The Supreme Court, in the case of Directorate General of Goods and Services Tax Intelligence and Ors v. Gameskraft Technologies Private Limited and Ors has stayed the order on a Karnataka High Court verdict. The High Court had quashed a notice issued by the GST department, which claimed ₹21,000 crore in dues from the online gaming company Gameskraft.
The situation began after Gameskraft received an intimation notice from the GST authorities on September 8 of last year, posing a $21,000 crore demand. The High Court heard a challenge to this notice. On September 23, 2022, a single court stayed this notice after noticing that the case involved multiple difficult topics.
The online gaming corporation filed a second petition with the High Court, stating that despite the stay decision, the government had nonetheless issued a show-cause notice on the same day as the High Court’s order in an illegal, disrespectful, and spiteful manner.The petition also made note of Ramesh Prabhu, the organization’s chief financial officer, receiving a personal fine.
It was contended that the accusations in the show-cause letter from the GST authorities were identical to those in the intimation notice that had already been granted a stay of proceedings.
It was emphasised that the authorities had erred in asserting that the gameplay made possible by the petitioner was subject to a 28% tax.
In November 2021, the GST authorities raided Gameskraft’s headquarters, which resulted in an order that attached all of the company’s bank accounts.
The first estimate for the alleged tax evasion by Gameskraft was 419 crore. The gaming company argued that after July 2022, when the authorities revised their story and started alleging that Gameskraft might be partaking in gambling, this figure rose to 5,000 crore and then to over 21,000 crore.
A Bench of Chief Justice of India (CJI) DY Chandrachud and Justices JB Pardiwala and Manoj Misra sought a response from Gameskraft and listed the matter after three weeks.
Case Title: Directorate General of Goods and Services Tax Intelligence and Ors v. Gameskraft Technologies Private Limited and Ors