Gulati, J. - (1.) THIS and the connected petitions raise a common question and hence are being disposed of by a common judgment.
(2.) THE petitioner won a prize of Rs. 1,00,000 in the twentieth draw of the U.P. State Lotteries held on 8th December, 1972. Under the rules one-tenth of the prize money goes to the person who sells the ticket. THE petitioner was thus entitled to Rs. 90,000. Out of this sum, a sum of Rs. 31,050 was deducted on account of income-tax and the petitioner was paid the balance of Rs. 58,950. A certificate of deduction of income-tax was duly sent to the petitioner by the Director-of State Lotteries, the second respondent. THE petitioner has challenged the deduction of income-tax and has impleaded as respondents besides the State of Uttar Pradesh, the Director of State Lotteries, the Commissioner of Income-tax, Lucknow, the Union of India and the Income-tax Officer, Lucknow. Prior to 1972 winnings from lotteries used to be exempt from Income-tax as being receipts of casual and non-recurring nature. By the Finance Act, 1972, certain amendments were made to the Income-tax Act, 1961, as a result of which the winnings from lotteries and gains from certain other pastimes like races, card games, gambling and betting also became taxable. The following amendments were made in the Income-tax Act, 1961. In Section 2(24), which defines " income ", a new Clause (ix) was added reading as under: " 2(24)(ix). Any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. "
(3.) SECTION 10(3) which provided that in computing the total income of any person, any receipts which are of a casual and non-recurring nature, shall not be included, was replaced by the following : " 10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included--. ..... (3) any receipts which are of a casual and non-recurring nature, not being winnings from lotteries, to the extent such receipts do not exceed one thousand rupees in the aggregate :......" Section 56(2) provides as to what income shall be chargeable to income-tax under the head " Income from other sources ". The following Clause (ib) was added to this section. " (ib) income referred to in Sub-clause (ix) of Clause (24) of Section 2, " ;