Supreme Court rejects Govts Vodafone review petition Apex court finds no error in earlier judgment Govt issues refund cheque to Vodafone Updated
The Supreme Court today rejected the review petition filed by the government in the Vodafone Essar case. In January this year, the Supreme Court had held that there was no tax liability with respect to the Vodafone-Essar transaction. The review petition was based on the premise that the apex court had erred in holding that the Indian tax authorities had no jurisdiction over the transaction.
The Supreme Court today rejected the review petition filed by the government in the Vodafone Essar case. In January this year, the Supreme Court had held that there was no tax liability with respect to the Vodafone-Essar transaction.
The review petition was based on the premise that the apex court had erred in holding that the Indian tax authorities had no jurisdiction over the transaction.
The dismissal of the review petition, an altogether unsurprising move, now means that all eyes will now be on the passing of the Finance Bill 2012, which has proposed certain amendments to the Income Tax Act. These proposed amedments are retrospective in effect and are generally seen as a move to bring the Vodafone transaction within the tax net.
Speaking to Bar & Bench Vodafone Counsel Anuradha Dutt said, “The rejection by the Supreme Court of the review petition by the tax department is reiteration of the judgment of the Supreme Court given on January 20, 2012 and reinforcement of supremacy of 'rule of law' in India”.
Dutt informed Bar & Bench that the tax department has infact late last night issued a refund cheque in the name of Vodafone and has handed over the same to them.
Dutt hopes that the government re thinks about proceeding with the proposed retrospective amendment to Section 9 of the Income Tax Act and does not give a signal to the world that in India the apex court’s verdicts have no meaning and can be overturned at any time.
“If the proposals are made law then of course Vodafone will have to consider its options to challenge first whether the amendment is clarificatory since the Supreme Court in its judgment said there is no ambiguity in section 9. If it is not clarificatory and substantive then can it apply to Vodafone who in 2007 could not have dreamt that a retrospective amendment would be introduced in 2012 making it chargeable for the first time and therefore withhold tax. It must be remembered that tax is not of Vodafone but of Hutch group. Vodafone has already paid full consideration to Hutch and how could it withhold in 2007 when there was no taxing provision.
Vodafone also has an option to make a claim against India under the bilateral investment treaty with Netherland as the Dutch entity purchased the shares of the offshore company. Therefore, if Vodafone succeeds, government will have to provide compensation. So from one hand it will take and the other it will return”, said Dutt.
Dutt observed that it is apparent that no one in government has thought through all the implications including on FDI which is required by the country because of fiscal deficit nor is there any political vision being shown by any leader in the government.
“Issue is not just about Vodafone but a government which has lost its political will to have long term vision on important policy issues and are being dictated only by thinking about survival from day to day”, concluded Dutt.
APPRENTICE LAWYER
Friday, May 24, 2013 - 10:39am
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Tuesday, May 21, 2013 - 12:35pm
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Amit Pandit Advocate
March 21, 2012 - 7:06amThe judgement of the court is right .But in general I feel that foreign companies need to be taxed on indian shores as they do business in india and they have been evading tax since a long time for last 55 years .The parliaments move to ammend the income tax act is really praise worthy .The foreign companies have been exploiting india since a long time and doing big time business and making profits in india and getting away without paying a single penny .Since independance this figure has crossed lakhs of crores of rupees so this loophole has made india loose billions of dollars .The proposed ammendment will bring in billions of dollars and give a level playing fielsd at par with indian companies who are taxed .Since independence and even before independance since days of british east india company india has been exploited enough for last 65 years post independence and 150 years pre-independance where crores of money was simply looted pre-independance and india was pushed into poverty by british empire and east india company .Now post independance if we carry out the same way and make no changes to our laws what is the difference then between british india and todays india ruled by indians ? If we fear multi national companies in a post independent india in the name of globalisation and allow them to loot india and not make any changes to the law then we are surely not truly independant in real sense and we still are subject to opression from multi national companies.The real independance comes only after we indians really learn to live with self respect and our parliament makes changes to the laws as it is going to do now without carrying on the same laws which the british left.If ammendments are not made by indian parliament to british laws or in that case any obsolete law even post independence it would be against the principles of free india for which lakhs of freedom fighters have given their life and blood for without caring for themselves or their families or caring for money or their personal benifit.In todays days when everyone wants money and sells off his honesty for a little money it is worth learning from these selfless freedom fighters like mahatma gandhi or bhagat singh or many others what is selfless service to the nation
Ponga Pundit
March 21, 2012 - 12:04pmThe counsel's argument that Vodafone in 2007 could not have dreamt that a retrospective amendment would be introduced ...does not hold water! You can ask any person doing business in India and he/she/it will tell you that whenever an assessee in India takes a tax position here on any issue he/she/it always has dreams/nightmares that even after winning at apex court, the govt will come up with a retroactive amendment to undo the relief.
Amit Pandit Advocate
March 29, 2012 - 3:15amDear Ponga Pandit ,I dont know the position in mauritius or pakistan or any other country but surely in india Parliament has a right to get in a retrospective ammendment and it has done so not only now but many number of times and it will keep doing it for a long time in the future as parliament in india is supreme as far as law making process is concerned and no one can interfere in law making process of parliament of india .India has achieved freedom from british rule after a long struggle which happened a lot before you and i were born .It is not a failed state like pakistan or afghanistan or a small nation like mauritius .India is the worlds largest democracy with one third population of the world living here which means every 3 persons are indian out of 10 living on this planet .All this means that the Indian Parliament also is equally powerful like the country and has to think about public welfare and democracy .India is not like any other small nation where peanuts population of the world lives equal to the population of city of delhi .So dear ponga when you live in a big country like india you have to think big and do big .its not like mauritius or cayman island which has no significant existance on world map.Thus this ammendment will not be strictly applicable just to multi national companies when it is passed but its a general retrospective ammendment which will apply to all transactions of all companies even of Indian origin and plug the loophole of tax evasion in income tax act .
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