The Allahabad High Court has granted interim protection to Oppo Mobile India Private Limited in a significant challenge to the constitutional validity of Section 15(3)(b) of the Central Goods and Services Tax (CGST) Act, 2017.
The Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla issued notice to the Attorney General of India and restrained further recovery proceedings, subject to deposit of 10% of the disputed tax.
The petitioner has assailed the validity of Section 15(3)(b) of the CGST Act, which governs the treatment of post-supply discounts while determining transaction value under GST. Senior counsel appearing for the company argued that trade discounts arising from pre-existing agreements, though quantified at a later stage, cannot be excluded from the transaction value in a manner prejudicial to the supplier.
Relying heavily on precedents under the pre-GST indirect tax regime, the petitioner cited the Supreme Court’s rulings in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Advani Oerlikon (P.) Ltd. and Southern Motors v. State of Karnataka (2017) 3 SCC 467, contending that the issue stands conclusively settled in favour of assessees. It was argued that legislative provisions taking a contrary view may not withstand judicial scrutiny in light of binding Supreme Court jurisprudence under earlier tax regimes.
The Bench noted that a prima facie case had been made out warranting deeper scrutiny, particularly since the constitutional validity of a statutory provision has been questioned.
In a development that may significantly impact the proceedings, counsel for the petitioner informed the Court that the impugned provision is proposed to be deleted through the Finance Bill, 2026, based on recommendations of the GST Council. This aspect was highlighted to suggest that the legislature itself has reconsidered the correctness or viability of the provision.
On merits, the petitioner also raised objections to the invocation of Section 74 of the CGST Act, which pertains to determination of tax not paid or short paid by reason of fraud, wilful misstatement, or suppression of facts. The company contended that such stringent provisions were improperly invoked in the present case.
Additionally, it was submitted that 10% of the disputed tax amount may have already been deposited by the assessee.
Taking note of the constitutional challenge and the prima facie case established, the High Court directed issuance of notice to the Attorney General of India.
Pending adjudication of the writ petition, the Court granted interim protection to the petitioner. It ordered that no further recoveries shall be made during the pendency of the writ petition, subject to deposit of 10% of the disputed tax amount, inclusive of any amount already deposited or recovered.
The matter has been directed to be listed on the next date with the names of all counsel appearing for the parties.
Case Details
Case Title: Oppo Mobile India Private Limited Versus UOI
Case No.: WRIT TAX No. – 1351 of 2026
Date: February 26, 2026
Counsel For Petitioner: Nishant Mishra, Vedika Nath
Counsel For Respondent: A.S.G.I., Dhananjay Awasthi
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