Petitioner Challenges GST Liability on Online Fantasy Sports | HC Directs to Issue Notice to Govt. Seeking Section 15(5) as Unconstitutional

Case Details: Playerzpot Media (P.) Ltd. v. Union of India - [2023] 157 taxmann.com 342 (Bombay)

Judiciary and Counsel Details

• • G.S. Kulkarni & Jitendra Jain, JJ.
  • Jitendra B. Mishra, Mr Satyaprakash Sharma, Ms Sangeeta Yadav & Ms Jyoti Chavan, Addl. GP for Respondent.

Facts of the Case

The petitioner, engaged in the business of online fantasy sports games, was issued a Show Cause Notice (‘SCN’) to pay tax on the consideration received from the participants of the fantasy sports. The petitioner contended that the activities are not chargeable to GST as neither it constitutes supply of goods nor supply of services. It also challenged that Section 15(5) of the CGST Act, 2017 is unconstitutional.

It contended that the provisions of the law have been challenged in other cases as well before the Courts wherein a similar issue is involved. Notably, Courts have admitted those petitions considering the challenge in the provisions of the law. The Courts have restrained the revenue from taking any further actions in such cases and time is granted to the petitioners to file a reply.

High Court Held

Accordingly, the High Court held that it needs to pass a similar Order that has been passed by the Court in similar matter. Accordingly, a Notice is to be issued to the Attorney General in so far as the challenge to the provisions of the law is concerned. Further, on the one hand, it directed the petitioner to file a reply to the SCN, and, on the other hand, directed the revenue to not pass an Order without the leave of the Court. Also, it provided a liberty to the Revenue to apply before the Hon’ble Chief Justice for clubbing the matters to be heard by an appropriate division bench.