating that the Kerala Government will stop collecting advance tax from the promoter of Bhutan Lotteries. So, the action in issuing Ext.P.-3 is pre-mediated, it is submitted. The petitioner submitted a detailed reply to Ext.P13, which is produced as Ext.P20. In the said reply, the petitioner has challenged the very jurisdiction of the Kerala Government to prohibit the sale of Bhutan lotteries. All the allegations raised against the lottery are also specifically answered. Feeling aggrieved by Ext.P13 and also Section 10 (4) of the Kerala Act, which provides for cancellation of the registration of promoters, the petitioner has filed this Writ Petition, seeking the following “(i) declare that Sec.10(4) of the Kerala Tax on Paper Lotteries Act, 2005 insofar as it provides that cancellation of registration of ‘promoters’ automatically restrains the right of another State Government or Country to sell their lotteries within the State of Kerala, is beyond the legislative powers of the State of Kerala, is inconsistent with the provisions of the Lotteries (Regulation), Act, 1998, is vague, arbitrary, discriminatory and ultra vires the provisions of Article 298 of the Constitution. (ii) issue a writ in the nature of certiorari or any other such appropriate writ, order or direction, calling for the records, leading up to Ext.P13 notice issued by the 3rd respondent and to quash the same as being without jurisdiction, competence or authority. (ii) issue a writ in the nature of certiorari or any other such appropriate writ, order or direction, calling for the records, leading up to Ext.P13 notice issued by the 3rd respondent and to quash the same as being without jurisdiction, competence or authority. (iii) issue a writ in the nature of mandamus or any other such appropriate writ, order or direction, commanding the 3rd respondent to continue to receive the tax under the Kerala Tax on Paper Lotteries Act, 2005, on the lottery schemes to be marked by the petitioner from December 2006 onwards as promoter of the lotteries of the Royal government of Bhutan.” 11. The main grounds urged in the Writ Petition are the following: The actions of the 3rd respondent are without jurisdiction. They are illegal, arbitrary and discriminatory. The petitioner is the legally appointed promoter of the lotteries of Bhutan in Kerala. Ext.P1 treaty, which was renewed from time to time, enable the Bhutan Government to sell its lotteries in the State of Kerala also. The lotteries organized by the Royal Government of Bhutan do not come under the purview of the Lotteries (Regulation) Act, 1998. But nevertheless, they are conducted as per the guidelines set out under Section 4 of the said Act. Ext.P13, in effect, prevents the sale of tickets of Bhuta lotteries, in the State of Kerala. The State has no jurisdiction to prohibit the sale of tickets of Bhutan Lotteries. The registration granted once, by the 3rd respondent, cannot be cancelled by him. There is no power of review, conferred on him by the Kerala Act. The petitioner has not committed any default in paying the tax. The non-payment of tax alone is the ground available under the Kerala Act to cancel the registration. The refusal by the competent authority to receive the tax, is to make out a ruse to cancel his registration. If the registration is suddenly cancelled, irreparable injury will be caused, a s tickets worth Rs.75 crores have already been distributed to stockists, agents and retailers. He has already purchased tickets worth Rs.85 crores from the 4th respondent, which are in transit. Under Section 5 of the Central Act, no State Governments, unless the State concerned is a lottery-free-zone. So, something, which cannot be directly done, is sought to be done, indirectly. He has already purchased tickets worth Rs.85 crores from the 4th respondent, which are in transit. Under Section 5 of the Central Act, no State Governments, unless the State concerned is a lottery-free-zone. So, something, which cannot be directly done, is sought to be done, indirectly. The impugned actions violate the rights of the petitioner, guaranteed under Articles 14, 19 and 301 to 304 of the Constitution of India. The enquiry report of the Vigilance Department is obtained, behind the back of the petitioner. The same cannot be used to cancel his registration. On the strength of Ext.P1 treaty, which was renewed from time to time, the Royal Government of Bhutan is entitled to sell the tickets of its lottery in the Kerala State also. So, the impugned notice has been issued without jurisdiction. Section 10(4) of the Kerala Tax on paper Lotteries Act, 2005 is a piece of colourable legislation, as it seeks to confer power on the State Government to prohibit the sale of lottery tickets of other States. The State has arrogated to itself, the power conferred on the Central Government under the provisions of the Central Act. Section 10(4) of the Kerala Act is an abuse of the legislative powers. The present attempt of the Kerala Government is to over-reach the interim orders of the attempt of the Kerala Government is to over-reach the interim orders of the Honourable Supreme court. On the above and other incidental grounds, the petitioner prays for granting all the reliefs in the Writ Petition. 12. I heard Shri. Joseph Vellappally, learned Senior Counsel and Shri. A. kumar, learned counsel appearing for the petitioner in Writ Petition (C) No.30355/06, Smt. Nalini Chidambaram, Senior Advocate, along with Shri. Harisankar V. Menon, learned counsel, appearing for the Director of Sikkim State Lotteries ad the learned Special Government Pleader (Taxes) Shri V.V. Asokan, appearing for respondents 1 to 6. In Writ Petition (C) No.30176/06, Shri Soli, J. Sorabjee, Senior Advocate, Shri. M. Tpathrose Mathai and Shri. Anil Sivaraman, appearing for the petitioner, Shri V.V. Asokan, learned Special Government Pleader (Taxes) appearing for respondents 1 to 3, Shri P. Ravindran, leaned counsel appearing for the 4th respondent and also Shri. Muraleedharan, learned counsel appearing for the Union of India, were heard. 13. Learned Senior Counsel Shri.Soli J. Sorabji led the arguments on behalf of the petitioners. 13. Learned Senior Counsel Shri.Soli J. Sorabji led the arguments on behalf of the petitioners. The learned Senior Counsel submitted that the petitioner in Writ Petition (C) No.30176/06 has been validly appointed as a dealer to sell the tickets of lotteries of the Royal Government of Bhutan. The sale is made on the strength of Ext.P1 bi-lateral treaty, which has been subsequently renewed also. The petitioner is a promoter of those lotteries for the purpose of Section 2(1) of the Kerala Act and accordingly, he has been granted the registration under Section 7 of the said Act, which is valid upto 31.03.2007. The petitioner has been regularly paying the tax under Section 10 of the Kerala Act. The Kerala Government is organizing and conducting its own lotteries. So, Kerala is not a lottery-free zone-. Therefore, in the light of the decision of the Apex Court in B.R. Enterprises’ case (supra), the State cannot prohibit the sale of lotteries of other States. In view of the interim order of the Apex Court also, the State cannot prohibit the sale of lotteries of other States. Therefore, to get over the said interim order, the provisions of the Kerala Act are pressed into service. The impugned notice Ext.P13 is issued for the alleged non-compliance with Section 4 of the Central Act and also for the non-production of the agreement between the Royal Government of Bhutan and the main stockist of its lotteries. By refusing to receive advance tax under the Kerala Act, the Bhuttan Lotteries are sought to be prohibited. The show-cause notice has been issued without jurisdiction. The learned Senior Counsel further submitted that the Kerala Government has no power to adjudicate upon the non-compliance of Section 4 of the Central Act. So, the very basis of the impugned show-cause notice for cancellation of the registration is unsustainable. The State cannot be conceded inherent power to cancel the registration granted under Section 7 of the Kerala Act. The power to cancel the registration is specifically conferred under Section 10(4) of the Kerala Act on the Ground of non-payment of tax. The power to grant registration is a quasi-judicial power. So, an order issued in exercise of a quasi-judicial power, cannot be cancelled, invoking Section 21 of the General Clauses Act. The power to cancel the registration is specifically conferred under Section 10(4) of the Kerala Act on the Ground of non-payment of tax. The power to grant registration is a quasi-judicial power. So, an order issued in exercise of a quasi-judicial power, cannot be cancelled, invoking Section 21 of the General Clauses Act. In support of this submission, reliance is placed on the decisions of the Apex Court in State of MP v. Ajay Singh (1993 (1) SCC 302) and Indian National Congress v. Institute of Social Welfare (2000(5) SCC 685). Section 4 of the Central Act cannot be treated as having been incorporated in the State Act, in the absence of any express provision to that effect, Alternatively, it is submitted that the provisions of Section 4 of the Central Act, cannot be enforced by the State. The executive power of the state will not extend to the subjects under Entry 40 of list I of the 7th Schedule of the Constitution of India. Invoking Section 10(4) of the Kerala, To the extent, Section 10(4) authorizes the Kerala Government to prohibit lotteries of other States is ultra vires an unauthorized. Entries 34 and62 in List II do not confer power to tax a Union or State Lottery. The non-furnishing of the agreement executed between the Royal Government of Bhutan and the distributor of its lottery tickets, cannot be a ground to cancel the registration of the petitioner. The Royal Government of Bhutan has issued certificates Exts.P2 and P7, stating that the petitioner is a promoter for the sale of lotteries, organized by the Royal Government of Bhutan, within the State of Kerala. When there is direct authorization by the Royal Government of Bhutan a further enquiry into the matter is unnecessary. The status of Bhutan Lotteries is the same as that of any other State Lotteries, for the purpose o the Kerala Act, for levy and collection of tax. Unless the State of Kerala is a lottery-free-zone, the lotteries of the Royal Government of Bhutan cannot be prohibited, invoking the provisions of the Kerala Act. The issuance of the impugned notice is vitiated by mala fides, it is submitted. 14. Shri. Joseph Vellappally, learned Senior Counsel, appearing for the petitioner in Writ Petition © No.30355/06 supported the submissions of the learned Senior Counsel Shri. Soli.J. Sorabji. The issuance of the impugned notice is vitiated by mala fides, it is submitted. 