Atlanta Infra Assets Limited Vs Union of India and Others
Date: January 16, 2026
Subject Matter
Coercive Action Barred on Corporate Guarantees as Supply Pending Legal Clarification
Summary
The High Court has adjourned the matter concerning whether corporate guarantees offered to subsidiaries are to be considered a 'supply' under GST. While the substantive legal question is pending, the Court has granted interim protection by directing the Revenue to provide a seven-day clear notice before taking any coercive action against the Petitioner.
Summary of Facts and Dispute:
- Impugned Action: The issue arises from an Order in Original passed by State Authorities under the provisions of the Central Goods and Services Act. The core dispute is whether corporate guarantees offered by the Petitioner to its subsidiaries (Mora Tollways Limited for Rs.700 crores and Atlanta Ropar Tollways Pvt.Ltd for Rs.170 crores) are to be considered a 'supply'.
- Petitioner's Argument: The judgment text does not explicitly detail the petitioner's arguments; however, it implicitly challenges the classification of corporate guarantees as a 'supply' under GST.
- Core Question of Law: Whether the corporate guarantees offered by the Petitioner to its subsidiaries constitute a 'supply' under the provisions of the Central Goods and Services Act.
Key Legal Issues & Findings:
Consideration of Corporate Guarantees as Supply and Interim Relief
The Court noted that a similar legal issue regarding corporate guarantees being considered a 'supply' under GST had been considered in Schloss HMA Pvt.Ltd. Vs. Union of India and others (Writ Petition No.60 of 2025, dated 8-1-2025) and other pending petitions.
- Adjournment for Combined Hearing: The proceedings are adjourned to 16th February 2026, at 3:00 p.m., to be listed and heard along with companion matters addressing the same legal question.
- Exchange of Pleadings: Parties are directed to place on record an appropriate list of dates and legal propositions, and the reply affidavit from the Revenue must be served on the Petitioner's advocate well in advance.
- Interim Protection against Coercive Action: In the interim, if any coercive action is intended to be taken against the Petitioner in relation to this issue, a seven-day clear notice must be given to the Petitioner.
Ruling:
- Outcome: The Court has not rendered a final verdict on the substantive issue but has granted interim protection against coercive action.
- Directions: The proceedings are adjourned to 16th February 2026, for a combined hearing with similar matters. Parties are to exchange relevant documents and propositions.
- Liberty: The Revenue is directed to provide a seven-day clear notice to the Petitioner before initiating any coercive action.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
We have heard Mr.Raichandani, learned counsel for the Petitioners and Ms.Chavan, learned Additional Government Pleader for Respondents-Revenue. At the outset we may observe that the short issue, as canvassed in the present petition, relates to the Petitioner offering corporate guarantees to the subsidiaries namely Mora Tollways Limited of Rs.700 crores and Atlanta Ropar Tollways Pvt.Ltd of Rs.170 crores be considered to be a supply, is the issue for consideration, although arising out of an Order in Original under the provisions of Central Goods and Services Act by the State Authorities. Mr.Raichandani as also Ms.Chavan have stated that in Schloss HMA Pvt.Ltd. Vs. Union of India and others1, similar issue had fallen for consideration of this Court as also there are other petitions which are pending admission. In some of the petitions reply affidavits have been filed and in some affidavits are yet to be filed.
2. In this view of the matter, we adjourn these proceedings to 16th February 2026, at 3.00 p.m.. To be listed along with companion matters, list of which is to be provided by learned Additional Govt.Pleader so that we can hear the parties on law and endeavour to pass appropriate order.
3. In the meantime, let an appropriate list of dates along with propositions be placed on record. Reply affidavit be served on the advocate for the Petitioner well in advance.
4. In the meantime, in the event any coercive action is intended to be taken against the Petitioner, a seven days clear notice shall be given to the Petitioner.
Notes:
1. Writ Petition No.60 of 2025, dated 8-1-2025