# Indian judicial rulings on corporate liability and GST

> Live situation record from CLSTR: https://clstr.news/situations/indian-judicial-rulings-on-corporate-liability-and-gst
> Updated: 2026-09-08T05:19:56.000Z. Sources: 6. Developments: 2.

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.

## Timeline

### 2026-09-08: Supreme Court of India rules companies can face prosecution without naming officials

The Supreme Court of India ruled that companies can face criminal prosecution for offenses requiring mens rea even if no specific individual employee or director is named as an accused.

4 sources. https://clstr.news/cluster/supreme-court-of-india-issues-rulings-on-corporate-liability-and-gst

### 2026-08-20: Gujarat High Court rules on GST for corporate guarantees

The Gujarat High Court ruled that corporate guarantees can be subject to GST even without explicit fees, but emphasized that valuation must be reasonable and not applied mechanically or retroactively.

2 sources. https://clstr.news/cluster/gujarat-high-court-rules-on-gst-for-corporate-guarantees

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Cite as: Indian judicial rulings on corporate liability and GST. CLSTR, https://clstr.news/situations/indian-judicial-rulings-on-corporate-liability-and-gst