The Goa bench of the Bombay High Court rejected the applications of Delta Corp Limited (a leading gaming and hospitality giant) and its subsidiaries on 14th March 2024 for seeking certain documents related to showcause notices issued in September 2023.
The casino company wanted the internal documents from the Directorate General of Goods and Services Tax Intelligence (DGGI). Interestingly, the show cause notices are worth around 17,000 crores (approximately USD 2.07 billion). These notices were sent to the company seeking taxes based on the 28% rate for the face value of bets made since 2017.
The Delta Corp Limited and its subsidiaries were seeking the following documents:
- The investigation report that led to these show cause notices.
- Reasons for the involvement of the Indian Statistical Institute (ISI) for house advantage in casinos and the face value of bets.
- Communication details between the departments.
- The details of intelligence inputs that the departments collected.
Justices MS Sonak and Valmiki Sa Menezes, at the hearing, rubbished the demand for communication details and intelligence inputs between departments and said that information about ISI’s involvement had been given in show cause notices.
However, the court has granted the request for the investigation report that led to the GST investigation. The court said that the report should be given to the company within two weeks after removing sensitive information. Also, the court said that the company has to get involved in the adjudication process whether they get the investigation report or not.
The Bombay High Court has recently said that the adjudication processes of the petitions that challenge the 28% tax on the face value of bets in the online gaming and casino industries should continue without interruptions.
However, the Union government has requested that the Bombay High Court transfer this case to the Supreme Court for the judgment along with 27 similar cases that are pending in the different High Courts. The petitions of online rummy companies Gameskraft, Play Games24x7, Head Digital Works, and online gaming industry body E-Gaming Federation are expected for the hearing in April 2024.
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