Calcutta HC Grants Interim Relief to Delta Corp Unit in Rs. 6,384 Cr GST Demand Case

Case Name:

Deltatech Gaming Ltd. v. Directorate General of GST Intelligence, Kolkata

Key Takeaways:

1. Calcutta High Court granted interim relief to Deltatech Gaming Ltd., a unit of Delta Corp, in a matter related to a significant GST demand of Rs 6,384 crore.
2. The court directed that no effect be given to any order passed by the tax authority in relation to the show-cause notice, providing temporary respite to the company.
3. Legal challenges and proceedings have been initiated by the company to contest the substantial GST demands, highlighting the complexities and financial implications involved in the taxation of online money gaming.

Case Synopsis:

Based on the information provided, it seems that the Calcutta High Court has granted interim relief to a unit of Delta Corp, Deltatech Gaming Ltd., in a matter related to a significant Goods and Services Tax (GST) demand. Here’s a breakdown of the key points from the provided text:

Case Summary:

• Company: Deltatech Gaming Ltd., a unit of Delta Corp
• GST Demand: The company received an intimation for payment of the shortfall tax from the Directorate General of GST Intelligence, Kolkata. The alleged tax shortfall amounted to Rs 6,236 crore from January 2018 to November 2022, with an additional Rs. 147 crore for July 2017 to October 2022.
• Legal Action: The company stated that it would pursue all legal remedies available to challenge such tax demands and related proceedings.
• Previous Notice: In September, the company received a demand notice for a goods and services tax of over Rs 16,000 crore, which was based on the gross bet value of all games played at the casinos during the relevant period.
• Interim Relief: The Calcutta High Court granted interim relief to Deltatech Gaming Ltd., directing that no effect be given to any order passed by the tax authority in relation to the show-cause notice.

Legal Proceedings:

• Court Orders: The High Court noted that an order had been passed on 30th November, 2023, and the learned advocate on record of the petitioner was granted liberty to take necessary steps as per the leave granted.
• Reply to Show-Cause Notice: The court ordered that the petitioner shall file a reply to the impugned show-cause notice dated 20th October, 2023, within 8 weeks from the date, without prejudice to the rights and contentions of the parties in the writ petition.
• Constitutional Validity Challenge: Since the constitutional validity of provisions of the Central Act and State Act has been challenged, notice was to be issued upon the office of the learned Attorney General of India and the learned Advocate General, West Bengal.

Conclusion:

The High Court’s interim relief to Deltatech Gaming Ltd. is significant, as it directs that no effect be given to any order passed by the Tax Authority in relation to the show-cause notice for the above demand without the leave of the Hon’ble High Court.

This case highlights the legal complexities and significant financial implications involved in the taxation of online money gaming and the challenges faced by companies in contesting substantial GST demands.

FAQ:

Q1: What was the basis of the substantial GST demand faced by Deltatech Gaming Ltd.?

A1: The demand notice was based on the alleged tax shortfall of Rs 6,236 crore from January 2018 to November 2022, with an additional Rs. 147 crore for July 2017 to October 2022, as well as a separate demand notice for a goods and services tax of over Rs 16,000 crore based on the gross bet value of all games played at the casinos during the relevant period.

Q2: What was the nature of the relief granted by the Calcutta High Court?

A2: The court granted interim relief, directing that no effect be given to any order passed by the tax authority in relation to the show-cause notice, providing temporary respite to Deltatech Gaming Ltd. from the substantial GST demand.