Kapil Sibal, Amit Sibal, P Chidambaram and Vahanvati's role in Vodafone deal.Documents released by Prashant Bhushan and Arvind Kejriwal.
Vodafone-Hutchison 2007 deal
Father & son batting for Vodafone in matters of tax evasion and benami shares
In a blatant misuse of power, and in direct conflict of interest, Kapil Sibal, on the very first day of tking over the additional charge of the Law Ministry, overturned his predecessor Ashwani Kumar's decision on the Vodafone's tax liability of Rs. 11,217 crore.
Kumar had rejected Finance Minister P. Chidambaram's proposal for conciliation with Vodafone, saying it was illegal. The Attorney General Vahanvati too had advised against a compromise and had said Vodafone must pay its dues.
Read on...
http://www.scribd.com/doc/141621998/Vodafone-Hutchison-2007-deal
DAY 1: SIBAL SCRAPS ASHWANI’S ORDER
Wednesday, 15 May 2013 | PNS | New Delhi
In less than 24 hours of taking over the additional charge of Law Ministry, lawyer-turned-politician Kapil Sibal has reversed the decision of his predecessor Ashwani Kumar and initiated a move for a conciliatory out-of-court settlement with British telecom major Vodafone in a Rs11,000 crore tax dispute.
Attorney General GE Vahanvati prepared the way for reversal of Ashwani Kumar’s decision.
Interestingly, when Ashwani Kumar rejected the Finance Ministry’s proposal for conciliation with Vodafone, Vahanvati had advised against a compromise (with Vodafone).
Kumar had opposed conciliation, as proposed by Vodafone, saying the Executive cannot overturn an Act of Parliament. The AG had then concurred with Kumar's view.
It is learnt that soon after taking over as Law Minister, Sibal sought the fresh opinion of the AG, who gave a nod for conciliation of the tax dispute as was proposed by Vodafone.
Vahanvati has reportedly defended his new position claiming it was based on Finance Minister P Chidambaram’s clarification at meeting with the Revenue Secretary and the Chairperson of the Central Board of Direct Taxes (CBDT) that the conciliation proposal would not bypass or alter the tax liability under the Income Tax Act.
In his opinion, the AG quoted Chidambaram as claiming that permission of the Cabinet was being sought for a non-binding conciliation only to discuss issues with Vodafone and has assured that no contract would be signed outside the provisions of the law. The out-of-court conciliation with Vodafone will now come up before the Cabinet to take the final call.
Vodafone is facing a tax liability of over Rs11,217 crore for purchase of Hong Kong-based Hutchison Whampoa's stake in Indian telecom business Hutchison Essar in 2007.
The tax liability arose after then Finance Minister Pranab Mukherjee amended the Income Tax Act of 1961 to undo the relief that Vodafone had got from the Supreme Court in the tax case. The amendment in the Act provided for taxation of Vodafone with retrospective effect. Accordingly, a demand notice was served to Vodafone asking the British Telecom giant to pay about Rs 11,217 crore.
Taxation of Vodafone with retrospective effect did not find favour with Chidambaram, who is of the opinion that such a provision would act as a deterrent to foreign investments and hit the growth process.
http://www.dailypioneer.com/todays-newspaper/day-1-sibal-scraps-ashwanis-order.html
Arvind Kejriwal targets Kapil Sibal on his decision over Vodafone tax liability issue
PTI / Wednesday, May 15, 2013 16:35 IST
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."
http://www.dnaindia.com/india/1835064/report-arvind-kejriwal-targets-kapil-sibal-on-his-decision-over-vodafone-tax-liability-issue
Tax evasion: Why did Sibal extend undue favours to Voda, asks AAP
by Danish Raza May 15, 2013
Aam Aadmi Party (AAP) has alleged conflict of interest in newly appointed Law Minister Kapil Sibal's decision to allow an out-of-court settlement of Vodafone tax evasion issue. Kabil Sibal extended undue favours to the telecom company because the Law Minister's son Amit Sibal represented it in court alleged Arvind Kejriwal.
"Sibal's go ahead for conciliation is significant especially in view of the fact that the main company in this case - Hutchinson Telecommunications International Ltd - is his son Amit Sibal's client," said AAP founder Kejriwal.
Arvind Kejriwal holds a press conference in New Delhi on Wednesday. Ibnlive "This is amazing. One Law Minister resigns over corruption charges. The other person takes over and within a day, starts working in favour of the private firm," he added.
AAP members produced before the media an agreement between Hutchinson and Essar, under which the former paid Rs 2,000 crore to Essar to all court matters all withdrawn. "Was part of this Rs 2,000 crore given to Kapil Sibal?" asked AAP member Prashant Bhushan, demanding to know what is unique about the company because of which the Law Minister went out of his way to help it.
Sibal, who got the additional charge of the law ministry after Ashwin Kumar's resignation, gave the go-ahead for an out-of-court settlement of the Vodafone issue. He overturned the decision of his predecessor, Kumar, who had rejected the Finance Ministry's proposal for conciliation terming it ‘illegal'. Attorney General GE Vahanvati had also advised against conciliation with the British telecom giant.
But after Sibal cleared the deck for conciliation and sought Vahanvati's opinion on the same, the latter favoured it.
Vahanvati said his fresh opinion was based on the clarification given by Finance Minister P Chidambaram during his meeting with the Revenue Secretary and the Chairperson of the Central Board of Direct Taxes (CBDT). In the meeting, Chidambaram said that the conciliation proposal would not bypass or alter the tax liability under the Income Tax Act. "Chidambaram further clarified, according to Vahanvati, that the permission of the Cabinet was being sought for a non-binding conciliation only to discuss issues with Vodafone and has assured that no contract would be signed outside the provisions of the law,” NDTV reported on Tuesday.
After the Cabinet approval, the proposal will go through Parliament ratification.
"You have to understand that this is a demand raised by a budgetary provision and cannot be overridden by an executive order," Economic Times quoted Sibal saying on Tuesday. "Anything that is decided will ultimately have to go to Parliament. Any out-of-court settlement/conciliation through any non-formal process would have to be first brought before the Cabinet,” Sibal added.
British telecom major Vodafone faces over Rs 11,000 crore tax liability in India for purchase of Hong Kong-based Hutchison Whampoa's stake in Indian telecom business Hutchison Essar in 2007.
http://www.firstpost.com/politics/tax-evasion-why-did-sibal-extend-undue-favours-to-voda-asks-aap-784761.html?utm_source=quote&utm_medium=hp