The High Court of Sikkim has become the first High Court to apply the Supreme Court landmark constitution bench judgment on online gaming GST (2026 INSC 595, decided 27.05.2026), disposing of two pending writ petitions challenging the constitutional validity of 28% GST on online gaming and directing the petitioners to file replies to pending show cause notices within eight weeks. The orders, by Justice Bhaskar Raj Pradhan in WP(C) Nos. 35 and 39 of 2024, mark the beginning of what will be a nationwide process of closing out the hundreds of pending writ petitions that had sheltered online gaming operators from GST adjudication.
The two petitioners — M/s Teesta Rangit Pvt. Ltd. and M/s Trio Venture Private Limited — had filed their writ petitions in 2024 challenging the levy of GST on online gaming activities on constitutional grounds. The petitions had been kept pending by the Sikkim HC after the petitioners' counsel indicated that similar matters were being heard by the Supreme Court. The Supreme Court delivered its verdict in May 2026, and the Sikkim HC was invited to dispose of the pending petitions in terms of that ruling.
The Supreme Court judgment in 2026 INSC 595 is comprehensive in its reach. It upheld the levy of GST on actionable claims arising from betting and gambling, including online gaming activities involving staking upon uncertain future outcomes. It confirmed that fantasy sports and similar formats, once they involve staking, constitute betting and gambling regardless of the skill element in the underlying game. The constitutional validity of Sections 2(31), 2(52), 7, 9 and 15 of the CGST Act — the core charging framework — was upheld. Rule 31A, introduced to operationalise the valuation of online gaming transactions, was held to be intra vires. The 2023 amendments to Entry 6 of Schedule III and the insertion of Rules 31B and 31C — which provide specific valuation frameworks for online gaming and casino transactions respectively — were held to be clarificatory and retrospective in operation.
The Supreme Court directions are equally significant for pending cases. All pending show cause notices, adjudication proceedings, and demands relating to online gaming, fantasy sports and casino transactions are to be considered and decided in accordance with the valuation frameworks in Rules 31B and 31C. Operators who have received SCNs are given eight weeks from the date of receipt of a copy of the Supreme Court judgment to file replies; the adjudicating authority has twelve weeks thereafter to pass orders. The Sikkim HC applied these timelines directly, directing the petitioners to submit replies to the pending SCNs within eight weeks of its order, with the competent authority to pass orders within twelve weeks thereafter. The Karnataka High Court's earlier Single Judge orders that had stayed demands against online gaming companies — which were restored at the Revenue's instance by the Karnataka Division Bench — are also to be adjudicated in the same manner.
For the industry, the practical consequence is that there is no longer any constitutional shelter from the 28% levy. Each SCN will need to be defended on its specific facts — including the computation of taxable value in accordance with Rules 31B or 31C — rather than on the broader constitutional ground that the levy itself is invalid.
-2026-juristway.com-2149-HC(Sikkim)-GST / 2026-juristway.com-2150-HC(Sikkim)-GST | High Court of Sikkim | 06.08.2026