Background
In September 2022, a GST intelligence unit issued a show-cause notice to Gameskraft Technology, alleging non-payment of Rs 21,000 crore in GST, along with accusations of promoting online betting through various games. Gameskraft challenged the notice in the Karnataka High Court, which quashed the notice in May 2023, leading to the appeal by the Directorate of Revenue Intelligence of GST in the Supreme Court.
Gameskraft Technology is known for its real-money gaming platforms, including Rummyculture and Gamezy, offering games like rummy, fantasy sports, and online ludo.
Supreme Court Stay
The Supreme Court, on September 6, stayed the Karnataka High Court's judgment that had quashed a GST notice against Gameskraft Technology. This notice alleged evasion of Rs 21,000 crore in GST.
Bench and Hearing
A bench led by Chief Justice of India (CJI) DY Chandrachud is expected to hear the case for a final hearing in three weeks.
Reason for Supreme Court Appeal
The Additional Solicitor General (ASG) N Venkatraman argued that they approached the Supreme Court because the High Court had relied heavily on a judgment of a two-judge bench of the same court. The ASG claimed that the High Court's judgment had put a pause on other show cause notices, creating issues for the GST department.
Supreme Court's Decision
The Supreme Court directed Gameskraft to file their response to the case and allowed the Directorate of Revenue Intelligence of GST to file a rejoinder. The court also stayed the operation of the High Court's judgment, enabling the GST department to initiate proceedings against Gameskraft. The CJI orally observed that the Supreme Court's decision should not be followed by other High Courts.
Industry Response
Joyjyoti Misra, Group General Counsel at Gameskraft, expressed confidence in the judiciary and stated that they, along with industry associations, will present their submissions to the Supreme Court in the coming weeks. They believe that the Supreme Court will reaffirm the settled law.
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