TaxTMI 
TaxTMI 
2020 (10) TMI 763
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...., kabaddi, basketball and hockey. It is asserted by the petitioner that the said virtual platform, namely Dream-11, allow its users to register and play various games, to form their own teams made up of real players for cricket, football, kabaddi and NBA with maximum budget of 100 crores. It is further asserted that users initially have to pay an amount of Rs. 100/-, out of which 20% is retained by respondent No.5-Dream 11, whereas 80% of the remaining balance is transferred towards the winning amount for the game. It is alleged that the game being played on the aforesaid platform is nothing else but "betting" on the cricket team. It is further alleged that online fantasy sports games are games of chance, thereby constituting illegal act of gambling/ betting and that respondent Nos.1 to 4 are not prohibiting this illegal act. 2. Further, the petitioner prays for action to be taken against the private-respondent No.5 under the Central Goods and Service Tax Act, 2017 (for short, 'the CGST Act') and the Rules made thereunder for evasion of GST. In this respect, it is alleged that the private-respondent No.5 is not paying GST under proper classification, which should be @ 28% ....
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....business has protection under Article 19(1)(g) of the Constitution of India. The counter affidavit submitted by the respondent Nos. 2 and 3, further referred to the detailed judgment of the Bombay High Court dated 30.04.2019 in Criminal Public Interest Litigation Stamp No. 22/2019 - Gurdeep Singh Sachar Vs. Union of India & Ors., (2019) 75 GST 258 (Bombay). The said PIL challenging the activities of respondent No.5 - Dream-11 as gambling and betting as well as the contention regarding alleged GST evasion was dismissed. These respondents have also referred to the earlier judgment of this Court in D.B. Civil Writ Petition No. 6653/2019 - Chandresh Sankhla Vs State of Rajasthan, reported in 2020 SCC Online Raj 264, wherein similar contentions alleging online fantasy sports games offered by respondent No.5 as gambling and betting were rejected and, therefore, it was prayed that the petition filed is in essence to personal gain and popularity and no legitimate case has been made out. 4. Respondent No.5 - Dream-11 has also filed a detailed counter affidavit dated 12.08.2020 opposing the PIL. An additional affidavit came to be submitted by the said respondent, which is on record. In the ....
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....13.12.2019 and the only issue kept open was regarding GST. He further submitted that issue of GST has already been raised by the Department in its review petition filed before the Bombay High Court, which is currently pending and insofar as the issue of gambling/betting is concerned, the stand taken by the Department in the show cause notice dated 27.05.2020 issued to the Dream-11 and the submissions made by the learned Additional Solicitor General by relying upon the order dated 13.12.2019 passed by the Hon'ble Supreme Court, made it clear that nature of business run by the private respondent No.5 was neither gambling nor betting. 6. All the parties represented through their respective counsels were heard through video conferencing and written submissions were filed by respondent No.5. 7. It would be relevant at the outset to take into consideration the fact that common definition of "gambling/betting" relied upon by the PIL petitioner as well as by the Union of India in its SLP filed before the Hon'ble Supreme Court is available in Section 65(B) (15) of the Finance Act, 1994 which reads as under:- "Section 65-B. Interpretations: (15) Betting or gambling means putti....
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....tual team and 'playing' fantasy sports game: c) The drafting of a virtual team involves the exercise of considerable skill as the user must first assess the relative worth of each athlete/sportsperson as against all athletes/sportspersons available for selection. The user has to study the rules and make evaluations of the athlete's strengths and weaknesses based on these rules. d) Further, a user's virtual team cannot be entirely or substantially consisting of athletes from a single real-world team. In the case of fantasy cricket and fantasy football games, the Dream-11 rules stipulate that not more than 7 of the 11 athletes in the virtual team may be from a single real-world team.. ... .... f) Therefore, users engaged in participating in Dream-11's fantasy sports read and understand the rules of the game published by Dream-11, and make their assessment of athletes and the selection of athletes in their virtual team on the basis of the anticipated statistics of their selection; for example, in the fantasy cricket game, a user needs to evaluate, in the case of a batsman, ... ... .... g) Furthermore, users have to select one player from amongst their v....
