judgments. Verma said the judgment bypassed the court’s 1985 judgment. About his other reasons for not being convinced with the Vodafone judgment, Verma had said: “The moral foundation is as much available to tax laws as it is to welfare legislation. It is therefore necessary that while interpreting taxation laws, you have to bear that fact in mind. Also, see the implication: While the law permits legitimate avoidance of tax by tax planning, illegitimate tax avoidance by adopting a subterfuge is not permissible. This should be shunned by the courts. This is something that has been settled by most cases. McDowell settled this and is the law of the land.”
Subsequent to the January judgment of the SC, the government had introduced retrospective changes in tax laws in Budget 2012-13, seeking to overcome the ruling. With foreign investors expressing concerns, it subsequently set up a panel to review the change in law asserting Indian jurisdiction to tax cross-border deals involving Indian assets.
On January 20, the SC had ruled that Vodafone – which bought Hutchison Telecommunications’s 67% stake in Indian telecom firm Hutch-Essar for $11.2 billion in an entirely offshore deal in May 2007 – could not be taxed since the law did not explicitly provide for taxing offshore transactions.