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Jaitley recuses himself from Vodafone case

Finance Minister Arun Jaitley on Wednesday recused self from the Vodafone tax dispute as he had advised the British telecom company as a lawyer.

To recuse is to remove self from participation to avoid a conflict of interest.

“I stopped practising as a lawyer from June 2, 2009. Before that, I had been consulted in the matter by the company on taxation issues. So, I considered it appropriate not to deal with the matter as a minister,” he wrote on his Facebook page.

He said the case would be dealt by Revenue Secretary Shaktikanta Das and his ministerial junior Nirmala Sitharaman.

The dispute involving tax dues of over Rs 20,000 crore from Vodafone has been pending since 2007 when it had acquired Hutchison Whampoa’s stake in Hutchison Essar.

Vodafone had served an international arbitration notice to India on April 17. India has appointed former Supreme Court judge R C Lahoti as its arbitrator. This appointment was approved by Sitharaman. India is insisting that tax issues are not covered in the India-Netherlands Bilateral Investment Promotion Agreement, under which the notice was served.

Representatives from Vodafone had told the ministry recently the company wanted to settle the dispute amicably.

The ministry is said to be considering a few options to address concerns of the sector with regard to retrospective taxation. The options include removing interest and penalty on such cases or dropping the retrospective change.

The Supreme Court had ruled in Vodafone’s favour in 2012, saying the company was not liable to pay any tax over the acquisition of assets in India from Hong Kong-based Hutchison.

The government changed the tax laws with retrospective effect to undo the judgment.

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