14. Shri. Joseph Vellappally, learned Senior Counsel, appearing for the petitioner in Writ Petition © No.30355/06 supported the submissions of the learned Senior Counsel Shri. Soli.J. Sorabji. Relying on the decision of the Apex Court in H. Anrai v. State of Maharashtra (1984 (2) SCC 292), it is submitted that in view of Entry 40, the State Legislature cannot legislate on the lotteries organized by the Government of India or the Government of a State. Entries 34 and 62 cannot be pressed into service to regulate or control the lotteries run by other States. The Kerala Act has been enacted for levy and collection of tax. The incidental or ancillary powers can be conceded only for the purpose of collection of tax. The prohibition of lotteries will only frustrate that object. The Kerala Act, which is a taxation law, cannot be pressed into service, to regulate the running of lotteries. The authorities can only verify the taxing event with the sole purpose of ensuring compliance with the taxation law for collection and levy of tax. The Registration certificate can be cancelled only for non-payment of tax. The provisions of the General Clauses Act cannot be pressed into service for the purpose. The Vigilance report obtained behind the back of the petitioner cannot be pressed into service against him. The power to prohibit the lotteries run by the State of Sikkim vests only with the Central Government. The actions of the State and its officers are against the interim order passed by the Apex Court. The impugned notice runs counter to the provisions of the Kerala Act also. In view of the decisions of the Apex Court in Indian National Congress’ and Ajay Singh’ cases (supra), the registration once granted, cannot be cancelled, invoking the provisions of the General Clauses Act. The learned Senior Counsel Smt. Nalini Chidambaram, who appeared for the Director of Lotteries, Government of Sikkim, in Writ Petition (c) No.30355/06 supported the contentions of the learned Senior Counsel for the petitioner. It was also pointed out by the learned Senior Counsel that the impugned notice is a fraudulent and colourable exercise of power, vested I the Officers under the Kerala Act. 15. It was also pointed out by the learned Senior Counsel that the impugned notice is a fraudulent and colourable exercise of power, vested I the Officers under the Kerala Act. 15. The learned Special Government Pleader for Taxes Shri. V.V. Asokan, who appeared for the Keral Government and its Officers, supported the impugned statutory provision as well as the impugned notices. He submitted that Section 10(4) of the State Act is constitutionally valid. According to him, the Central and State legislations occupy different fields and they relate to subjects in different lists. So, incidental trenching or overlapping into another field of legislation, would not be fatal or invalidate the State legislation. Therefore, Section 10(4) cannot be condemned as unconstitutional. Apart from the power under Section 10(4) of the Kerala Act, the power to grant registration includes the power to vary, modify, rescind, withdraw or cancel the registration, by virtue of Section 21 of he General Clauses Act and Section 20 of the Kerala Interpretation and General Clauses Act. It is also submitted that the decisions relied on by the petitioners to submit that the grant of registration being a quasi-judicial action, the same cannot be cancelled, invoking the provisions of the General Clauses Act, do not lay down any general proposition. The provisions of each statute have to be examined with reference to the provisions contained therein. The proposal to cancel the registration on the ground of violation of Section 4 of the Central Act is permissible, as it does not amount to prohibition of any lotteries. It is also submitted that the Bhutan Lotteries cannot claim the benefits enjoyed by other State Lotteries. The learned Special Government Pleader also submitted that what is under challenge is only a notice and therefore, the Writ submitted that what is under challenge is only a notice and therefore, the Writ Petitions are not maintainable. The learned Senior Counsel Shri. Pathrose Mathai and Shri. P. Ravindran answered the contentions of the learned Special Government Pleader on the maintainability of the Writ Petitions, they contended that the action being pre-meditated, the issuance of notice is only a formality. Further, the notice has been issued without jurisdiction. Even with the issuance of the notice, the official respondents have declined to accept tax and thereby, crippled the business of the petitioners. So, they have no other remedy then a to approach this Court. Further, the notice has been issued without jurisdiction. Even with the issuance of the notice, the official respondents have declined to accept tax and thereby, crippled the business of the petitioners. So, they have no other remedy then a to approach this Court. Having regard to the nature of the issues involved to be decided, the remedy under the Act is only illusory. Therefore, the petitioners are justified in approaching this Court directly, it is submitted. They distinguished the decisions relied on by the learned Government Pleader and prayed for granting all the reliefs sought in the Writ Petitions. 16. Before going into the rival contentions, it will be fruitful to refer to the relevant constitutional and statutory provisions and the decision of the Apex Court, interpreting some of those provisions. Entry 40 of list I of the 7the Schedule of the Constitution of India reads as follows: “Lotteries organized by the Government of India or the Government of a State.” In view of the above entry, the lotteries organized by the Central Government and the state Government are within the exclusive legislative jurisdiction of the Parliament. For long, the Central Government never chose to bring in any legislation under the said entry. Entries 34 and 62 of List II in the Seventh Schedule read as follows: “34. betting and Gambling.” “62. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.” Dealing with the above legislative entries, the Apex Court held in H. Anraj v. State of Maharashtra (1984 2 SCC 292) that the lotteries organized by the Government of India and the State Governments have been taken out from the legislative field, comprised by the expressions ‘betting’ and ‘gambling’ in Entry 34 of List I and is reserved to be dealt with by the Parliament. It was also held that “in view of Article 246(1) and (3) no legislature of a State can make a law, touching the lotteries, organized by the Government of India or the Government of a State.” The executive power of a Stat, by virtue o Article 298 extends to lotteries organized by itself and not to lotteries organized by other State Governments. In the said decision, the Apex Court upheld the views of the Andhra Pradesh High Court in L.B. Paradise Lottery Centre v. State of AP (AIR 1975 AP 50), wherein it was held that even if the lottery run by another State is illegal, one State cannot declare that the said lottery is unlawful and thereafter, ban the sale of tickets of that lottery in that State. The relevant portion of the judgment in H. Anraj’s case (supra) reads as follows: “It is then said that the permission granted to each State to conduct its lotteries is expressly subject to the condition that the tickets of the lottery shall not be sold in another State without the permission of the Government of that State. We have already pointed out that Article 298 of the Constitution extends the executive power of every State to the carrying on of any trade or business, even if such trade or business is one with respect of which Parliament alone has the exclusive power to make laws, subject to the stipulation that such executive power of the State shall be subject to Parliamentary legislation. It is true that in view of Entry 40 of List I of the Seventh Schedule to the Constitution, Parliament has exclusive power to make laws with respect to ‘Lotteries organized by the Government of India or the Government of a State’ that Article 73 of the Constitution extends the executive power of the Union to the matters with respect to which Parliament has power to make laws and therefore, the executive power of the Union must extend to the subject ‘Lotteries organized by the Government of India or the Government of a State’. But the executive power of the Union, by the very opening words of Article 73, is ‘subject to the provisions of this Constitution. It follows that the executive power of the Union with respect to lotteries orgnaised by the Government of a State has necessarily to be exercised subject to the provisions of the Constitution, including Article 298, which expressly extends the executive power of the State to the carrying on of any trade or business subject only to legislation by Parliament if the trade or business is not one with respect to which the State Legislature may make laws. It is to be noted that Article 298 does not open with the words ‘subject to the provisions of the Constitution’, as does Article 73. Reading and considering Articles 73 and 298 together, as they should indeed be read and considered, it is clear that the executive power of a State in the matter of carrying on any trade or business with respect to which the State Legislature may not make laws is subject to legislation by parliament, but is not subject to the executive power of the Union. That is why we mentioned earlier that the Government of a State is not required to obtain the permission of the Union Government in order to organize its lotteries, in the absence of Parliamentary legislation. Even assuming that such permission is necessary, we do not seek how a condition imposed by such permission that lottery tickets of one State may not be sold in another State may be enforced by the other State. The other State has no power to make laws in regard to the lotteries organized by the first State. Its executive power, by virtue of Article 298, extends to lotteries organized by itself but not to lotteries organized by the other State. If a State acts I breach of the condition imposed by the President while entrusting power under Article 258, it is open to the President to revoke the permission or to take such further or other action as may be constitutionally permissible, but it cannot possibly enable the Government of the other State to do a thing about it except to complain, perhaps, to the Union Government. The Government of India is quite obviously alive to the position that there is no way of enforcing the stipulation that lottery tickets of one State shall not be sold in another except by Parliament, making a law in that behalf. The awareness is revealed by the last sentence in the letter dated July 1, 1968, which says, ‘I am to add that in order to achieve this object, an amendment of Section 294-A IPC is being undertaken to make sale tickets, without the consent of the State Government concerned, a penal offence.’ The proposed amendment is yet to see the light of the day. 10. 