Read Time: 04 minutes

The online fantasy sports platform Dream11 has withdrawn its petition from the Bombay High Court challenging the Rs. 1200 crore GST show-cause notice issued to the company.

The show-cause tax notices, pertaining to tax evasion for the fiscal years 2017-2018 and 2018-2019, were issued to the company.

In response, the company contested the tax department's action and sought the production of documents for those years, arguing that these notices were time-barred.

Additionally, the company contended that the GST council officially notified a 28% GST rate on fantasy platforms, effective from October 1, 2023, without providing retrospective effect. Despite this, Dream11 was arbitrarily subjected to the rate applicable from October 1, 2023.

The Additional Government Pleader, Jyoti Chauvan, appearing for the State Government, informed the bench that the Deputy Commissioner of State Tax had withdrawn the show-cause notice issued to Dream11.

She informed the bench that the notice was withdrawn since the Directorate General of GST would be issuing fresh notices to the company and would be pursuing the case against Dream11.

In addition to Dream11, the division bench of the high court, comprising Justice GS Kulkarni and Justice Jitendra Jain, was also hearing another petition filed by Playerz Sports Media Pvt Ltd, which is also a fantasy sports platform.

Playerz Sports had challenged the show-cause notices issued by the state tax department, totalling Rs. 532 Crores.

Playerz Sports contended that the amendment was effective from October 1, 2023, and could not have been applied retrospectively. It also challenged the constitutionality of Section 15(5) of the Central CGST Act, arguing that it suffers from excessive legislation.

The division bench proceeded to issue a notice to the Attorney General of India, R. Venkataramani, since the constitutionality of the act was challenged.

Advocate Jitendra Mishra, appearing for the state government, informed the bench that the state tax department would not pass any orders if the petitioners participate in the proceedings and file their replies to the show-cause notices.

The court accepted the statement and postponed the matter for 6 weeks.

Case title: Sporta Technology Pvt Ltd. Vs UOI & Ors.