Online gaming GST issue serious and sensitive says ASG, SC lists A23, RummyCircle writs for further hearing on 8th January

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A 3-judge bench of the Supreme Court comprising of Chief Justice of India DY Chandrachud and Justices JB Pardiwala and Manoj Misra issued notice on writ petitions filed by E-Gaming Federation, Head Digital Works Private Limited (operator of online rummy platform A23) and Play Games24x7 Private Limited (operator of My11Circle and RummyCircle) while refusing to stay the showcause notices issued to online rummy companies or pass any interim directions.

At the outset, N. Venkatraman, Additional Solicitor General of India (ASG) submitted that the Finance Ministry took cognisance of a news article and asked him to appear today in the writ petitions, although no caveat was filed and an advance copy of the writ petition was not served. He submitted that the issue pertains to taxation on online gaming, and it is a fairly serious and sensitive matter.

Harish Salve, Senior Counsel representing EGF and the online rummy companies submitted that the matter has all India significance and showcause notices worth several times the companies’ turnover are being issued. He further submitted that if the notices fructify into demands, then the companies are looking at bankruptcy. He further prayed that assurance be given that the department keep their hands off and no action on the showcause notices be taken until further hearing.

Referring to the Gameskraft matter where the Supreme Court issued ad-interim stay on the Karnataka High Court judgment quashing the Rs. 21,000 crore showcause notice issued to the company, CJI Chandrachud remarked that adjudication on the GST issues pertaining to online gaming was pending before this court in a similar manner and no interim relief can be granted to the online gaming companies at this stage.

The Supreme Court thereafter asked for copies of the writ petitions to be served on the ASG and directed the matters to be tagged along with the Gameskraft matter and listed the matters for further hearing on 8th January 2024, after the winter vacations of the apex court.