AAP attacks Sibal on Vodafone tax liability

New Delhi : The Aam Aadmi Party (AAP) Wednesday attacked newly-appointed Law Minister Kapil Sibal for allegedly favouring British telecom giant Vodafone by clearing the decks for resolving its tax dispute out of court.

“Within 24 hours of his (Kapil Sibal) assuming the charge of the law ministry, he reversed the decision of his predecessor (Ashwani Kumar) by allowing an out of court settlement of Vodafone’s tax liability of Rs.11,217 crore,” AAP leader Arvind Kejriwal said.

Kejriwal accused Sibal of having a vested interest in this decision since his son Amit Sibal is the counsel for Hutchinson Telecommunications International, which had sold its Indian telecom business to Vodafone in 2007.

“Why does Kapil Sibal want an out of court settlement with Vodafone? Why did he reverse the decision of Ashwani Kumar, who was against this move,” Kejriwal added.

Kapil Sibal, who took over as the law minister after Ashwani Kumar was removed for alleged impropriety, Tuesday overturned Kumar’s decision on the Vodafone tax liability and gave the go ahead for the matter to be resolved through conciliation.

“Why was there a haste in reversing the decision? Why did he reverse it when Ashwani Kumar and the attorney general were of the opinion that tax must not be evaded,” said Kejriwal.

The tax liability arose from Hutchinson’s sale of their Indian telecom business to Vodafone in 2007, from which a capital gain of over Rs.50,000 crore ensued.

“Under which rule of the Income Tax Act can Vodafone be allowed to evade taxes?” Kejriwal asked.