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  • Oct 13, 2020
  • Will the government challenge Vodafone tax arbitration verdict? Delhi HC wants answer by November 7

    The Delhi High Court wants the Narendra Modi government to disclose whether or not it intends to challenge the international arbitration award favouring Vodafone in the Rs 40,000-crore retro tax tussle, whose origins can be traced back to 2007.

    In a recent order, which Moneycontrol has reviewed, a division bench of the Delhi High Court said the government’s legal officers should get “categorical instructions” on the issue by November 17, 2020, the next date of hearing.

    “It is deemed apposite that the ASG, for the next date obtains categorical instructions on the aforesaid aspect,” the order said. The ASG is the Assistant Solicitor General, a senior law officer of the government.

    The government’s stance in this high-profile tax spat is crucial considering the controversial move by the Indian Parliament to retrospectively change its tax laws in 2012. The decision nullified Vodafone’s earlier victory at the Supreme Court and was criticised by global investors and MNCs batting for tax certainty.
    Since the Modi regime took over in 2014, there has been no reversal of the retro tax laws, but it has repeatedly assured stakeholders that there will be no repeat of the unpopular step.
    The Centre’s decision may also have ramifications on its approach in other, related international arbitration cases involving British oil energy explorer Cairn Energy Plc and mining major Vedanta Resources Plc, both of which have also been hit by the 2012 retro tax laws.