The government is unlikely to file a curative petition with the Supreme Court after the latter quashed the government’s review petition filed in February.
Following this, the Income-Tax Department today refunded
the Rs 2,500 crore deposited by Vodafone International Plc, along with 4 per cent interest as directed by the court on January 20.
However, finance ministry officials said that the Income-Tax Department may raise a fresh tax demand on Vodafone after the passage of the Finance Bill, 2012 in May. The finance ministry has proposed an amendment in the Income Tax Act, under which such overseas mergers and acquisition can be taxed retrospectively from 1962. The Bill has a specific clause 113 that states it will operate “notwithstanding anything contained in any judgement, decree or order of any court or tribunal or any authority.
“No curative petition to my knowledge ... I suppose government will have to refund Vodafone money,” Law Minister Salman Khurshid told reporters after a meeting of top ministers called by Finance Minister Pranab Mukherjee this evening.
The meeting was attended by Union Home Minister P Chidambaram, Telecom Minister Kapil Sibal and Attorney
General G E Vahanvati, among others.
The curative petition is the last judicial remedy available with the government. In its judgement on January 20, the Supreme Court had set aside the Bombay High Court ruling and asked the Income-Tax Department to return Rs 2,500 crore deposited by Vodafone International Holdings within two months along with 4 per cent interest.
The Supreme Court had, in its January order, held that the tax department does not have jurisdiction to levy Rs 11,000 crore as tax on the $12 billion overseas deal between Vodafone International Holdings and Hutchison Group. Following the judgement, the government had filed the review petition, which was dismissed today.
“I said review has been dismissed, law remains what is being stated by Supreme Court,” Khurshid said.
“You can only tax on the basis of existing law. We have no right to tax them. Current law will prevail so long law is not changed,” he said.
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