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....(1) (g) of Constitution of India." It can be safely deduced from these findings that the result of the fantasy games offered by respondent No.5 is not determined merely by chance or accident, but the skill of the participant determine the result of the game having predominant influence on the outcome of the fantasy game. Whether any particular team in the real world match wins or loses, is also immaterial as the selection of virtual team by the participant involves choosing players from both the teams playing in the real world. It is also clear that offering the fantasy games of Dream-11 involving substantial skills is a business activity and not wagering having protection granted by Article 19(1)(g) of the Constitution. The SLP filed by said Varun Gumber against the above judgment was dismissed by the Hon'ble Supreme Court vide its order dated 15.09.2017. The Union of India has neither filed SLP against the said judgment dated 18.04.2017 of the Punjab & Haryana High Court nor filed any review of the order dated 15.09.2017 and have thus, accepted the findings contained therein. We are, therefore, of the view that the issue whether the fantasy games played on the platform of re....
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....is stayed. In the meanwhile, said Shri Gurdeep Singh Sachar also filed an application seeking clarification of the order dated 13.12.2019. The said application was also dismissed by the Hon'ble Supreme Court after hearing the parties vide order dated 31.01.2020 holding as follows:- "It is reiterated that in accordance with our Order dated 13.12.2019, the only scope of the review filed in the Bombay High Court is with respect to GST and not to revisit the issue as to whether gambling is or not involved". 15. The present PIL re-agitates the above two issues and according to the learned Additional Solicitor General, it is not maintainable. 16. Another PIL in the case of Chandresh Sankhla (supra) was filed before this Court raising the very same allegations of gambling/betting against respondent No.5, which was dismissed vide judgment dated 14.02.2020 after considering in detail the above judgments of the High Courts of Bombay and Punjab & Haryana as well as the order of the Hon'ble Supreme Court dismissing the challenge to them holding as under:- "15. This Court finds that the issue of treating the game "Dream 11" as having any element of betting/gambling is no more res....
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....uum and on affidavit it has been submitted that they are subject to self-regulation by the industry body known as "Federation of Indian Fantasy Sports" (FIFS) founded in 2017, of which respondent No.5 is a member. The FIFS is a Section 8 Company incorporated under the Companies Act, 2013 for the purpose of self-regulation and promotion of best practices in online fantasy sports services and contests offered in India, which has issued a Charter for Online Fantasy Sports Platforms, which inter-alia imposes the following conditions:- "1.3.6 Pay-to-play contest formats on an OFSP will not be offered by a Member to users who are less than eighteen (18) years of age. ....... 1.3.12 In contests on an OFSP, the skill component of such contests is predominantly determined via a manual team selection by users. As such, users will not be offered the opportunity or option to auto-select or auto-fill any part or portion of their fantasy sports teams. 1.3.13 All users will be restricted from drafting or editing their fantasy team after the passing of a predetermined and pre-declared deadline. All contests on an OFSP will lock prior to the commencement of the underlying real-world comp....
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....ormer Director-General of Police, former Secretary, Sports Authority of India, and former Secretary, BCCI. Further, a bare perusal of the leadership team of FIFS shows that it has eminent persons from the industry as well as ex-members of regulatory bodies, who are tasked with ensuring compliance with the applicable laws and the aforesaid Charter. FIFS presently has over 35 of the largest fantasy sports companies as members, who cater to 99% of the fantasy sports users in India. The fantasy sports industry is regarded as the next sunshine industry of India which is growing exponentially and already contributing thousands of crores to the Government exchequer. They also contain safeguards to ensure that persons below 18 years of age are not allowed to participate and that the public is not being misled or cheated and that there is transparency in financial matters, prizes etc. The FIFS has also issued Self-Regulation Guidelines on Advertising Online Gaming by adopting IAMAI Guidelines to ensure that the advertisements are fair, transparent and not misleading. The guidelines prohibit advertisements by members suggesting any gambling/betting activities and there is a penalty clause as....