Shares of Casino operator Delta Corp rallied over 8% in early trade on Wednesday after the company got interim relief from Bombay High Court in a Goods and Services Tax (GST) case. The case pertains to ₹16,195 crore GST notice issued by the Directorate General of GST Intelligence for the payment of shortfall tax.
The Goa Bench of Bombay HC has restrained tax authorities from passing any final order on the GST notice against the casino firm without prior permission from the court. “The Hon’ble High Court of Bombay at Goa considered the writ petitions filed by the Company and its subsidiaries on 23rd October, 2023. Basis a statement made on behalf of the concerned tax authorities, the Hon’ble High Court has directed such authorities not to pass any final orders on the captioned show cause notices without the prior permission of the Hon’ble High Court,” the company said in a BSE filing on October 24.
As per the company, dates have been fixed for completion of pleadings, and the hearing and final disposal of such writ petitions.
Reacting to the news, shares of Delta Corp jumped 8.2% to ₹140.7 in the first two hours of trade so far. The stock opened at ₹136.05, up 4.6% against the previous closing price of ₹130.
At the time of reporting, the stock was trading 3.15% higher at ₹134.1, with a market capitalisation of ₹3,590 crore.
The share price of Delta Corp has witnessed sharp selling pressure in the recent months after the GST Council announced 28% uniform tax on online gaming, casinos and horse racing. Adding to the woes, the tax notice further dented sentiments. Delta Corp shares hit a 52-week low of ₹124.60 on October 16, 2023, falling 52% from its 52-week high of ₹259.95 touched on June 28, 2023.
In the last one month, Delta Corp and its subsidiaries received over ₹23,000 crore tax payment notice from DG GST for the period between July 2017 and March 2022. The tax notice is more than six times its current market capitalisation of ₹3,600 crore.
The company received the first notice worth ₹16,822 crore from the Directorate General of GST Intelligence for payment of shortfall tax last month. This included alleged tax liability of ₹11,139 crore along with interest and penalty for the period from July 2017 to March 2022, and notices of ₹5,682 crore against three of its subsidiaries — Casino Deltin Denzong, Highstreet Cruises and Delta Pleasure Cruise Company.
Other than this, the casino operator received another notice worth ₹6,384 crore from the DG GST this month. DeltaCorp in a statement to the exchanges said it has received an intimation for payment of shortfall tax under Section 74(5) of the CGST Act, 2017, and West Bengal GST Act, 2017, from the Directorate General of GST Intelligence, Kolkata. The amount of alleged tax shortfall stands at ₹62,36,81,07,830 for the period January 2018 to November 2022, and ₹147,51,05,772 for the period July 2017 to October 2022, totalling ₹6,384.3 crore, it said in a regulatory filing.
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