Apropos Karma and Tax... (Apr 16) on the government’s plan on retrospective tax laws, it’s an established principle in law that an M&A must not solely be a tax-avoidance manoeuvre. In fact, the Bombay High Court had upheld the principle in the Vodafone case too, before the SC unexpectedly overturned it. Having said this, the retrospective amendment in the Finance Bill has been ham-handedly drafted. Though it looks to have targeted Vodafone and a few other recent cases, making the law applicable since 1962 is impractical and gives a handle to the propaganda about an uncertain tax regime. The Outlook article is part of the propaganda—it’s half the story, omitting to mention the HC verdict and well-known precedents.

 It is well-eshtablised in principle & law that a merger & aquisition transaction must not be a solely tax aviodance manouvre. In the Vodafone case too Bombay High Court upheld the principle. In the cacphony of retropesctive tax & injustice of it all, the fact that by transfer of a sigle share in a tax haven , $ 14 billion dollar worth  of assets changed hand inside this country has been dissembled.

As a matter of fact the Supreme Court unexpectedly overturned the Bombay High  Court verdict  purely on technical reasons & ground that this will harm FDI which is not the court's domain. The Bombay High Court  followed exhisting precedents & law to uphold local authority's tax claim.

Having said that, it must be pointed out the retrospective amendment in Finance Bill has been hamhandedly drafted nor it was required had the government been alert in advance to plug the tax-avoidance loopholes which are many. Though the amendments looks to have been targetted specifically the Vodafone & a few recent such cases , making it retropesctive since 1962 has given an handle to the propaganda about uncertainty in tax regime. It is simply not possible & practicable to open such cases since 1962. 

The hue & cry about uncertainty & arbritaryness also is not justfied because before the apex court surprisingly overturned Bombay High court judgement , the eshtablished law in the country itself is that schemes solely deviced to avoid tax are bad in law & principle.

This article is also part of the propaganda which tells half the story in as much as it does not mention the Bombay High Court verdict & eshtablished precedents including well known Supreme Court Judgements.

 It is well-eshtablised in principle & law that a merger & aquisition transaction must not be a solely tax aviodance manouvre. In the Vodafone case too Bombay High Court upheld the principle. In the cacphony of retropesctive tax & injustice of it all, the fact that by transfer of a sigle share in a tax haven , $ 14 billion dollar worth  of assets changed hand inside this country has been dissembled.

As a matter of fact the Supreme Court unexpectedly overturned the Bombay High  Court verdict  purely on technical reasons & ground that this will harm FDI which is not the court's domain. The Bombay High Court  followed exhisting precedents & law to uphold local authority's tax claim.

Having said that, it must be pointed out the retrospective amendment in Finance Bill has been hamhandedly drafted nor it was required had the government been alert in advance to plug the tax-avoidance loopholes which are many. Though the amendments looks to have been targetted specifically the Vodafone & a few recent such cases , making it retropesctive since 1962 has given an handle to the propaganda about uncertainty in tax regime. It is simply not possible & practicable to open such cases since 1962. 

The hue & cry about uncertainty & arbritaryness also is not justfied because before the apex court surprisingly overturned Bombay High court judgement , the eshtablished law in the country itself is that schemes solely deviced to avoid tax are bad in law & principle.

This article is also part of the propaganda which tells half the story in as much as it does not mention the Bombay High Court verdict & eshtablished precedents including well known Supreme Court Judgements.