Whether offline/online games such as Rummy which are mainly/preponderantly/substantially based on skill and not on chance, tantamount to ‘gambling or betting’ as contemplated in Entry 6 of Schedule III of the Act –— The main question/issue that arises for consideration in these petitions is whether offline/online games such as Rummy which are mainly/preponderantly/substantially based on skill and not on chance, whether played with/without stakes tantamount to ‘gambling or betting’ as contemplated in Entry 6 of Schedule III of the Act. The court observed that there is a distinct difference between games of skill and games of chance; games such as rummy, etc. as was discussed in several decisions and particularized in the Division Bench decision of this Court in All India Gaming Federation’s case. The said judgment is a total and complete answer not only to the various contentions urged by the respondents but also covers the issues / questions that arise for consideration in the instant petitions. The meaning of the terms lottery, betting and gambling as contemplated in Entry 6 of Schedule III should be construed nomen juris in the light of the decisions of the Hon’ble Supreme Court, this Court and other High Courts supra which do not include games of skill. Entry 6 in Schedule III taking actionable claims out of the purview of supply of goods or services would clearly apply to games of skill and only games of chance such as lottery, betting and gambling would be taxable. A game of chance whether played with stakes is gambling and a game of skill whether played with stakes or without stakes is not gambling. A game of mixed chance and skill is gambling, if it is substantially and preponderantly a game of chance and not of skill. Rummy is substantially and preponderantly a game of skill and not of chance. Rummy whether played with stakes or without stakes is not gambling. There is no difference between offline/physical Rummy and Online/Electronic/Digital Rummy and both are substantially and preponderantly games of skill and not of chance. The subject Online/Electronic/Digital Rummy game and other Online/Electronic/Digital games played on the Petitioners’ platforms are not taxable as ‘Betting’ and ‘Gambling’ as contended by the respondents under the Act.

Held that:- The Hon’ble High Court quashed the impugned SCNs.