There are two main issues being tested in this sentence.
(1) When using like or unlike, you must compare like parts (e.g., compare arguments with arguments). The original sentence improperly compares the team of lawyers with the government's argument.
(2) The expression, which modifies the term that is immediately before it. For example, the phrase the argument from the petitioner, which rested on a questionable interpretation of a bill that only recently passed Congress is incorrect since it was not the petitioner that rested on a questionable interpretation, but rather the argument that rested on a questionable interpretation.
A. the sentence illogically and improperly compares unlike parts (i.e., it compares the team of lawyers with the government's argument)
B. the phrase the argument from the petitioner, which rested on a questionable interpretation of a bill that only recently passed Congress is incorrect since it was not the petitioner that rested on a questionable interpretation, but rather the argument that rested on a questionable interpretation
C. the sentence properly compares like parts (i.e., it compares the petitioner's argument with the government's argument); , which rested on... properly and logically modifies the phrase it follows
D. the phrase whose case rested on is illogical since whose (which should modify a person) is actually modifying an argument
E. the original sentence, which reads a bill that only recently passed Congress, is perniciously changed to a new sentence, which reads a bill that recently only passed Congress; the difference in meaning between a bill that recently only passed Congress (meaning it did not become law) and a bill that only recently passed Congress (meaning it passed Congress a short time ago) is significant