Feb 18, 2012, 01.16 PM | Source: CNBC-TV18

Vodafone tax verdict: Desperate review by desperate govt?

Gopal Jain - Senior Advocate at the Supreme Court takes CNBC-TV18 through the latest contours of the review petition that has been filed by the government on the Vodafone tax case.

Gopal Jain, Senior Advocate, SC
The Centre’s move to the Supreme Court seeking review of its verdict that the IT department has no jurisdiction to levy Rs 11,000 crore as tax on the deal between Vodafone International Holdings and Hutchison Group.

With the apex court saying the deal was a ‘bonafide’ FDI transaction which fell outside the tax jurisdiction of the Indian authorities, the court asked the IT department to return the Rs 2,500 crore deposited by Vodafone along with 4% interest.

Gopal Jain - Senior Advocate at the Supreme Court takes CNBC-TV18 through the latest contours of the review petition that has been filed by the government on the Vodafone tax case.

Below is an edited transcript of his interview. for more.

Q: The Chief Justice himself has delivered the verdict. What do you make of this review petition being filed at this stage? Is this a last ditch attempt coming in from the governments side?

A: The government instead of looking at the judgment looked through the judgment which is very unfortunate because this was a landmark judgment and this was a crowning glory as the judicial system is concerned in terms of a judgment which would be a good international precedent. At a time like this, the government must always show grace and say if we have lost, we must accept it because there has to be a finality to the judgment of the court.

Therefore, its not only a last ditch attempt, it’s a very misplaced effort because it sends a wrong signal that they will never accept defeat until such time as what they say is proven to be correct.

Q: If you have had chance to go through the grounds on which the review has been sought, what do you make of it? Do you feel it holds enough water? What of the road ahead now?

A: I haven’t studied the review petition in detail but usually a review petition is based on what is called ‘error and prevent.’ That’s the test provided in Article 137 of the Constitution and such a well-reasoned, well-considered judgment after elaborate argument really does not fall within the purview of an error.

To present a test and a review petition normally is heard in chamber, as there is no hearing as in the case of a normal case because at some stage there has to be finality to the decision-making process of the court. Keeping both these things in mind, without looking at the merits of the review petition, I think the chances obviously look to be slim. It’s again one more desperate attempt on the part of the government to try and go back and reopen the issue.

Q: You said that the hearing is not going to be expected, but is there a chance that the Chief Justice could hear the matter in open court? Any sort of timeline we could look at within which the court has to dispose of the matter?

A: There is a yardstick or there is no prescribed timeline. I am not commenting on this case, but the normal process is a review petition which is heard by the judges in chambers if they feel that is some ‘error and prevent.’ Then they could issue a notice and then the court matter comes back into what is called an open-court for a hearing. But that’s the theoretical part of it. It need not happen and seldom happens because ultimately everyone must have a final determination of their case.

for Hitesh Jain, Partner at ALMT Legal’s views on the Vodafone tax review.


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