SCO.LR | 2026 | Volume 1 | Issue 2

Volume 1 Issue 2 of Supreme Court Observer Law Reports (SCO.LR) is here! In this Issue, we cover five important judgements delivered by the Supreme Court in its first week of 2026!  

We look at judgements covering the levy of customs duty, the right to speedy trial under Article 21, the extent of High Court’s power to grant bail under Section 439 of the CrPC, flexibility of admission policy after initiation and the cancellation of highest bid in public auction. 

Our SCO.LR page features weekly judgements in clean, readable format. Use our assistive mindmaps and hyperlinking features to streamline your legal research experience. 

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The Supreme Court Observer Law Reports

SCO.LR | Volume 1 | Issue 2

5 January– 10 January 2026

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Limits to Subordinate Legislation in Tax Matters

Adani Power v Union of India

5 January 2026

Citations: 2026 INSC 1 | 2026 SCO.LR 1(2)[6]

Bench: Justices Aravind Kumar and N.V. Anjaria

The Supreme Court held that the executive cannot retain the amount collected under a levy which was imposed without the authority of law. Further, the executive also cannot retrospectively impose tax liability without explicit legislative authority.

The Finance Act 2010 introduced a 16 per cent customs duty on electricity cleared from a Special Economic Zone (SEZ) to a Domestic Tariff Area. This was to operate retrospectively from 26 June 2009. In February 2010, the Union government issued a notification (25/2010), which was challenged at the Gujarat High Court. While this petition was pending, the Union issued a notification reducing the rate of tax to 10 paise per unit (91/2010). Later, in 2012, this was reduced to 3 paisa (26/2012). These did not formally undo the 25/2010 notification. In 2015, the Gujarat High Court held that no customs duty could be imposed and the retrospective levy of tax violated Article 265 of the Constitution. The appellant sought a refund of the tax collected under the notifications, stating that customs duty was struck down by the High Court. The High Court rejected the petition and held that the notifications, 91/2012 and 26/2012, were not expressly struck down in the 2015 proceedings.

The Supreme Court set aside the High Court Judgement. It held the 2010 and 2012 notifications did not create a new levy but only continued the levy in an altered form. Further, it stated that the change in arithmetical rate to the levy of tax does not cure the lack of authority principle. Moreover, it added that the restitution of the amount is necessary when illegality is discovered.

Keywords/Phrases: Customs duty levied—Finance Bill 2010—SEZ–DTA—Invalid under Article 265—Validity of notification—Executive–Subordinate Legislation—No executive power to impose tax liability—High Court order set aside. 

Read the Judgement here. 

MIND MAP 

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Right to Speedy Trial Under Article 21

Arvind Dham v Directorate of Enforcement

6 January 2026

Citations: 2026 INSC 12 | 2026 SCO.LR 1(2)[7]

Bench: Justices P.V. Sanjay Kumar and Alok Aradhe

The Supreme Court held that prolonged pre-trial incarceration under Prevention of Money Laundering Act (PMLA), 2002, violates the right to speedy trial under Article 21. Bail can be granted in cases where the trial shows no realistic prospect of early commencement. 

The appellant was arrested by the Enforcement Directorate in July 2025 after he was accused of being the ultimate beneficiary of diversion and siphoning of public funds. Banks alleged a fraud exceeding  ₹670 crore. He had remained in custody for over 16 months. His bail plea was rejected by the Special Court and the Delhi High Court, on the ground that he did not satisfy the proviso to Section 45 of the PMLA.

The Supreme Court set aside the High Court’s order and granted bail to the appellant. It held that the right to speedy trial is not eclipsed by the nature of the offence. Moreover, economic offences cannot be treated as a homogeneous class warranting a blanket denial of bail. 

Keywords/phrases:  Bail under Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA)—Right to speedy trial—Article 21 of the Constitution—Right not eclipsed by nature of offence—No blanket denial of bail in economic offences—High Court Judgement set aside 

Read the Judgement here.

MIND MAP 

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Cancellation of Highest Bid in Public Auction

Golden Food Products India v State of Uttar Pradesh

6 January 2026

 Citations: 2026 INSC 22| 2026 SCO.LR 1(2)[8]

Bench: Justices B.V. Nagarathna and R. Mahadevan

The Supreme Court held that where a public auction has been conducted in accordance with law and the highest bid is above the reserve price, the auctioning authority cannot cancel the bid merely on the expectation that a higher price could be obtained in a future auction. In the absence of fraud, collusion or material irregularity, such cancellation is arbitrary and violative of Article 14.

