Point of Law: Fantasy games predominantly involve skill and therefore, do not fall within gambling activities and that said games are protected u/a 19(1)(g) of Constitution.

ORDER :

The main question/issue that arises for consideration in these petitions is, whether offline/online games such as Rummy which are mainly/preponderantly/substantially based on skill and not on chance, whether played with/without stakes tantamount to ‘gambling or betting’ as contemplated in Entry 6 of Schedule III of the Goods and Services Act, 2017.

I. FACTUAL MATRIX

M/s.Gameskraft Technologies Pvt. Ltd., (for short ‘the GTPL’) claims to be an Online Intermediary Company incorporated in June 2017, who runs technology platforms that allow users to play skill based online games against each other. Petitioner -GTPL contends that it has over 10 lakh users from across India and is headquartered in Bangalore and registered under the Central Goods and Services Tax Act, 2017 (for short ‘ the CGST Act’) and the Karnataka Goods and Services Tax Act, 2017 (for short ‘the KGST Act’). It is contended that the said company is a legally compliant company, who has been duly filing GST returns and has paid GST and is a bonafide tax payer having paid tax returns on a timely basis and has paid substantial tax to the tune of Rs.1,600/-crores under GST and Income Tax Laws upto June 2022.

2. During the period between 11.11.2021 and 13.11.2021, the respondents – Revenue undertook search and seizure operations of the premises of GTPL, during which, various documents and devices were seized and panchanamas were issued. On 17.11.2021, respondents passed Provisional Attachment Orders attaching the Bank accounts of GTPL under Section 83 of the CGST Act, to which, objections were filed by GTPL, pursuant to which, respondents passed an Attachment Confirmation order dated 30.11.2021.

3. W.P.No.22010/2021 is preferred by GTPL challenging the aforesaid attachment orders and on 03.12.2021, this Court passed an interim order permitting the petitioner to operate the Bank accounts for limited purposes mentioned in the said order.

4. Meanwhile, the officials/founders/employees of GTPL were summoned by the respondents for recording of statements and the same continued upto August, 2022. On 02.08.2022, in addition to the interim order passed earlier in W.P.No.22010/2021, this Court directed that no precipitative action be taken against the petitioner – GTPL and the matter was heard finally and reserved for orders on 07.09.2022 by continuing the interim orders/directions.

5. Subsequently, on 08.09.2022, respondents issued Intimation Notice under Section 74(5) of the CGST Act, calling upon GTPL to deposit a sum of Rs.2,09,89,31,31,501/-along with interest and penalty by 16.09.2022. The said Notice is challenged in W.P.No.18304/2022, in which, this Court passed an interim order of stay dated 23.09.2022.

6. Immediately thereafter, the respondents issued the impugned Show Cause Notice under Section 74(1) of the CGST Act to the petitioner – GTPL as well as its Founders, CEOs and CFOs, who have preferred W.P.No.19570/2022, W.P.No.19561/2022, W.P.No.20119/2022 and W.P.No.20120/2022. Accordingly, the details of the instant writ petitions are as under:

(a) W.P.No.22010/2021 has been preferred by GTPL challenging the Attachment orders dated 17.11.2021 and 30.11.2021;

(b) W.P.No.18304/2022 is preferred by GTPL against the Intimation Notice dated 08.09.2022 issued under Section 74(5) of the CGST Act;

(c) W.P.No.19570/2022 is filed by GTPL assailing the impugned Show Cause Notice (SCN) dated 23.09.2022;

(d) W.P.No.19561/2022 is preferred by the Chief Financial Officer of GTPL challenging the impugned SCN dated 23.09.2022;

(e) W.P.No.20119/2022 is preferred by the Founders of GTPL challenging the impugned SCN dated 23.09.2022;

(f) W.P.No.20120/2022 is preferred by the Chief Executive Officers of GTPL challenging the impugned SCN dated 23.09.2022;

7. At the outset, it is relevant to state tha