Punjab & Haryana HC: Probo gets relief from GST Dept freeze in Rs 1500 crore tax demand

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The Punjab and Haryana High Court directed the state GST department to not initiate any coercive action against the online opinion trading app, Probo Media Technologies, in respect of the GST Notice demanding Rs. 1500 crore.

The Court referred to an earlier statement of the GST department counsel to not take any coercive action in a similar case involving Witzeal Technologies.

In Witzeal Technologies case, the Court directed the GST department to not take any coercive action against the online gaming operator till an empowered Group of Ministers (GoM) set up to look into online gaming, casinos and lotteries submits its report.

In the present case, the bench of Justice Ritu Bahri and Justice Manisha Batra has stated that no coercive steps for the recovery of the amount demanded in the show cause notice shall be taken and further directed that 50% of the amount present in the attached account be defreezed to ensure carrying out day to day business activities by Probo.

The Haryana GST Intelligence Unit had issued a show cause notice dated 19 May 2023 under Section 74 of the Act on Goods and Services Tax amounting to Rs 1500 crore along with interest and penalty under the provisions of the GST Act. The company’s bank accounts were also provisionally attached and frozen.

Referrig to the fact that GoM and GST Council couldn’t come to a decision, the petition by Probo said, “The aforesaid events would show that the issue of taxability of online gaming has never fructified in a fruitful manner owing to various intricacies and the technicalities involved.” The next date of hearing is set as 17 August 2023.

While so, the GST Council is set to meet later this month. However, the issue of taxation on online gaming, casinos, and horse racing may not come up for discussion.