Vodafone threatens legal action against Govt

Vodafone has threatened to take legal action against the Indian government, saying it has been denied justice. Vodafone's External Affairs Director Matthew Kirk said, "There is only one example in any other jurisdiction in the world of a Supreme Court judgement being overturned by retrospective tax legislation. That was in Moldova, and the law in that case was subsequently over turned by a Human rights court on grounds that the right to fair trial. So we will use any avenue available to us to look after our shareholders interests."

When asked whether India is a tax haven, Kirk said, "We completely agree that India is not a no-tax economy. We have paid over the last five years over Rs 29,000 crore in taxes and fees to the Indian exchequer. Secondly, if you want to tax a transaction, make sure your law makes that transaction taxable at the time at which it happens."

"The Supreme Court judgement is very clear that the Vodafone-Hutchinson transaction was not taxable at the time it happened. And thirdly, if you believe that retrospective legislation is a good idea, and I'd agree with the other panelist who said it isn't, and you're then going to tax the transaction, then tax the people who made the gain, not the people who're investing in India, creating jobs, connecting rural India and so forth," he added.

But the government is in no mood to cut Vodafone any slack. Finance Secretary RS Gujral has told Network 18 that the earlier tax order to the company has been validated by the Finance Bill.

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