Interim Order Date: 18.01.2023

Bench: Rajasthan High Court, Jaipur Bench

This writ petition has been filed against the Show Cause Notice.

Issue:  Challenging the Show Cause Notice issued by the department u/s 74 of CGST Act, 2017 to allege that whether Online Gaming services are covered as gaming of chance or betting/ gambling or such services are merely a game of skill.

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Facts of the case: –

• The petitioner company is engaged in providing online gaming services such as Rummy, Poker, Fantasy sports, and casual games like Cricket, Candy Crush, Carrom, Solitaire, etc. on their website MyTeam11.in
• Show cause notices were served by the respondent dated 09.12.2022 to allege that gaming services provided by the petitioner are an actionable claim which is goods under GST law and Imposes GST, interest, and penalty accordingly.
• Aggrieved by the above-impugned notice, the present writ petition has been filed by the petitioner to argue that the respondent has no jurisdiction to issue the SCN merely by taking a different opinion on this matter.
• Petitioner also challenges the issuance of SCN as not merely a show cause notice but a final order by determining the total tax liability and required to deposit the same i.e., respondent also abuse a process of law.
• In this regard Petitioner has submitted various judicial pronouncements on the same matter settled by the various courts, decided that online gaming is no longer res-integra and these gaming services are not a nature of gambling/betting but a game of skill.

Held: –

• Hon’ble Rajasthan High Court passed an interim relief to the petitioner and held that providing online gaming services are games of skill and would not be considered as gaming of chance or betting or gambling.
• Hon’ble Court remarks that issuance of impugned SCN by the GST authorities on such services is nothing but just an abuse of the process of the law.
• Hon’ble Court directed the respondent to file a counter affidavit within a period of one month and thereafter listed the petition for admission/ final disposal immediately. Until any further order has to be passed, the respondent shall not recover any amount from the petitioner.

Conclusion: –

• Interim relief has been granted to the petitioner and finally disposed of on the next date will be listed on dated 17.02.2023 before Rajasthan High Court
• Hon’ble High Court directed the respondents to file a counter affidavit within one month and listed the petition for admission/final disposal immediately. The respondents shall not take any coercive measures to recover any amount until further order has been passed by this Court.

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