Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: due date for vat payment :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: Central Excise rule to resale the machines to a new company :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: list of goods taxed at 4% :: articles on VAT and GST in India :: form 3cd
Sales Tax »
 Amendment to Additional Sales Tax Act unconstitutional: High Court
 Maharashtra will soon achieve Rs one lakh cr sales tax : CM Devendra Fadnavis
 CBEC chief bats for minimal exemptions for India Inc under GST
 Issuance of Free Sale & Commerce Certificate to Merchant Exporters
 Why model GST law does not give confidence to exporting community
 State governments tighten their grip on sales tax holidays
 Income tax dept charts plan to broaden national taxpayer base
 Sale of shares on which STT is payable is exempt from tax
  Sale of Government of India Treasury Bills by Auction
 New tax treatment of sale of unlisted shares brings more certainty, less litigation
 Simpler tax laws, low rate can help get more people to pay up

I-T Act does not provide for arbitration on tax matters
February, 29th 2016

Notices can be issued by tax authorities for various reasons. One such reason can be to effect recovery. This is what Vodafone is facing lately, even when the matter is before arbitration. The moot question, hence, would be - can the department issue a recovery notice, when the dispute is pending before an arbitration panel? The legal answer to this would be a certain 'yes'.

Once a tax has been determined by revenue authorities as 'payable', it can be recovered, even coercively. The pendency of the case, even before the high court or Supreme Court, does not prevent the recovery of tax. The only remedy is to get the recovery 'stayed' by a court.

It is noteworthy that the Income-tax Act does not provide for any arbitration on tax matters. International arbitrations are generally invoked to protect investments running in astronomical figures - as is the case with Vodafone, which has resorted to the India-Netherlands Bilateral Investment Treaty. This arbitration certainly does not put a legal bar on recovery.

Thus, given that the tax notice is legally correct, and the pendency of the matter for arbitration does not prohibit recovery, here is the larger question. As a matter of propriety, whether the government should have hastened such recovery? The answer would be a definite 'no'. The Income-tax Act does not lay down any timeline for recovery. It is an administrative action and due to various reasons the recovery might be delayed. In other words, it would not be illegal to delay tax recovery, and the fact that the case is pending for arbitration can well be a reason to stall the recovery proceedings.

Besides retrospective amendments, Finance Act 2012 had gone a step further and enacted a validation clause (section 119).

The clause sought to nullify the judgment of the Supreme Court by upholding the previous tax demands raised. The department is well within its rights to enforce the retrospective amendments, applying the validating clause.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Article Management Solutions System Article Management Software S

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions