The Kerala government on Wednesday decided to approach the Supreme Court against a Kerala High Court verdict which directed the state tax authorities to treat Megha Distributors, accused of irregularities, as promoters of Bhutan lotteries in Kerala.
"We will go for an appeal. We have also decided to appoint a monitoring cell, under the charge of additional director general of police Siby Mathews, to do a complete study of the manner in which the lottery trade is being conducted in the state," said Chief Minister VS Achuthanandan, who chaired a meeting of ministers, officials and the advocate general to decide on the course of action.
The Kerala government had last month refused to accept tax payments by Megha Distributors, alleging flouting of rules, following which the company had approached the high court.
A division bench, comprising Justices Thothathil B. Radhakrishnan and P. Bhavadasan, held that as per a bilateral agreement, Bhutan can appoint a promoter of its lotteries and tax authorities cannot insist on scrutiny of the agreement.
Megha Distributors was appointed by Bhutan and given registration certificate in 2005, which was renewed from time to time.
The bench also directed the authorities to receive tax due since October from the company, without claiming interest.
The Congress-led opposition has been alleging a secret deal between the company and the ruling Communist Party of India-Marxist (CPI-M).
But things turned sour for the Congress when party spokesperson Abhishek Manu Singhvi appeared as counsel for Megha Distributors.
CPI-M countered the opposition by saying that Singhvi's role as lawyer for the distributors proved the collusion between the company and Congress leadership in Delhi.
Singhvi withdrew from the case Sep 30 after protests from the state Congress unit. He was also sacked as the party's spokesperson.
The lottery case has snowballed into a major issue in the state, where local body polls are scheduled Oct 23 and 25, with both the ruling Left Democratic Front (led by CPI-M) and Congress-led United Democratic Front accusing each other of colluding with the state's lottery mafia.