Allahabad High Court Grants Oppo Interim Relief In ₹599 Crore GST Case, Issues Notice On Challenge To CGST Section 15(3)(b)

The Allahabad High Court has recently granted interim protection to Oppo Mobile India Private Limited in its challenge to the validity of Section 15(3)(b) of the Central Goods and Services Tax Act, 2017, after an adjudication order confirmed a total tax demand of Rs 599.07 crore along with equivalent penalty and interest under Section 74 of the Act, according to the writ petition. 

The order in challenge dated December 12, 2025, confirmed demands of Integrated Goods and Services Tax, Central Goods and Services Tax, and State Goods and Services Tax across multiple registrations of the company for financial years 2018-19 to 2023-24, the petition states. 

Section 15(3) deals with exclusion of discounts from the taxable value under GST. While discounts given at the time of supply are allowed if recorded in the invoice, post-supply discounts are excluded from taxable value only if they were agreed upon at or before the time of supply, specifically linked to relevant invoices, and the recipient reverses the input tax credit attributable to the discount.

The petitioner has questioned the validity of these statutory requirements and has also challenged Circular No. 92/11/2019-GST dated March 7, 2019 and a letter dated September 16, 2025 permitting composite show cause notices for multiple financial years.

A Division Bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla observed, “To the extent validity of the law has been put in question and prima facie case is made out to invite deeper scrutiny.”

The petitioner relied on the Supreme Court's decisions in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v Advani Oerlikon (P.) Ltd. and Southern Motors v State of Karnataka. It was stressed that trade discounts arising from pre-existing agreements but computed later may not give rise to any disability with the supplier vis-a-vis the transaction value or the amount receivable under such agreement

The Court also recorded the submission that deletion of the offending provision has been proposed in the Finance Bill, 2026 on the recommendation of the GST Council

On merits, objection was raised to the invocation of Section 74 of the Act

Section 74 applies in cases where tax is alleged to have been short paid or input tax credit wrongly availed by reason of fraud, wilful misstatement or suppression of facts.

Issuing notice to the Attorney General of India, the bench directed that subject to deposit of 10 percent of the disputed tax including any amount already deposited or recovered, no further recoveries shall be made from the Oppo during pendency of the writ petition