Breaking: Supreme Court stays Karnataka HC order in Gameskraft GST matter, paves way for proceedings on 35 other gaming companies

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The long awaited GST Department appeal in the GamesKraft INR 21,000 tax demand matter was heard today by a three member Supreme Court bench headed by Chief Justice.

N. Venkatraman, the additional solicitor general appearing on behalf of the GST Department submitted that the single bench of the Karnataka High Court has made serious allegations against the department due to which 35 other showcause notices to other online gaming companies have not been issued. He further submitted that there are direct judgments of the Supreme Court that have held game of skill like rummy when played for stakes to be within the ambit of betting & wagering.

Chief Justice orally asked whether it is really a game of skill or does it amount to wagering. Despite vehement opposition from Dr. Abhishek Manu Singhvi, learned senior counsel appearing on behalf of Gameskraft (who was on caveat) as well as Mr. Mukul Rohatgi and Mr. Sajan Poovayya on behalf of intervenor federations, the Supreme Court stayed the single bench judgment of Karnataka High Court quashing the Rs. 21,000 crore showcause notice issued to Gameskraft, thereby reviving the show cause notice proceedings.

The Supreme Court ordered issuance of notice returnable in 3 weeks, counter-affidavit to be filed within 2 weeks, including common compilation of judgments and written submissions. Until further orders, there will be ad-interim stay of the Karnataka High Court judgment.

With the court staying the Gameskraft judgment, department can now conduct proceedings in Gameskraft matter & issue notices to other similarly placed online skill gaming companies.