Former Indian law official seeks SC order against Vodafone

A former additional solicitor-general of India, Bishwajit Bhattacharyya, on Thursday petitioned the Supreme Court to direct the union government to recover alleged tax dues from Vodafone Plc, which according to Indian tax authorities amount to around Rs20,000 crore.

The public interest litigation also seeks a court directive to restrain the government from going ahead with arbitration proceedings in the tax dispute.

Bhattacharyya was a law officer during the Congress-led United Progressive Alliance government. A vacation bench headed by Justice Vikramajit Sen has posted the case for hearing on 1 July.

Bhattacharyya said in his petition that the centre is not implementing the amendment that was introduced in 2012 to claim taxes, and sought direction to the government to administer the Income Tax Act ''impartially, even-handedly, and without fear or favour.''

The tax dispute stems from Vodafone's acquisition of Indian mobile assets from Hong Kong based Hutchison Whampoa in 2007 through buying a stake in Hutchison Essar.

In 2012, after the Supreme Court ruled that Vodafone was not liable for payment of any tax in India on the acquisition, the government changed the tax laws with retrospective effect to enable it to tax deals that had already been concluded.

''It amounts to arbitrariness of state action not to enforce law (Section 9 of IT Act) for 27 months after its enactment. This violates Article 14 of the Constitution,'' the petition said, adding, ''Allowing arbitration proceedings under India-Netherland BIPA (Bilateral Investment Protection Agreement) would flagrantly violate rule of law.''

Bhattacharyya submitted that the IT Act does not recognise conciliation as a dispute settlement mechanism and the tax dispute does not come within the ambit of BIPA.

The government has recently appointed former Chief Justice of India R C Lahoti as arbitrator in the tax dispute case.