Solicitor General disagrees; appealing against Vodafone tax arbitration

Solicitor General Thushar Mehta does not want the Central Government to move an appeal against Vodafone tax arbitration. Following the verdict from International Tribunal, the central government had sought the opinion of Solicitor General Tushar Mehta. The top government lawyer said that the decision of an arbitration tribunal cannot contradict the law passed by a sovereign parliament.

"The question of law - the power of an arbitral tribunal to virtually and substantially declare parliamentary legislation of a competent Parliament of a sovereign nation to be non est and unenforceable - itself is an issue which needs to be challenged. I, therefore, opine that the Union of India must challenge the said award and must file all available proceedings to challenge the award and/or to protect the interest of Union of India," Mehta said in his opinion, the Economic Times reported.

The tax due case was filed after Vodafone purchased Hutch back in 2007. The central government demanded Rs 12,000 crores as tax dues and Rs 7,900 crores as interest from the company. Upon the central government's demand that Vodafone must pay a tax for the purchase, the company received a favourable verdict in the case from the Supreme Court. The government then passed a law in the parliament demanding the taxes and dues be paid. Vodafone Company later approached the International Arbitration Court with the case.

The Company received a favourable verdict from the court in Hague in a case against Indian tax authorities which demanded the network company to pay Rs 20,000 crores as tax. The tribunal in its ruling said that the government must not only stop demanding the tax and dues from Vodafone but also pay an amount of 40 crores as compensation to the company for its legal expenses.