This refers to the report “Govt prepares Vodafone tax notice, legal reply” (May 10). Despite the vigorous defence put up by the finance minister, introducing retrospective changes in law amounts to bad public policy. Once the highest court in a country pronounces its interpretation on a piece of legislation, the government should honour it and change the law prospectively if it believes it was poorly written. Unfortunately, most political parties are supporting the government because the case involves a multinational company; to do the contrary would have meant being branded anti-national. Even if the government’s current amendments are upheld by the Supreme Court on the grounds of the parliamentary prerogative to legislate, two questions would still need to be addressed. First, if the law was always clear on offshore deals being taxable in India if these involve Indian assets, then why are the retrospective changes not being used to open cases in which assessments have been completed? Second, why should the government waive interest and penalty in the Vodafone case only and not in other cases? Surely, discretion should be exercised logically and consistently to avoid graft and unequal treatment.
P Datta Kolkata
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