Dutt Menon Dunmorrsett, partner at Anuradha Dutt and Vodafone counsel says that conciliation is formal manner of resolving issues and is not adversarial.
Anuradha Dutt adds that Vodafone has not started to think of the end-result and that it is too premature to discuss the steps that Vodafone will take
A resolution will involve some give-and-take, and both the parties have to agree to terms, Dutt told CNBC-TV18.
Below is the edited transcript of the interview on CNBC-TV18
Q: Vodafone sent a letter of conciliation to the finance ministry. Has the informal process of negotiation that you were involved in failed? What does the conciliatory process mean?
A: Nothing has failed. It was similar to the discussion between two people to arrive at an amicable resolution. Therefore conciliation is a method and is not an adversarial proceeding. In fact it is an informal manner of amicable resolution. So, Vodafone decided to try conciliation to arrive at an amicable resolution.
Q: Is the waiver of interest and penalty an acceptable solution for Vodafone? What is Vodafone's expectation from the conciliatory process?
A: I don’t think Vodafone has really started to think about what would be the end-result of this amicable resolution. It is initiating the process on the premise of willing to consider a resolution and if the government agrees to this, there will be some give-and-take which is legally permissible. Whatever solution is arrived at Vodafone must find it legally enforceable. It is a little premature to discuss what Vodafone is willing to accept and what the government is willing to do at this moment.
Q: Can interest and penalty waiver, if that is part of the settlement, be effected via a circular or is an amendment in the IT Act necessary?
A: To my mind, a circular can be brought to offer relief to a situation which the Shome Committee has termed hard and unfair. What I have gathered in my interaction is that the tax office probably thinks that an amendment is necessary and a circular may not be the best procedure.
Q: Is May the earliest that an amendment is likely to be moved?
A: It needs to be seen if both parties agree to the terms and conditions. If it is not possible to reach an agreement, then the government will do what it as and Vodafone will do what it has to. If the government decides on prospective amendment or waiving the interest penalty, it will have to wait till May with the Budget around the corner. So, it may be in May.