Section 74 of the CGST Act, 2017—Show Cause Notice—Online gaming – The petitioner Company engaged in providing online gaming services, have been served with a SCN under Section 74(1) alleging that by misclassifying their supply as service instead of actionable claims which are goods and by undertaking activities in the form of betting, has avoided tax. The Advocate for the petitioner submitted that once controversy regarding classification of the products stands settled by the decision of the Court, the respondents have no jurisdiction to issue any SCN. The court observed that a Division Bench of this Court in Chandresh Sankhla Vs. State of Rajasthan & Ors., decided on 14.02.2020 held that the issue is no longer res-integra and as such gaming services are not in the nature of betting/gambling. The SLP filed against it stands dismissed. A similar view has also been taken by a different Division Bench of this High Court in the case of Ravindra Singh Chaudhary Vs. Union of India decided on 16.10.2020, which also stands approved by the Supreme Court. Some of the games offered by the petitioners online have already been held to be games of skill rather than that of chance or that of betting/gambling. Thus when the matter is so settled by various Courts, the issuance of the impugned show cause notice is nothing but an abuse of the process of law.

Held that:- The Hon’ble High Court directed the respondents to file counter affidavit, within a period of one month and listed the petition for admission/final disposal immediately thereafter. Until further orders, the respondents shall not take any coercive measures to recover any amount.