10. A submission which appears to have found favour with the High Court of Bombay in Kamal Agency v. State of Maharashtra (AIR 1971 Bom 332) and the High Court of Madras in H.G. Jain v. State of T.N. (AIR 1973 Mad 402) was that in Entry 40 of List I and the respective local acts, a lottery organized by a State must be construed to refer to a lottery lawfully organized by a State and that if a lottery is not lawfully organised by a State and that if a lottery is not lawfully organised by a State, it would not fall within Entry 40 of List, I, but would fall under the head ‘gambling’ under entry 34 of List II and the State Legislature would then be empowered to legislate in respect of the same. Where the State Legislature could thus legislate, it was said, the State Government could take executive action in respect of lotteries organized by another State, if they were unlawful. The Gujarat and Andhra Pradesh High Courts have dissented from this view. In Special Civil Application No.1309 of 1970 Bhagwati, C.J, presiding over a Division Bench of the Gujarat High Court and in L.B. Paradise Lottery Centre v. State of AP (AIR 1975 AP 50), one of us sitting singly in the Andhra Pradesh High Court have explained that there is no justification for first reading the word ‘lawfully’ into Entry 40 of List I and then proceeding to interpret the express ‘Lottery lawfully organised’ as meaning a lottery organized pursuant to the entrustment of executive power of the Union Under Article 258 of the Constitution. It was observed, ‘legislative power cannot be fed into Entry 34, by feeding the word ‘lawful’ into Entry 40 of List I and thus artificially restricting the scope of Entry 40. It was observed, ‘legislative power cannot be fed into Entry 34, by feeding the word ‘lawful’ into Entry 40 of List I and thus artificially restricting the scope of Entry 40. It was pointed out that if the Government of a State organized a lottery without the entrustment of executive power as contemplated by Article 258 or in disregard or defiance of any condition that may have been imposed while entrusting executive power under Article 258, it would never be a matter for the Legislature of one State to take upon itself the power to declare unlawful the lottery run by the Government of another State; and even less so could the Government of another State and thereafter ban the sale of the tickets of the lotteries organized by that State. In the Madras case, it was also observed that the entrustment order carried with it, all powers which the State Government might take to realise the maximum collection. We cannot subscribe to this view. That would really amount to the entrustment of vital legislative powers to the State Government which would be constitutionally impermissible. We do not think it necessary to refer in any further detail to the decisions of the Gujarat, Andhra Pradesh, Bombay and Madras decision except to say that we generally agree with the reasoning in the Gujarat and Andhra Pradesh decision and disagree with the reasoning in the Bombay and Madras decisions. In the result, we allow the writ Petitions and direct the State of Maharashtra to forbear from giving effect to the ban on the sale or distribution of tickets of lotteries organized by other States.” 17. The Constitution Bench of the Apex Court, in State of Haryana v. Suman Enterprises ((1994) 4 SCC 217), has held that the State Government is competent to ban the sale of tickets of lotteries, “authorized” by other States, but, not of lotteries “organized” by other States. The Apex Court also laid down tests to determine whether a particular lottery is organized or authorized by a State. The Apex Court also laid down tests to determine whether a particular lottery is organized or authorized by a State. The relevant portion of the order of the Honourable Supreme Court in that case reads as follows: “In the present case, we have examined, prima facie, whether the lottery claimed to have been ‘organised’ by the State of Sikkim can be said to be a lottery ‘organised’ by the State of Sikkim and not merely authorized by it, authorizing the so-called ‘Agents’ themselves to organize the lottery. We have examined this in the context of the question whether the earlier interim order granted by this Court should continue or not, till the final disposal of the main cases, Prima facie, it appears to us that the concept of a lottery ‘organised’ by a State would require certain basic and essential concomitants to be satisfied, as, indeed, members of the public when investing their money in such a lottery proceed on a trust and on certain assumptions as to the genuineness, bona fides, safety, security, the rectitude of administration etc., associated with governmental functioning. If some of the basic functions charaterising a State-organised lottery are delegated or abdicated by the State, this public trust is impaired. The first o those requirements is that the tickets which bear the imprint and logo of the State must be printed by or directly at the instance of the State Government so as to ensure their authenticity and genuineness and further to ensure that any possibility of duplication of the tickets and sale of fake tickets is provided against and rendered impossible. Secondly, the State itself must sell the tickets though, if it necessary or proper so to do, through a sole distributor or selling agent or several agents or distributors under terms and conditions regulated by the agreement reached between the parties. The sale proceeds o the tickets either sold in retail or wholesale shall be credited to the funds of the Government. Thirdly, the draws for selecting the prize-winning tickets must be conducted by the State itself, irrespective of the size of the money. Fourthly, if any prize money is unclaimed or is otherwise not distributed by way of prize, it must revert to and become the property of the State Government. Thirdly, the draws for selecting the prize-winning tickets must be conducted by the State itself, irrespective of the size of the money. Fourthly, if any prize money is unclaimed or is otherwise not distributed by way of prize, it must revert to and become the property of the State Government. These, prima facie, appear to us to be the minimal characteristics of a lottery, which can claim to be ‘organised’ by the State ………………………………….. If the basic and essential features indicated above the ensured, it might be possible to raise a presumption that the lottery is one that could be said to have been ‘organished’ by the State itself and not one merely authorized by the State under which, the so-called ‘agent’ himself organizes the lottery” Following the principle laid down in the above decision, the parliament passed the Lotteries (Regulation) Act, 1998, to regulate the State-run lotteries. The statement of objections and reasons for bringing forth the said legislation, reads as follows: “The conduct of certain types of lottery trade in the country, the malpractices thereof and the impact on the poorer sections of the society have been under scrutiny of the Government for quite some time. The continued prevalence of the popularly known single digit and instant lotteries and the temptation offered by them proved to be the undoing of many families, especially, poor daily wagers and low income groups. 2. Inspite of the guidelines issued by the Central Government over a period of time as also the guidelines issued in the recent past by the Honourable Supreme Court in the matter, the evil has not been totally eliminated and it is felt that a Central legislation to regulate the conduct of lotteries is necessary to protect the interest of the gullible poor” (emphasis supplied) 18. Section 4 of the Central Act contains the conditions, subject to which, the State may organize, conduct or promote a lottery. Section 5 authorises a State Government to prohibit the sale o tickets of a lottery, organized/conducted/promoted by every other State. Section 6 authorises the Central Government to prohibit the lottery of a State. Organized in violation of Section 4 or where the tickets of such lottery are sold in contravention of the prohibitions under Section 5. The constitutional validity of the said Act was challenged before the Apex Court in B.R. Enterprises’ case (1999) 9 SCC 700). Section 6 authorises the Central Government to prohibit the lottery of a State. Organized in violation of Section 4 or where the tickets of such lottery are sold in contravention of the prohibitions under Section 5. The constitutional validity of the said Act was challenged before the Apex Court in B.R. Enterprises’ case (1999) 9 SCC 700). The Apex Court upheld the validity of the legislation, but, read down Section 5 to the effect that a State Government can prohibit the sale of lottery tickets of other States, if only that State is a lottery-free-zone. In other words, if that State is conducting its own lotteries, it cannot prohibit the sale o tickets of lotteries of other State Governments. It was also held that the business of lottery will not get the protection of Article 19(1)(g) or Article 301 of the Constitution of India. The lottery, even if it is run by the State Government, still, it is extra commercium, it was held. 19. The Kerala Tax on Paper Lotteries Act, 2005 was enacted, to provide for levy and collection of tax in the tax in the State of Kerala for the conduct of paper lotteries in the State. Section 2(j) of the Act defines paper lottery as “any lottery other than on-line lottery, conducted in accordance with the provisions contained in Section 4 of the Lotteries (Regulation) Act, 1998”. Section 2(1) defines a Promoter as “the Government of India or Government of a State or a union Territory or any Country, who had entered into a bi-lateral agreement or a treaty with the Government of India for organizing, conducting or promoting a lottery and includes any person, appointed for selling lottery tickets by the Government in the State of Kerala on its behalf, where such Government is not directly selling lottery tickets in the State”. Section 6 of the Act provides for levy and collection of tax on paper lotteries at the rate stated therein. Section 7 provides for registration of promoters. Section 10 deals with the payment of advance tax. Sub-section 94) thereof provides that if there is failure to pay tax, the registration can be cancelled. Section 6 of the Act provides for levy and collection of tax on paper lotteries at the rate stated therein. Section 7 provides for registration of promoters. Section 10 deals with the payment of advance tax. Sub-section 94) thereof provides that if there is failure to pay tax, the registration can be cancelled. Sub-section (4) of Section 10 reads as follows: “Without prejudice to the actions contemplated under sub-sections (2) and (3) above, the Assistant Commissioner shall cancel the registration of the promoter, granted under this Act and on such cancellation registration, the promoter shall not be entitled to sell lottery tickets within the State.” Without registration a dealer cannot transport the tickets to the State or sell the same in the State. By canceling the registration, the petitioners will be effectively prevented from running their business. 