A Bench led by Chief Justice DY Chandrachud while staying the HC judgment also issued notice to the online company and posted the matter for further hearing after three weeks. In the meantime, it also asked parties to file common compilations of judgments and other related documents.
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The GST authorities had on September 8 last year issued an intimation notice to Gameskraft raising the demand. However, the online rummy gaming company had challenged it before the high court, which stayed it after noting that there were several contentious issues in the case. The High Court had on May 11 revoked a goods and services tax notice against the Bengaluru-based company Gameskraft Technology over an alleged invasion of Rs 21,000 crore.
Additional Solicitor General N Venkataraman told the SC said that the services provided by Gameskraft came under betting and gambling, thereby being subject to 28% goods and services tax. He argued that the game as played on the platform involved two distinct transactions – the game of Rummy itself, and second the wager on the outcome of the game.
However, Gameskraft through its senior counsel Mukul Rohatgi and others argued that a rummy game with or without stake is a game of skill as has been held by the apex court in its earlier judgments.
The Show Cause Notice issued by the GST department had alleged that Gameskraft had evaded Goods and Service tax by mis-classifying its supply as “services” and not as “actionable claims,” which are goods, thereby mis-declaring the taxable value of the supply. The company submitted fake/back dated invoices, that was uncovered during a forensic examination of the documents, it alleged.
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