Golden Food Products India, the appellant, participated in an auction conducted by the Ghaziabad Development Authority (GDA), the respondent, for allotment of an industrial plot under the Madhuban Bapudham Yojana. The appellant’s technical and financial bids were approved and it was declared the highest bidder at Rs.29,500 per square metre, which was above the reserve price of Rs.25,600 per square metre. Thereafter, the GDA cancelled the auction on the ground that smaller plots in the same scheme had fetched higher prices per square metre. The Allahabad High Court dismissed the writ petitions, holding that the appellant had no indefeasible right to insist upon allotment.

The Supreme Court set aside the High Court’s orders. It held that the comparison of the appellant’s bid for a large plot with bids received for much smaller plots was an irrelevant consideration. The Court observed that demand for smaller plots is ordinarily higher and that identical reserve prices had been fixed for plots of different sizes. Once the highest bid was found to be above the reserve price, the GDA was under an obligation to proceed with allotment.The cancellation was held to be arbitrary and irrational, and GDA was directed to issue an allotment letter to the appellant.

Keywords/phrases: Public auction cancellation—highest bidder—reserve price—expectation of higher bid—arbitrary cancellation—Article 14—absence of fraud or collusion—sanctity of auction process—comparison with dissimilar plots—irrelevant consideration

Read the Judgement here.

MIND MAP 

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Modification of Admission Policy

Divjot Sekhon v State of Punjab

6 January 2026

Citations: 2026 INSC 26 | 2026 SCO.LR 1(2)[9]

Bench: Justices P.V. Sanjay Kumar and Alok Aradhe

The Supreme Court held that modifications to admission criteria made midway through the admission process violates principles of fair play in action. Finding a lack of valid justification for the modifications, it highlighted the need for transparency to prevent arbitrariness. 

The High Courts of Punjab and Haryana had dismissed three appeals challenging the modification to the admission policy of NEET (UG) candidates seeking admission under the sports quota at Baba Farid University of Health Sciences, Faridkot. The first two appeals challenged modifications to the 2024 academic session which permitted submission of sports achievements from all years/classes rather than limiting it to Class XI and XII. The third appeal challenged extension of this modified criteria into the 2025 session.

The Supreme Court held that there was no valid reason to modify the admission policy. It observed that the modification was made in special circumstances in the aftermath of the Covid-19 pandemic and was contrary to the State’s Sports Policy 2023. Further, the University and the State had not acted in accordance with the fair play mandate under Article 14. It pointed out that such modified parameters were not extended to other allied courses in the same university. Moreover, the modification was carried out after representations were made by the father of a candidate who benefitted from the change.

Keywords/phrases: Altering rules for admission process—Prospectus revised for sports quota candidates—achievements of all years to be considered—Modification challenged by adversely affected candidates—Elasticity permits arbitrariness and nepotism—Lack of valid reasons—Malafide intent—Modification quashed.

Read the Judgement here.

MIND MAP 

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High Court’s Power to Grant Bail Under Section 439 of CrPC

State of Uttar Pradesh v Anurudh 

9 January 2026

Citation: 2026 INSC 47 | 2026 SCO.LR 1(2)[10]

Bench: Justices Sanjay Karol and N.K. Singh

The Supreme Court held that the High Court’s power to grant bail under Section 439 of the Code of Criminal Procedure, 1973 is narrow in scope, restricted to only prima facie evidence. The Court cannot undertake a mini trial at this stage.

The respondent was accused of kidnapping and sexual assault under Section 363 of the Indian Penal Code, 1860 and Section 7 of the Protection of Children from Sexual Offences Act, 2012 respectively. The Allahabad High Court granted him interim bail exercising its powers under Section 439, CrPC. It held that there was an inconsistency in the age of the victim and that Section 164-A, CrPC and Section 27, POCSO obligate police to obtain the victim’s medical age report at the start of investigation. On appeal, the Supreme Court heard arguments on whether the scope of Section 439 CrPC was wide enough to issue directions mandating age determination tests under the POCSO Act. 

The Supreme Court set aside the Judgement of the High Court without revoking the bail granted to the respondent. It held that High Courts can only take a prima facie view on the age of the victim if the question was raised at the bail stage. Determining the age of the victim is a matter of trial. It held that the determination of age cannot be resorted to as a matter of course.

Keywords/phrases: Section 439 of the Code of Criminal Procedure, 1973—Special powers of High Court regarding bail—Protection of Children from Sexual Offences Act, 2012—Determination of age of victim—not valid at bail stage—valid during trial stage—High Court cannot determine age of victim at bail stage under POCSO Case

Read the Judgement here.

MIND MAP