20. Now, it is well settled that lottery is a form of gambling, which is condemned and despised by all civilized societies. Under all legal systems, it has been treated as a pernicious vice to be prohibited or atleast to be regulated. This was the position in ancient times also. The Constitution Bench of the Apex Court, in State of Bombay v. R.M.D. Chamarbaugwala (AIR 1957 SC 699), while considering whether the running of lottery has the protection of Article 19 (10(g) of the Constitution, held as follows: “The question arises whether our Constitution makers ever intended that gambling should be a fundamental right within the meaning of Art.19(1)(g) or within the protected freedom declared by Art.301. The avowed purpose of our Constitution is to create a Welfare State. The directive principles of State policy set forth in Part IV of the Constitution enjoin upon the State, the duty to strive to promote the welfare of the people by securing and protecting, as effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of the national life. It is the duty of the State to secure to every citizen, men and women, the right to an adequate means of livelihood and to see that the health and strength of workers, men and women and the tender age of children are not abused, to protect children youths against exploitation and against moral and material abandonment. It is the duty of the State to secure to every citizen, men and women, the right to an adequate means of livelihood and to see that the health and strength of workers, men and women and the tender age of children are not abused, to protect children youths against exploitation and against moral and material abandonment. It is to the endeavour of the State to secure a living wage, conditions of work, ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities, to protect the weaker sections of the people from social injustice and all forms of exploitation, to raise the standard of living of its people and the improvement of public health. The question canvassed before us is whether the Constitution makers who set up such an ideal of a Welfare State could possible have intended to elevate betting and gambling on the level of country’s trade or business or commerce and to guarantee to its citizens, the right to carry on the same. There can be only one answer to the question. From ancient times, seers and law-givers of India looked upon gambling as a sinful and pernicious vice ad deprecated its practice. Hymn XXXIV of the Rigveda proclaims the de-merit of gambling. Versus 7, 10 and 13 say, 7. Dice verily are armed goads an driving hooks, deceiving and tormenting causing grievous woe. The give frail gifts and then destroy the man who wins, thickly anointed with the payer’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 up to 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 they wife. Others gambler, so this good Savitar himself hath told me.” The Mahabharata deprecates gambling by depicting the woeful conditions of the Pandavas, who 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. 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 advices wise men, not to practise it even for amusement. The concluding verse 228 provides that on every man, who addicts himself to that vice, either secretly or openly, the King may inflict punishment according to his discretion. While Manu condemned gambling outright, Yajnavalkya sought to bring it under State control, but he too, in verse 202(2) provided that persons gambling with false dice or other instruments should be branded and punished by the King. Kautilya also advocated State control of gambling and as a practical person that he was, was not averse to the State earning some revenue therefrom. Vrihaspati, dealing with gambling in Chapter XXVI, verse 199, recognizes that gambling had been totally prohibited by Manu because it destroyed truth, honesty and wealth, while other law-givers permitted it when conducted under the control of the State so as to allow the King, a share of every stake. Such was the notion of Hindu Law-givers regarding the vice of gambling. Hamilton, in his Hedaya Vol.VI Book XLIV includes gambling as a kiraheeat or abomination. He says: ‘It is an abomination to play at chess, dice or an other game; for if anything is staked, it is gambling, which is expressly prohibited in the Koran; or if on the other hand, nothing be hazarded, it is useless and vain. The wagering contracts of the type which formed the subject-matter of the case of Ramloll v. Soojunmull (4 MOO Ind Appearing Parties 339 (PC) (Y) and was upheld by the Privy Council as not repugnant to the English Common law were subsequently prohibited by Act XXI of 1848, which was enacted on the suggestion of Lord Campbell made in that case an introduced in India, provisions similar to those of the English Gambling Act (8 & 9 vict.c109). Bengal Gambling Act (Ben. Bengal Gambling Act (Ben. Act 2 of 1867) provided for the punishment of public gambling and the keeping of common gaming house in the territories subject to the Lieutenant Governor of Bengal. Lottery has been since 1870, made an offence under S.294A of the Indian Penal Code. Gambling agreements have been declared to be void under the Indian Contract Act, 1872 (S.30). This, in short, is how gambling is viewed in India ………………………………………………… It will be abundantly clear from the foregoing observations that the activities which have been condemned in this country from ancient times appear to have been equally discouraged and looked upon with disfavour in England, Scotland, the United States of America and in Australia, in the cases referred to above. We find it difficult to accept the contention that those activities which encourage a spirit of reckless propensity for making easy gain by lot or chance, which lead to the loss of the hard earned money of the undiscerning and improvident common man and thereby, lower his standard of living and drive him into a chronic state of indebtedness and eventually disrupt the peace and happiness of his humble home could possibly the peace and happiness of his humble home could possibly have been intended by our Constitution makers to be raised to the status of trade, commerce or intercourse and to be made the subject-matter of a fundamental right guaranteed by Art.19 (1)(g). We find it difficult to persuade ourselves that gambling was ever intended to form any part of this ancient country’s trade, commerce or intercourse to be declared as free under Art.301. It is not our purpose nor is it necessary for us in deciding this case to attempt an exhaustive definition of the words ‘trade’, ‘business’ or ‘business’ or ‘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. 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 I 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.” Again, the Apex Court in B.R. Enterprieses’ case, noticed the views of various societies and courts on gambling and held that a lottery, even if it is run by a State Government, still it is gambling and therefore, does not have the protection of Article 19(1)(g) or Article 301 of the Constitution of India. The relevant portion of the said Judgment reads as follows: “In this context, we may first refer to the Constitution Bench decision of this Court in RMDC case, which is a leading case, which has truly dwelled on this subject at some length. It holds that gambling activities are in their very nature and essence extra commercium. The were considered to be a sinful and pernicious vice by the deprecated, even by the laws of England, Scotland, the United States of America and Australia. In support, it quoted what seers and law-givers of India in the ancient times looked upon gambling. A reference was made to Hymn XXXIV of the Rigveda which proclaims the demerits of gambling and quoted verses 7, 10 and 13. It referred to the Mahabharata, which deprecates gambling by depicting the woeful conditions of the Pandavas, who had gambled away their kingdom. Manu in verse 221, advices the King to exclude from his realm, gambling and betting, since these two vices cause the destruction of the kingdom of princes. Verse 226 describes a gambler as a secret thief, who constantly harass the good subjects by their forbidden practices. Verse 227 referred to gambling as a vice, causing great enmity and advices wise men, not to practise it even for amusement. As is the present case, even in the ancient time, in spite of condemnation of gambling, Yajnavalkya permitted it under State control. Verse 227 referred to gambling as a vice, causing great enmity and advices wise men, not to practise it even for amusement. As is the present case, even in the ancient time, in spite of condemnation of gambling, Yajnavalkya permitted it under State control. Vrihaspati on this subject, records that gambling had been totally prohibited by Manu because it destroys truth, honesty and wealth, while some other law-givers permitted it when conducted under the control of the State so as to allow the King a share of every stake. However the Supreme Court of America as far back as in 1850, considered this issue as recorded in Phalen v. Virginia case (49 US 163) and for useful appreciating, its adjudication is quoted hereunder: “Experience has shown that the common forms of gambling are comparatively innocuous when placed in contrast with widespread pestilence of lotteries. The former are confined to a few persons and places, but the later infests the whole community; it enters every dwelling; it reaches every class: it preys upon the hard earnings of the poor; it plunders the ignorant and the simple.’ 38.The observations were quoted with approval in Douglas v. Kentucky (168 US 488). After quoting the passage from Phalen case, the Judgment proceeded. ‘Is a State forbidden by the Supreme law of the land from protecting its people at all times from practices which it conceives to be attended by such ruinous results? Can the legislature of a State contract away its power to establish such regulations as are reasonably necessary from time to time to protect the public morals against the evils of lotteries?’ 39. In the said decision, a reference was made to the decision of the Australian High Court in R v. Connare (1939) 61 CLR 596). Evatt, J did not think that lottery tickets can be regarded as goods or commodities entitled to protection of Section 21 of the Common Wealth of Australian Constitution Act. He held at p.628: ‘If they are goods or commodities, they belong to a very special category, so special that in the interests of its citizens, the State may legitimately exile them from the realm of trade, commerce or business. The indiscriminate sale of such tickets may be regarded as causing business disturbance and loss which, on general grounds of policy, the State is entitled to prevent or at least minimize.” In the same decision, Mc. The indiscriminate sale of such tickets may be regarded as causing business disturbance and loss which, on general grounds of policy, the State is entitled to prevent or at least minimize.” In the same decision, Mc. Tierman, J. held: ‘Some trades are more adventurous or speculative than others, but, trader 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 share 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.’ McTierman, J. reiterated his view in another case in King v. Martin (1939) 62 CLR 457): ‘It is important to obese the distinction that gambling is not trade, commerce and intercourse within the meaning of Section 92 otherwise, the control of gambling in Australia would be attended with constitutional difficulties.’ ‘No simple legislative expedient purporting to transmute trade and commerce into something else will remove it from the ambit of section 92. But whilst asserting the width of the field in which Section 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.’ 40. With reference to the history of lotteries in England, the learned Judge quoted: “The foregoing observations give some indication of the attitude of the law for over two and a half centuries towards the carrying on of lotteries. But they show also that in this country, lotteries were, from the moment of its first settlement, common and public nuisances and that, in general, it was impossible to conduct them except in violation of the law. Indeed, it was impracticable for any person to conduct a lottery, without achieving the status of a rogue and a vagabond.’ 41.It is significant that American Congress faced with the difficulty to include gambling activity within the commerce clause of a Article 1 Section 8 sub-section (3) of the Constitution of the United States in the interest of controlling its activity including ban or penalising a person interpreted the commerce clause to include gambling activity. The relevant portion as recorded in RMDC case (State of Bombay v. RMD Chamarbaugwala (AIR 1957 SC 699) is quoted hereunder is quoted hereunder: ‘Congress having made law regulating gambling activities, which extended across the State borders, the question arose whether the making of the law was within the legislative competence of the Congress, that is to say, whether it could be brought within the commerce clause. The question depended for its answer on the further question whether the gambling activities could be said to be commerce amongst the States. If it could, then, it was open to Congress to make the law in exercise of its legislative powers under the Commerce clause. More often than not gambling activities extend from State to State and, in view of the commerce clause, no State Legislature can make a law for regulating inter-State activities in the nature of trade. If betting and gambling does not fall within the ambit of the commerce clause, then, neither the Congress nor the State Legislature can in any way, control the same. In such circumstances, the Supreme Court of America though 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 Champin v. Ames (188 US 321), the carriage of lottery tickets form 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.’ 42. We have summarized the relevant portions of the various decisions given by the Australian, American and English courts to show how they have received the lotteries in their countries, its nature, impact on the public at large, their concern about its regulation and control. There can be no doubt on the perusal of the said decisions that these courts considered lottery as gambling and even where such lotteries were permitted under the regulating power of the State but were not given the status of ‘trade and commerce’ as understood at common parlance. There can be no doubt on the perusal of the said decisions that these courts considered lottery as gambling and even where such lotteries were permitted under the regulating power of the State but were not given the status of ‘trade and commerce’ as understood at common parlance. It is significant, within the fertile and exclusive zone of interpretation, when situation arose, to interpret the word ‘commerce’ which normally would not have included ‘gambling’ within it, in the wider public interest as to bring jurisdiction to the legislature to control or restrict ‘betting and gambling’ interpreted this also to come within commerce clause. This wider definition to the commerce clause was given by the American Court with an objective to control such lotteries rather giving absolute freedom to trade in it. Thus, the law in Champion case (188 US 321), pending even carriage of lottery tickets from one State to another was upheld. In cases United States v. Kahriger (345 US 22) and Lewis v. United States (348 US 419), the Supreme court of United States held that there is no constitutional right to gambling. 43. We have referred to some of the quotations in ancient Dhamashastra as referred in RMDC case, we are shortly giving a few more of the views in Dharmashastra on this point in issue. Kautilaya in III-20 referred to in Chapter 26 of the Dyutasamahvya, allowed gambling in a central place under State supervision as it led to the detection of thieves. According to the view of some others, it was also allowed to be carried in the presence of master of the gambling hall and provided it yielded revenue to the king. If they indulge in gambling openly, but give to the King share in the stakes, then such a person does not incur in (sic any) punishment. Rigveda Chapter C verse 34 records: ‘Gambling is one of the most ancient vices.’ 44. Brahmapurana condemns it in strong language. It says that the gambler’s wife is always in distress and the gambler on seeing the condition of his wife is also worried. Some of the historical background of the lottery is recorded in Encyclopaedia Britannica, 1980 Edn, at pp.327-28 which is quoted hereunder: ‘Lottery, a scheme for the distribution of prizes to be determined by chance, was reputedly an invention of the Romans….. Some of the historical background of the lottery is recorded in Encyclopaedia Britannica, 1980 Edn, at pp.327-28 which is quoted hereunder: ‘Lottery, a scheme for the distribution of prizes to be determined by chance, was reputedly an invention of the Romans….. Lottery in the modern sense, originated in Italy, during the middle ages spreading to France, Germany and Austria where rulers used them to raise revenu….. First English lottery was drawn in 1569. ……. However, lotteries encouraged mass gambling and fraudulent drawing and after they had been attacked…… Parliament provided for their discontinuance in 1823. thereafter, large-scale lotteries contrived to inhibit prosecution by giving large sums to charities ….. A century later, following the agitation for legalized lotteries, the Betting and Lotteries Act, 1934 adopted the recommendation of the Royal Commission and continued the prohibition on all lotteries.” 45. In United States, it records: ‘American colonial lotteries on the English pattern were used to raise money for public improvements and to assist in the financing of colleges including Columbia, Harvard, Dartmouth and Williams. In 1762, the Pennsylvania Provincial Assembly denounced lotteries, declaring they were responsible for vice and idleness and were injurious to trade …… In 1833, legislation enacted in Massachusetts, New York and Pennsylavania outlawed lotteries and early in 1834. similar action was taken by Ohio, Vermont, Maine, New Jersey, New Hampshire and Illinois. Provisions prohibiting legislatures from authorizing lotteries in the future were inserted in many State Constitutions….. Congress responded by enacting legislation making it a federal crime to deposit lottery matter in the United States mails. In the Louisiana election of 1892, the lottery was the sole issue in the Governor’s contest. The anti-lottery candidate won and the lottery was outlawed.’ 46. In the ‘Lotteries, Revenues and Social costs: A historical Examination of Stat-sponsored Gamling’, it records in Boston College Law Review, Vol 34:11 at ‘p.12: “Two hundred years ago, Government-sanctioned lotteries were common throughout America. Lacking a strong Central Government and burdened with a weak tax base, early Americans viewed lotteries as legitimate vehicles for raising revenue. Lottery proceeds were used to build cities, establish universities and even to help finance the Revolutionary War. They were gradually abandoned through the 1800s as Governments developed better forms of taxation. Lottery fraud became a concern and social problems stemming from excessive gambling developed. Lottery proceeds were used to build cities, establish universities and even to help finance the Revolutionary War. They were gradually abandoned through the 1800s as Governments developed better forms of taxation. Lottery fraud became a concern and social problems stemming from excessive gambling developed. In 1893, the Librarian of Congress wrote of ‘a general public conviction that lotteries are to be regarded, in direct proportion to their extension, as among the most dangerous and prolific sources of human misery. Soon thereafter, federal legislation brought an end to the last remaining legal American lottery.’ ‘From 1709, until 1826, the English Government conducted annual lotteries to raise revenue. These were so popular that they soon became a matter of concern. English lotteries were attacked for weakening the habits of industry, diminishing permanent sources of the public revenue, encouraging other forms of gambling and being injurious in the highest degree, to the morals of the people……… Finally, in 1823, at about the same time that lotteries were beginning to be phased out in America, England abolished lotteries in that country.’ At ‘p.32,it further records: ‘Until the early 1800s, there was little opposition to State-conducted lotteries, State regulation, including bonding of operators and supervision of receipts, quieted opponents. Churches usually benefited from lotteries, so they were not quick to condemn. As the country’s dependency on lotteries increased, however, so did the opportunity for abuse. Serious lottery opposition began to amount in the early to mid 1800s as part of genera social reform that included movements for temperance, peace, women’s rights, educational reform, prison reform and abolition of slavery. As one authority has noted: ‘In 1842, the Democrats swept to power because of their opposition to lotteries. The lotteries in turn, were portrayed merely as an adjunct to a corrupt monopolistic banking system dominated by the wealthy Whig power elite’ At ‘p.70, it further records: ‘Because legalized gambling leads to increased illegal gambling, State-sponsored lotteries inevitably increase crime. Legalized gambling’s impact on criminal behaviour, however, is not limited to an increase in illegal gambling. Perhaps, the most serious concern is that legal gambling creates problem gamblers and problem gamblers often turn to more serious criminal activity to support their habits.’ 