Punjab & Haryana High Court: No Coercive Action to be taken Against Probo Media Technologies for GST Notice of Rs. 1500 Crores

Punjab & Haryana High Court: No Coercive Action to be taken Against Probo Media Technologies for GST Notice of Rs. 1500 Crores

The Punjab and Haryana High Court has ordered to not to initiate any coercive actions against the online opinion betting app, Probo Media Technologies, in respect of the GST Notice demanding Rs. 1500 crores.

The bench of Justices Ritu Bahri and Manisha Batra refused to order any coercive steps for the recovery of the amount demanded in the show cause notice shall be taken and further ordered that 50% of the amount present in the attached account to be released.

The factual matrix of the case is that the petitioner company is an online intermediary or marketplace that owns and manages a mobile gaming application as well as a web-based gaming portal named ‘Probo.’ It facilitates adult players to trade their skill, knowledge, experience, or analysis-based opinions on sporting and non-sporting events with other users or players and charges a service fee for such facilitation services.

The Haryana GST Intelligence Unit had issued a show cause notice under Section 74 of the Goods and Services Tax Act, 2017 amounting to Rs. 15,00,89,32,218 along with interest and penalty under the provisions of the GST Act. The company’s bank accounts were also provisionally attached and frozen.

The learned counsel for the petitioner relied on the judgment passed by the Punjab and Haryana High Court in the case of 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 came.

According to the petitioner, till date no clarification has been given by the Group of Ministers, who are examining the issue on the question of whether the skill games that are being facilitated by the petitioner are to be charged as a game of chance at 28% on the entire bet value.

The petitioner stated that they have already paid 18% GST on platform fees.

Subsequently, the Court, while taking into account a previous order in which the state government had suffered a statement that clarification on taxation is a pending decision with the empowered group of ministers, directed that no coercive actions must be taken.