The Supreme Court on Friday refused to grant a stay order on the show-cause notices recently issued by tax authorities to online gaming firms, and adjourned the hearing for writ petitions to 8 January.
The writ petitions were filed by E-Gaming Federation (EGF), Play Games24x7 and Head Digital Works, against retrospective goods and services tax (GST) claims collectively totaling more than Rs. 1 trillion.
With the petition for a stay order rejected, the gaming companies now fear more show-cause notices could be issued amid the legal debate on gambling versus skill-based gaming still remaining unsettled.
A 3-judge bench of the Supreme Court headed by Chief Justice D.Y. Chandrachud, refused to issue a notice on the gaming industry’s writ petition, stating that the government’s counsels, headed by additional solicitor general N. Venkataraman, had not yet received a copy of their writ petition.
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Senior lawyer Harish Salve representing EGF and the gaming firms submitted that the matter has a high significance and show cause notices worth several times the companies’ turnover are being issued. He also expressed the concern that if the notices translate into demands, it will be leading the gaming firms into bankruptcy. Salve further urged the apex court to provide interim protection, restraining tax authorities from issuing any further notices until the further hearing on the matter.
Earlier in the Gameskraft case, the Supreme Court issued an ad-interim stay on the Karnataka High Court‘s decision quashing a massive show cause notice of Rs. 21,000 crore issued to the company. Chief Justice Chandrachud noted that similar GST-related online gaming issues were pending in the court, stating that interim relief could not be granted to these gaming companies at this stage.
Following this, the Supreme Court has asked for the copies of the writ petitions to be provided to the ASG. The court has also directed to consolidate these matters with the Gameskraft case. The next hearing for these cases is slated for January 8, 2024, after the apex court’s winter vacations.
Source: https://g2g.news