47. Legalized gambling’s impact on criminal behaviour, however, is not limited to an increase in illegal gambling. Perhaps, the most serious concern is that legal gambling creates problem gamblers and problem gamblers often turn to more serious criminal activity to support their habits.’ 47. From the references from Dharmashastra, opinion of distinguished authors, references in the Encyclopaedia Britannica and Boston Law Review and others, we find that each concludes, as we have observed, lottery remains in the realm of gambling. Even where it is State-sponsored, still, it was looked down upon as an evil. Right from ancient time, till the day, all expressed concern to eliminate this, even where is was legalized for raising revenue either by the King or in the modern times by the State. Even this legitimization was for the sole purpose of raising revenue, was also for a limited period, since this received condemnation even for this limited purpose. All this gives a clear picture of the nature and character of lottery as perceived through the conscience of the people as revealed through ancient scriptures, also by various courts of the countries…………………………………………………… gambling could be commercium hence in our considered opinion, the principle of RMDC case would equally be applicable eve to the State-organised lottery. In no uncertain terms the said decision recorded that the Constitution-makers could never have conceived to give protection to gambling either under Article 19(1) (g) or it as a trade under Article 301 of the Constitution.” (emphasis supplied) 21. In view of the authoritative pronouncements of the Apex Court in R.M.D. Chamabaugwala’s and B.R. Enterprises’ cases, though, grounds were taken in the Writ Petitions, no one urged that they have any rights to carry on the business in lottery, under Article 19(1)(g) or Article 301 of the Constitution of India, Recently, the Hon’ble Supreme Court in Sunrise Associates v. Government of NCT of Delhi (2006 (5) SCC 603) held that lotteries are not goods for the purpose of Sales Tax laws. So, the import of lottery tickets from one State to another will not get the protection of Article 304 of the Constitution. 22. In the background of the above legal position, the contention of both sides have to be examined. The preliminary objection raised by the State that the writ petitions are not maintainable, as the impugned proceedings are only notices, cannot be accepted. 22. In the background of the above legal position, the contention of both sides have to be examined. The preliminary objection raised by the State that the writ petitions are not maintainable, as the impugned proceedings are only notices, cannot be accepted. With the issuance of the notices, the State has stopped receiving tax. So, they are justified in approaching this Court. Further, the dispute concerning the jurisdiction of the Stat in issuing the impugned notices can more conveniently be adjudicated by this Court. So, the preliminary objection is overruled. The main dispute that arises for decision, as far as the Sikkim Lottery is concerned, is whether the State of Kerala is competent to cancel the registration of the petitioner and thereby prohibit sale of tickets of the said lottery in the State of Kerala, on the ground that it is being run in violation of Section 4 of the Central Act. Section 4 of the Lotteries (Regulation Act, 1998 reads as follows: “Conditions subject to which lotteries may be organized etc.:- A State Government may organize, conduct or promote a lottery, subject to the following conditions, namely:- (a) prizes shall not be offered on any pre-announced number or on the basis of a single digit; (b) the State Government shall print the lottery tickets, bearing the imprint and logo of the State in such manner that the authenticity of the lottery ticket is ensured; (c) the State Government shall sell the tickets either itself or through distributors or selling agents; (d) the proceeds of the sale of lottery tickets shall be credited into the public account of the State; (e) the State Government itself shall conduct the draws of all the lotteries; (f) the prize money unclaimed within such time as may be prescribed by the State Government or not otherwise distributed, shall become the property of that Government; (g) the place of draw shall be located within the State concerned; (h) no lottery shall have more than one draw in a week; (i) the draws of all kinds of lotteries shall be conducted between such period of the day as may be prescribed by the State Government. (j) the number of bumper draws of a lottery shall not be more than six in a calendar year; (k) such other conditions as may be prescribed by the Central Government.” A paper lottery is defined in Section 2(j) of the Kerala Act, as a lottery conducted in accordance with the provisions contained in Section 4 of the Lotteries (Regulation) Act. So, if it is found that the lottery is not one conducted in accordance with the said provisions, it is not entitled to get registration. Therefore, even if the promoter of such a lottery obtains the registration, it is liable to be cancelled, according to the Kerala Government. The basic jurisdictional fact for grant of registration or continuance of the registration is absent and therefore, the promoter become ineligible to get the registration or to continue to have the registration, it is contended. If the registration is not granted or it is cancelled, the State of Sikkim will not be able to sell its lottery tickets in the State of Kerala, But, going by the decisions of the Apex Court in H. Anraj’s ((1984) 2 SCC 292) and B.R. Enterprises’ cases, the State has no jurisdiction to prohibit the sale of lottery tickets of another State. See the relevant portion of the Judgment in H. Anraj’s case quoted in paragraph 16 of this Judgment. In B.R. Enterprises’ case, the Apex Court held as follows: “But control of State lotteries running in the territory of other States is left on the Union. The State cannot restrict sales of lotteries organized by other States even in its territory unless authorized by the Union ………… It is true that unless this provision is read down to mean a State can only ban lotteries of other States when it bans as a policy its own lotteries, it is bound to be subjected to the vagaries as pointed out and on deeper scrutiny, it may not successfully stand. But, by reading down the provision, which has to be read that it is only that State which decides lottery-free zone within its State ca prohibit lotteries of other States clearly provides the guidance for the exercise of such a power. It is inbuilt and inherent in the provision itself in view of the scheme of the Act and nature of subject in issue. ……………. It is inbuilt and inherent in the provision itself in view of the scheme of the Act and nature of subject in issue. ……………. We find on plain reading of Section 5, it empowers the State Government within its State to prohibit the sale of tickets of the lotteries organized by every other State. There is also nothing in the language reading by itself so as to say, whether such power can be exercised by the State, while running its own lottery or can be exercised only where such State does not run its own lottery or can be exercised only where such State does not run its own lottery. This leads to two possible interpretations, as referred to above. In view of the settled principles of interpretations, the interpretation given by the Union to read down the provision has substance. This would mean that the State could only exercise such discretion if it decides not to have any lottery within its territory including its own lottery. In this situation, the delegatee is tied by this limitation which itself is a clear guide to a State hence cannot be said to be unbridled delegation. So, even to the first part, it cannot be said to be arbitrary or unbridled. So, we have no hesitation to approve the interpretation given by the Union to uphold the validity o Section 5.” (emphasis supplied) 23. So, even if the lottery is conducted in violation of Section 4 of the Lotteries (Regulation) Act, 1998, the State has no power to regulate or prohibit it, unless the State is a lottery-free-zone. The contention of the learned Special Government Pleader that by canceling the registration, the State is not prohibiting the sale of lotteries, cannot be accepted. Once the registration of the promoter is cancelled, he is disabled from transporting or selling the tickets in the State o Kerala. So effectively, it will amount to prohibition of the sale of lottery tickets. So, something, which the State cannot do under Section 5 of the Lotteries (Regulation) Act, cannot be done indirectly under the provisions of the Kerala Tax on Paper lotteries Act, 2005, which is admittedly enacted under Entry 62 of List II of the 7th Schedule of the Constitution. So, something, which the State cannot do under Section 5 of the Lotteries (Regulation) Act, cannot be done indirectly under the provisions of the Kerala Tax on Paper lotteries Act, 2005, which is admittedly enacted under Entry 62 of List II of the 7th Schedule of the Constitution. Therefore the impugned notice Ext.P11, which is issued, based on the prima facie finding that the lottery is run in violation of Section 4 of the Central Act, is issued without jurisdiction. In view of this finding regarding Ext.P11 is quashed. The tax offered by the petitioner shall be received. 24. But, I think, the matter cannot be left at that. When a State Government finds that the lottery of another State is run in violation of Section 4 of the Lotteries (Regulation) Act, 1998, the central Government have a duty to look into the matter. The learned Special Government Pleader, at the time of hearing, handed over to me, three D.O. letters dated 07.02.2005, 06.04.2005 and 10.11.2006, written by the Chief Ministers of Kerala to the Central Home Ministry. From the submissions and the materials available, it would appear that the Central Government has not bestowed its attention on the representations of the highest Constitutional functionaries of the Executive Government of the State. The power of the Central Government under Section 6, to prohibit the lotteries of other State Governments, conducted in violation of Section 4 of the Central Act, is a power coupled with duty, which as to be exercised when circumstances warranting the exercise of that power, are shown to exist. The Central Government cannot take shelter behind any policy decisions in the matter, as the subject-matter relates to its statutory duty under Section 6 of the Act. The policy of the Government can only be the policy of the Act, which manifests from its objects and reasons quoted earlier. So, I am of the view that the Central Government should hear both the State Governments and take a decision in the matter. If it is found that the lottery is run in violation of Section 4 of the Act, the State Government concerned, should be given a chance to rectify the violation and run the lottery in accordance with Section 4 of the Central Act. If the violation persists, the lottery itself should be banned by the Central Government. The running of lottery is a pernicious activity. If the violation persists, the lottery itself should be banned by the Central Government. The running of lottery is a pernicious activity. Under the hope of becoming rich instantly, the daily wage earners engage in gambling. The gambler is stealing the whole or a portion of the gruel in the bowl of the under fed and ill-clad children of such wage earners. 