Case Law Details
Probo Media Technologies Private Limited Vs Union of India (Punjab and Haryana High Court)
Introduction: In the case of Probo Media Technologies Private Limited Vs Union of India, the Punjab & Haryana High Court directed a partial defreezing of funds for an online betting application facing a GST notice of Rs. 1500 crores. The decision echoes the precedent set in a previous case, Witzeal Technologies Pvt Ltd. vs. Union of India and Ors., amidst ongoing investigations about GST applicability on skill games facilitated by the petitioner’s platform.
Analysis: The petitioner’s counsel pointed out that no clarification has been given by the Group of Ministers about whether the skill games, facilitated by the platform, should be charged as a game of chance at 28% on the entire bet value. They also asserted that they have already paid 18% GST on platform fees. The counsel also contested that they had paid 18% GST on a total turnover of Rs.86 crore over two years, while the amount attached was Rs.97.95 crore. The court, in keeping with an earlier ruling, decided to defreeze 50% of the attached amount and ordered that no coercive steps be taken for the recovery of the amount demanded, allowing the petitioner company to continue day-to-day operations.
Conclusion: The Punjab & Haryana High Court’s decision in Probo Media Technologies Private Limited Vs Union of India reflects an interim measure to ensure business continuity amid ongoing investigations. It emphasizes the need for clear regulatory guidelines concerning the application of GST to online platforms, particularly those facilitating skill games.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
Learned counsel for the petitioner has referred to the judgment dated 29.09.2021 passed by this Court in CWP-18780-2021 titled as Witzeal Technologies Pvt Ltd. vs. Union of India and Ors., where on a statement given by the State counsel, the matter was disposed of keeping in view the assurance that the empowered Group of Ministers was investigating the matter and they would take necessary steps only when clarification comes.
Learned counsel for the petitioner states that till date no clarification has been given by the Group of Ministers, who are examining this issue on the question whether the skill games which are being facilitated by the petitioner are to be charged as a game of chance at 28% on the entire bet value.
Learned counsel for the petitioner states that on platform fees, they have already paid GST @ 18%.
Notice of motion.
Mr. Rishabh Kapoor, Sr. Standing Counsel accepts notice on behalf of respondents No. 1 and 4 and Mr. Sharan Sethi, Addl. A.G., Haryana. accepts notice on behalf of respondents No. 1 and 2.
Learned counsel for the respondents will inform this Court about the stage of the investigation.
Learned counsel for the petitioner contested that 18% GST has been paid on the total turn-over i.e Rs.86 crore in two years. The attachment made of Rs.97.95 crore approximately.
Keeping in view the order dated 29.09.2021 passed in CWP-18780-2021, where the State counsel has made a statement that they will not initiate any coercive step against the petitioner, in the present case also, no coercive steps will be taken for recovery of the amount demanded as per the show cause notice dated 19.05.2023 (Annexure P-1) and 50% of the attached amount should be defreezed so that the petitioner-company can carry out its day to day working.
Adjourned to 17.08.2023.
