Vodafone writ disposed and not dismissed
Whereas we still need to read the order and analyze, I was to first correct the media headline of some who instantly reported the news. There is fundamental difference between dismissal and disposal of writ.
The operative part of the Bombay HC order as was read out firstly seems to have distinguished from it’s earlier division bench judgement which dismissed Vodafone matter, albeit on different facts. In the present case, firstly, the HC felt that Vodafone has made out a case for intervention. It has essentially held that the tax administration erred in jumping to the question of valuation of shares without determining the question of changeability ( to tax ) of such share issuance transaction under chapter X of the income tax law and subjected a capital account receipt to tax.
In other words, the question of valuation seems to have become secondary. Besides, directing the Dispute Resolution Panel (DRP) to determine the preliminary question of charge-ability keeping in mind the statutory hierarchical provision under the Income tax law, the Court has held that Vodafone can approach the HC directly in the event the DRP order is patently incorrect. The argument of government that writ should not be admitted on the ground that there is alternate remedy seems favoring Vodafone, else, it would have directed to DRP order to appeal to the tribunal.
Mukesh Butani is Founder & Managing Partner of BMR Legal Advocates, a boutique law firm specializing in the areas of Corporate International Tax, Transfer Pricing, GST, Customs & Trade, with expertise in litigation services, controversy management, strategic transaction advisory and policy. With specialization in domestic corporate international tax and transfer pricing, he has over three decades of experience in advising multinationals and Indian conglomerates on wide range of matters relating to FDI policy, business re-organizations, cross-border tax structuring, tax controversy and regulatory policy. He is an acknowledged expert in the area of International Tax policy, controversy & advocacy, and has to his credit several landmark judicial pronouncements. He has deposed as Expert Witness on contentious cross-border tax treaty & TP matters in foreign jurisdictions. Mukesh is a qualified Chartered Accountant and holds bachelor's degree in Commerce and Law, and practices as an Advocate before various Tribunals, High Courts and the Supreme Court of India.