99.99% of the participants in the lottery will not get any prize. They will only be wasting their money. The poor and gullible, who purchase the tickets are losing their hard earned money. Going by the pleadings of the parties, it would appear that the State of Sikkim is conducting more than one lottery in a week under different schemes. The same is not permissible under Section 4(h) of the Central Act. This admitted violation of the Act makes the lottery illegal. A Division Bench of the Kerala High Court, in All Kerala On-line Dealers Association v. State of Kerala (WA No.2011/05 and connected cases), has held as follows: “A State can run only 52 ordinary lotteries and 6 bumper lotteries in an year.” This declaration is made by the Division Bench, interpreting Section 4 of the Central Act. If, every day lottery or lotteries are held, the wage earners will spend the whole or a portion of their wages to purchase the tickets every day. If there is a gap of one week between the conduct of the lottery, there will be a cooling time between one purchase of ticket and another. The contention of the petitioners that the State of Kerala is also conducting more than one lottery in a week, is no answer to the admitted violation of Section 4 of the Central Act by them. The Central Government can ask the Kerala Government also, not to conduct more than one lottery in a week. So, the Central Government is directed to look into the complaints that the conduct of lotteries by the State of Sikkim is in violation of Section 4 of the Lotteries (Regulation) Act, 1998, in accordance with law within four months from the date of receipt of a copy of this Judgment. 25. The position of the petitioner in Writ Petition(C)No.30176/06, who is the agent of the lotteries conducted by the Royal Government of Bhutan, stands on a different footing. Bhutan is a foreign country. 25. The position of the petitioner in Writ Petition(C)No.30176/06, who is the agent of the lotteries conducted by the Royal Government of Bhutan, stands on a different footing. Bhutan is a foreign country. It is not a State in the Republic of India. So, the provisions of the Central Act are not applicable to the lotteries run by it. A legislation under Entry 40 of list I of the 7th Schedule of the Constitution can apply to lotteries conducted by Central and the State Governments. So, the prohibition against the State of Kerala in taking action against other State lotteries has no application whatsoever, to the lottery run by the Royal Government of Bhutan. The said Government may run its lottery in any manner it likes. Under Ext.P1 treaty, it can sell the tickets of its lotteries in the various States in India. But, its sale shall be subject to the local laws applicable. By virtue of Entry 34, a State can regulate any lotteries, other than lotteries run by the Central or the State Governments, covered by Entry 40 of List of the 7th Schedule of the Constitution. So, in relation to lotteries covered by Entry 34 of List II, especially foreign lotteries, the State Government can say, the promoters of such lotteries will be granted registration and their tickets will be permitted to be sold in the State of Kerala, if only they conform to the stipulations contained in Section 4 of the Central Act. As far as a foreign lottery is concerned, Section 4 of the Central Act is adopted by the State Act, as a condition, precedent for granting registration or for its continuance. As far as other State Lotteries are concerned, the provisions under the Kerala Act, which have the tendency to prohibit the sale of tickets of lotteries of other States, are not enforcible by virtue of the constitutional limitation on the power of the State Legislature. But, as far as the foreign lotteries are concerned, there is no necessity to read down the provisions of the Kerala Act. Though, the State Government has submitted that the Kerala Act is a piece of legislation under Entry 62 of List II, it is also a legislation under Entry 34, as far as it concerns regulation of lotteries. But, as far as the foreign lotteries are concerned, there is no necessity to read down the provisions of the Kerala Act. Though, the State Government has submitted that the Kerala Act is a piece of legislation under Entry 62 of List II, it is also a legislation under Entry 34, as far as it concerns regulation of lotteries. But, the regulatory power could be invoked only against other lotteries, not covered by Entry 40 of List I. The affidavit filed by the State Government regarding the scope of a legislation, cannot have any efficacy to curtail its full force and amplitude. See the observation of the Constitution bench of the Apex Court on the effect of affidavit of the Government, concerning a legislation, in Sanjeev Coke Manufacturing Co. v. Bharat Coking Coal Limited (1983 (1) SCC 147). The relevant portion of the said Judgment reads as follows: “The Executive Government may place before the Court, their understanding of what Parliament has said or intended to say or what they think was Parliament’s object and all the facts and circumstances, which in their view, led to the legislation. When they do so, they do not speak for parliament. No Act of Parliament may be struck down because of the understanding or misunderstanding of parliamentary intention by the Executive Government or because of their (the Government’s) spokesmen do not bring out the relevant circumstances, but, indulge in empty and self-defeating affidavits. They do not and they cannot bind parliament.” So, the contention of the Government that the Kerala At is enacted under Entry 62 only, will not bind the Legislature or this Court. The insistence for running a lottery in accordance with Section 4 of the Central Act will amount to a regulatory measure and the power to enact such a provision can be traceable to Entry 34 of List II. When the State Legislation incorporates or adopts the provisions of Section 4 of the Central Act, the said provisions lose the status of the Central Legislation. They become the provisions in the State Act. Instead of enumerating the conditions in Section 4, the State Legislature has employed the method of legislation by incorporation. See the concept of legislation by incorporation, explained P.C. Agarwala. Payment of Wages Inspector (2005 (8) SCC 104). But thelearned Senior Counsel appearing for the petitioner in Writ Petion (c) No.30176 Shri.Soli. They become the provisions in the State Act. Instead of enumerating the conditions in Section 4, the State Legislature has employed the method of legislation by incorporation. See the concept of legislation by incorporation, explained P.C. Agarwala. Payment of Wages Inspector (2005 (8) SCC 104). But thelearned Senior Counsel appearing for the petitioner in Writ Petion (c) No.30176 Shri.Soli. J. Sorabji, relying on the observations made by the Apex Court in B.R. Enterprises’ case (supra), contended that unless Kerala is a lottery-free-zone, it cannot prohibit the sale of tickets of the Sikkim Government. The relevant portion of the said Judgment reads as follows: “It is true that by perusal of these various office memoranda, circular letters and the affidavit of the Union of India depicts the state of uncertainty in the Union and so it took its oscillating stand, as it stood then and now. Then the stand was, since Bhutan lottery is under a treaty, all States should permit its sale, now the stand is that such lottery would fall under Entry 34 List II hence would be subject to the laws of the State. So far the submission that Bhutan lottery cannot be controlled under the impugned Act has merit. The impugned Act is confined to the State-organised lotteries under the Union list, under Entry 40 List I, However, submission on behalf of the union, which is also incorporated in its aforesaid affidavit, is, as per agreement, the sale of Bhutan lottery tickets in India land sale of Indian Government/State Government lottery tickets in Bhutan will be subject to the relevant laws as may be enforced in the territory of Kingdom of Bhutan and India, as the case may be. Thus, under the terms of the present treaty itself, the sale of Bhutan lotteries has been agreed and subjugated to be subject to the relevant laws in India. So far as this treaty is concerned, there is no law yet framed by Parliament under Entry 14 List I. Admittedly, Bhutan Lottery does not fall under Entry 40 List I. Thus, the restrictions and conditions imposed under the impugned At would only apply to the State lotteries and not to the lotteries of the Kingdom of Bhutan. So far as this treaty is concerned, there is no law yet framed by Parliament under Entry 14 List I. Admittedly, Bhutan Lottery does not fall under Entry 40 List I. Thus, the restrictions and conditions imposed under the impugned At would only apply to the State lotteries and not to the lotteries of the Kingdom of Bhutan. Next, it has to be seen that when the treaty makes it obligatory for the Bhutan lotteries to be subject to the Indian laws and in the absence of any law by Parliament pertaining to the treaty under Entry 14 List I, under which class of lottery it would fall and which law it would be subjected to. We also make it clear in the present case, that the aforesaid treaty with the Kingdom of Bhutan is not subject to any challenge. Let us examine first, the relevant entries of the lists under the Seventh Schedule of the Constitution. It is admitted that it does not fall under Entry 40 List I. Another relevant entry is Entry 14 List I which refers to treaty. This treaty could be under this entry, but in the absence of any law by Parliament, it would be governed by the terms of the treaty itself. Entry 41 list I refers to the trade and commerce with foreign countries. Even if it falls under it, in the absence of the law by Parliament. Even if it falls under it, in the absence of the law by Parliament, would be governed by the terms of the treaty. Entry 42 List I deals with inter-State trade and commerce under which it will not fall. 76. The sale of lottery tickets of Bhutan but for the aforesaid stipulation in the treaty it possibly could have been said, it cannot be subjected to