Retro tax must be resolved via Indian law, not arbitral award: Somanathan

Somanathan says that the government doesn't support retrospective taxation since it creates sudden and fresh liability and is not in line with the stability and predictability of taxation

It makes eminent sense for Cairn and Vodafone to withdraw international arbitration cases now, given the retrospective taxation matter has been resolved through Indian sovereign action, says Finance Secretary T V Somanathan. In conversation with Dilasha Seth, he says the government has been able to achieve a fine balance between not conceding foreign parties the right to pronounce on Indian tax laws and not wanting to have retrospective taxation. Edited excerpts:
 
The withdrawal of the retrospective amendment to taxation introduced in 2012 has put to rest a lot of uncertainty. What was the trigger for the government?
 
This