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Vodafone tax row: Arvind Kejriwal targets Kapil Sibal

Last Updated: Wednesday, May 15, 2013 - 14:26

Zee Media Bureau

New Delhi: Aam Aadmi Party (AAP) leader Arvind Kejriwal on Wednesday targeted newly-appointed Law Minister Kapil Sibal over the reversal of his predecessor’s decision on the Vodafone tax liability issue.

Notably, the government has initiated moves for a conciliatory out-of-court settlement with British telecom major Vodafone over the Rs 11,000 crore tax dispute with Attorney General GE Vahanvati favouring such a step, marking a change in stance.

Addressing a press conference, Kejriwal alleged that Vodafone is expecting out-of-court settlement from Sibal. “We have learnt that Kapil Sibal`s son is Hutchinson`s lawyer,” Kejriwal said in a defiant tone.

“The question arises whether a portion of Rs 2,000 crore has gone to Sibal,” Kejriwal asked.

Accompanied by senior lawyer Prashant Bhushan, Kejriwal said that all the corrupt ministers have joined the Group of Ministers on CBI autonomy.

While addressing media, Bhushan noted that Hutchinson was bought by Vodafone in 2007 and most of it was done on capital gains.

Notably, soon after taking over, Sibal sought fresh opinion of the AG who gave a nod for conciliation of the tax dispute as was proposed by Vodafone.

Vahanvati is understood to have changed his opinion in the light of Finance Ministry clarification that the conciliation proposal would not bypass or alter the tax liability under the Income Tax Act, they said.

Vodafone is facing the tax liability of over Rs 11,217 crore for purchase of Hong Kong-based Hutchison Whampoa`s stake in Indian telecom business Hutchison Essar in 2007.

The tax liability arose due to amending of the Income Tax Act, 1961 with retrospective effect during the tenure of the then Finance Minister Pranab Mukherjee to undo the Supreme Court judgement that was ruled in favour of Vodafone.

The Vodafone dispute was seen as having a discouraging impact on foreign investors` sentiments.

While taking over as Law Minister on Monday, Sibal had told reporters that he would work to ensure that "legal processes and procedures should not be an impediment to economic growth, but must fuel it."

(With PTI inputs)

First Published: Wednesday, May 15, 2013 - 14:25
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