The Supreme Court on Tuesday declined to entertain a writ petition seeking direction to the Centre to recover around Rs. 20,000 crore tax dues from the U.K. telecom major Vodafone and to restrain the government from going ahead with arbitration proceedings.
A Bench of Justices H.L. Dattu and S.A. Bobde, however, allowed former Additional Solicitor General Bishwajit Bhattacharyya, who was handling tax matters in the UPA government, to withdraw his petition, with liberty to file a fresh one with supporting documents. In his petition, Mr. Bhattacharyya submitted that the Centre was not implementing the rule which was amended in 2012 to claim taxes. 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. Allowing arbitration proceedings under India-Netherland BIPA (Bilateral Investment Protection Agreement) would flagrantly violate rule of law. The IT Act does not recognise conciliation as a dispute settlement mechanism and the tax dispute does not come within the ambit of BIPA.”
He pointed out that Vodafone had neither paid tax nor filed any appeal against the amended provisions. By not enforcing the tax notice amounting to Rs. 20,000 crore, the Centre had flagrantly disregarded the rule of law, he said.
