Indian judicial rulings on corporate liability and GST

Indian courts have issued several significant rulings concerning corporate liability and Goods and Services Tax (GST) applications.

In August 2026, the Gujarat High Court addressed the taxation of corporate guarantees in the case of Torrent Power Ltd. v. Union of India and Others. The court ruled that while guarantees provided by holding companies to support subsidiaries may be recognized as a taxable supply, the valuation must follow constitutional fairness and avoid mechanical or retroactive applications of Rule 28(2).

By September 2026, the Supreme Court of India expanded on these legal themes. In the case of Sanofi India Ltd. v. Central Bureau of Investigation, involving allegations of procurement manipulation at the Bhabha Atomic Research Centre, the Court established a three-stage framework for attributing mens rea to a corporation. The Court ruled that a corporation can face prosecution for criminal offenses even if no specific director, official, or employee is named as a co-accused, noting that the absence of a named human ‘alter ego’ cannot serve as a procedural shield to quash investigations.

Additionally, the Supreme Court upheld a decision to quash a ₹363 crore GST demand against Vodafone Idea, ruling that tax proceedings cannot be initiated against an entity that has ceased to exist due to a merger.