Interim Relief to Delta Corp: Calcutta HC stays Rs. 6384 Cr GST Demand on Online Money Gaming [Read Order]

The Calcutta High Court has granted interim relief to a unit of Delta Corp. in a matter relating to the Rs 6,384 crore payment of the shortfall goods and services tax. The court directed that no effect be given to any order passed by the tax authority in relation to the show-cause notice, the company said in an exchange filing on Wednesday, according to sources. In October, Deltatech Gaming Ltd. received an intimation for payment of the shortfall tax from the Directorate General of GST Intelligence, Kolkata. The alleged tax shortfall of Rs 6,236 crore was from January 2018 to November 2022, while another Rs. 147 crore was for July 2017 to October 2022.

The company had said that it would pursue all legal remedies available to them to challenge such tax demands and related proceedings. In September, the company received a demand notice for a goods and services tax of over Rs 16,000 crore. Delta Corp., however, said the amount claimed in the notice is “based on the gross bet value of all games played at the casinos during the relevant period.” In relation to the Rs 16,000 crore tax notice, the Bombay High Court granted interim relief in late October. The Calcutta High Court noted “the order in this writ petition has already been passed on 30th November, 2023 inter alia to insert the relevant provision relating to the WBGST Act and Rules in the prayer portion, but the same has not been done due to inadvertence. The learned advocate on record of the petitioner is granted liberty to take necessary steps as per the leave granted herein, in Court. Rest part of the order dated 30th November, 2023 shall remain unchanged.”

The Single Bench of Justice Md. Nizamuddin had stated in the earlier order, “In the meantime, there will be an interim order to the extent that petitioner shall file reply to the impugned show-cause notice dated 20th October, 2023, within 8 weeks from date without prejudice to the rights and contentions of the parties in this writ petition and the respondent authority concerned is at liberty to pass speaking order on such reply to be filed against the impugned show cause notice but no effect shall be given to the order so passed without the leave of this Court.” “Since the constitutional validity of provisions of Central Act and State Act has been challenged, let notice be issued upon the office of the learned Attorney General of India and the learned Advocate General, West Bengal”, Justice Nizamuddin stated earlier. “High Court has granted interim relief to DGL and directed that no effect shall be given to any order passed by the Tax Authority in relation to the show cause notice for the above demand without the leave of the Hon’ble High Court,” the information shared with the BSE on Thursday stated.

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