the laws of lotteries in India. But, once treaty itself stipulates it to be subject to anylaw in India, then, if the sale of Bhutan lottery tickets are not State-organised lotteries, it necessarily falls under other lotteries under Entry 34 List II. There is no other entry, pertaining to lottery. Thus, it necessarily follows that its sale within India will be subject to the laws of the State as is applicable under this entry. There is no other entry, pertaining to lottery. Thus, it necessarily follows that its sale within India will be subject to the laws of the State as is applicable under this entry. In other words, if the State prohibits sale within its State not only sale of its own lottery, but every other lottery, then, the sale of lottery tickets of Bhutan will have to be subjected to the laws of that State. Thus, prohibition to other lotteries will equally be applicable to the sale of Bhutan lottery. In the present case, learned Additional Solicitor General. Mr. Vaidyanathan, also subscribed to this interpretation on behalf of the union. As we have said, in the absence of law by Parliament, so far as the treaty with the said stipulation is concerned, there could possibly be no other interpretation further eliminates possible discrimination which is the subject of attack in the present case. Thus, the Bhutan lottery could not be said to be privileged or it, in any way, discriminates with other State lotteries.” (emphasis supplied) A reading of the above paragraphs would show that the Bhutan lotteries, as per the treaty signed with the Republic of India, have been agreed to be subjugated to the relevant laws in India. It is specifically held that the said lottery will be subject to any legislation under Entry 34 of List II of the Seventh Schedule of the Constitution of India. So, for the sale of tickets of lotteries of the Bhutan Government in Kerala, the provisions of the Kerala Act have to be obeyed. In the above quoted paragraph 76, the Apex Court observed that if all lotteries are banned in a State, then, the lottery tickets of Bhutan can also be banned. The same does not mean that the lottery tickets of Bhutan can permitted, if only the State is a lottery-free-zone. A decision is an authority for what it decides and not an authority for what could be deduced from a solitary sentence. The point whether Bhutan lotteries could be prohibited in a State for the violation of a State Law, was not considered by the Apex Court. But, it was positively held that the sale of tickets of Bhutan lottery will be subject to the laws of the State. The point whether Bhutan lotteries could be prohibited in a State for the violation of a State Law, was not considered by the Apex Court. But, it was positively held that the sale of tickets of Bhutan lottery will be subject to the laws of the State. Therefore, if Bhutan lottery tickets are to be sold in the State of Kerala, the Royal Government of Bhutan should obey the provisions of the Kerala Act. In other words, it should run its lotteries in accordance with the provisions of Section 4 of the Central Act. Going by the materials produced in this Writ Petition, there is admitted violation of Section 4(h) of the Act, which prohibits more than one draw in a week. In view of the competence of the State Government, referable to Entries 34 and 62 of List II, the challenge made against Section 10(4) of the Kerala Act, is plainly unsustainable. Section 10(4) only provides for cancellation of registration for non-payment of tax. In this case, the respondents do not fall back on Section 10(4) of the Kerala Act, to sustain the impugned notice issued to the petitioner. If the State Government is satisfied the impugned notice issued to the petitioner. If the State Government is satisfied that the lottery is run in violation of the provisions of Section 4 of the Central Act, all lotteries, including the Bhutan lotteries other than the lotteries of the Central/State Governments, can be prohibited. If the jurisdictional facts for granting the registration are not present, the registering authority should normally be conceded freedom to cancel the registration. 26. But, the learned Senior Counsel Sri. Soli Sorabji contended that the order, granting registration is a quasi-judicial order and therefore, such an order cannot be reviewed by its author, unless there is an express provisions, authorizing review, in the Statute. The Officer, who passed the order, cannot fall back on Section 21 of the General Clauses Act. In support of this submission, reliance is placed on Stat of Madhya Pradesh v. Ajay ((1993 (i) SCC 302) and Indian National Congress (I) v. Institute of Social Welfare (2002 (5) SCC 685). State of Madhya Pradesh v. Ajay Singh is a case, where a person appointed as a Commission constituted under Section 3 of the Commissions of Inquiry Act, 1952, has been substituted by a new member. State of Madhya Pradesh v. Ajay Singh is a case, where a person appointed as a Commission constituted under Section 3 of the Commissions of Inquiry Act, 1952, has been substituted by a new member. In the absence of any express provisions in the Act, the Apex Court held that the Government cannot, relying on Section 21 of the General Clauses Act, make substitution of the sole member of the Commission, though, it may fill up a vacancy in the Commission. In the case of Indian National Congress v. Institute of Social Welfare, it was held that the registration granted to a political party by the Election Commission cannot be cancelled in the absence of any provision in the relevant statute, relying on Section 21 of the General Clauses Act. The learned Special Government Pleader, on the other hand, relied on the decisions of the Apex Court in State of Uttar Pradesh v. Dharmander Prasad Singh (AIR 1989 SC 997-Para 23A to 24), Dharmapal Jain Trust v. State of Kerala (2002) to KTR 484-Para 3) and M.P. Gangadharan v. State of Kerala (2006(6) SCC 162-Para 14). According the learned Special Government Pleader, the decisions relied on by the writ petitioner do not lay down any absolute principle, that a decision, if it is quasi-judicial, cannot be revoked without a special empowerment under the Act. Going by the decisions of the Apex Court relied on by both sides, I feel that the power of the authority has to be examined in the light of the scheme of the particular statute and its relevant provisions. The decision in each case will depend upon the scheme of the particular Act, involved. Having regard to the scheme of the Kerala Tax on Paper Lotteries Act, I feel that if certain basic facts were misrepresented or wrongly understood, while granting the registration, the State should be conceded freedom to cancel the registration in relation to lotteries not covered by Entry 40 of list I of the 7the Schedule of the Constitution. In the case of lotteries covered by the said entry, ie., the lotteries run by other State Governments, the State will not be able to cancel the registration because of the constitutional limitation on the powers of the State. In the case of lotteries covered by the said entry, ie., the lotteries run by other State Governments, the State will not be able to cancel the registration because of the constitutional limitation on the powers of the State. But, in the case of other lotteries like lotteries of the Royal Government of Bhutan, if it is found that the registration was granted on the wrong assumption that it is run in accordance with Section 4 of the Lotteries (Regulation) Act and subsequently, when the mistake is realised, the registering authority should be conceded freedom to cancel the registration with notice to the affected parties. If a lottery, which was being run in accordance with Section 4 of the above said Act is, after obtaining the registration, run in violation of the said Section, the registering authority may cancel the registration. In any view of the matter, the State can decline to renew the registration with effect from 01.04.2007. that the lottery is run in accordance with Section 4 of the Central Act, is a jurisdictional requirement for getting and retaining the registration. So, I am of the view that the impugned notice has been issued to the registration. So, I am of the view that the impugned notice has been issued to the petitioner validly. Even in the main decision relied on by the petitioner in Indian national Congress v. institute of Social Welfare (2002(5) SCC 685), the Apex Court has held that even in the absence of any express provision enabling cancellation of registration, the Election Commission may do it under certain circumstances. See Para 33 of the said decision, which reads as follows: “However, there are three exceptions where the Commission can review its order registering a political party. One is where a political party obtained its registration by playing fraud on the Commission, secondly, it arises out of sub-section (9) of Section 29-A of the Act and thirdly, any like ground where no enquiry is called for on the part of the Election Commission, for example, where the political party concerned is declared unlawful by the Central Government under the provisions of the Unlawful Activities (Prevention) Act, 1967 or any other similar law.” Ajay Singh’s case (1993) 1 SCC 302) relates to judicial enquires. Indian National Congress’ case (2002(5) SCC 685) deals with the functioning of political parties, which is essential for sustaining democracy in the country. The principles laid down to interpret the provisions of the Acts concerned in them, cannot be applied to deal with gambling, which is a pernicious vice. 27. The contentions of the petitioner relying on the earlier case before this Court and the Apex Court, arising under the Kerala State lotteries and On-line Lotteries (Regulation) Rules, 2003 have no relevance, as far as the present case is concerned. They are concerning the validity of the said Rules, which are already repealed. 28. There are not sufficient materials before this Court to decide on the contention of the petitioner that the impugned notice has been issued under dictation and therefore, vitiated. This and other contentions, which come within the realm of facts, are not decided by me in this Writ Petition, filed challenging a notice. They are kept open. If the final order goes against the petitioner, while challenging the same, the petitioner may raise them. I have only decided the jurisdictional point raised by the petitioner. In the result, the challenge against Ext.P13 is repelled. The third respondent shall consider the objections of the petitioner and pass final orders objectively, uninfluenced by any external factors or dictation. It is also ordered that the State Government and its Officers shall receive tax from the petitioner, until his registration is cancelled and he shall be allowed to run his business as long as the registration remains in force. Subject to the above direction, Writ Petition© No.30176/06 is dismissed. No costs.