Kapil Sibal is favouring Vodafone: Arvind Kejriwal

Aam Admi Party leader Arvind Kejriwal on Wednesday said law minister Kapil Sibal was misusing his power by seeking to settle Vodafone’s tax liability of Rs11,217 crore, and questioned if the minister had benefited from his son being the counsel for the telecommunication company. 

A day after taking additional charge of the law ministry, Sibal had, on Tuesday, overturned his predecessor Ashwani Kumar’s decision on Vodafone’s tax dues, saying an amicable settlement could be sought through conciliation. Vodafone had been embroiled in a legal battle over whether the company was liable to pay tax in India after the UK-based company bought the Indian operations (Hutchison Essar) of Hong Kong’s Hutchison Telecommunications International.

The Supreme Court had ruled in January othat it need not pay tax because the transaction took place between two overseas firms, and there was no provision in Indian law to tax such deals. However, the government brought retrospective amendments in the Income Tax Act to tax Vodafone, and other such deals. Sibal’s predecessor, Kumar, had rejected the finance ministry’s plea for conciliation with Vodafone, terming it illegal. Even attorney general GE Vahanvati had then opined against a compromise and said that Vodafone must pay its dues.

“In a blatant misuse of power, and in direct conflict of interest, Sibal on the very first day of taking over the additional charge of the law ministry, overturned his predecessor Ashwani Kumar’s decision on Vodafone’s tax liability of Rs 11,217 crore,” said Kejriwal. “What is the motive behind such a decision? Is such a conciliation move legal?”

Sibal’s move is in concurrence with Vahanvati’s fresh opinion that such conciliation is legally tenable. Sibal had agreed with finance minister P Chidambaram that if mutual negotiation can resolve the tax issue, then the government of India and Vodafone should discuss the matter, and if necessary take it to the Cabinet, and later get the parliament to endorse the proposal.

“This is amazing. One Law Minister resigns over corruption charges. The other person takes over and within a day, starts working in favour of a private firm,” Kejriwal added.

AAP members produced an agreement between Hutchinson and Essar, under which the former paid Rs 2,000 crore to Essar to withdraw all court matters. “Was a part of this Rs 2,000 crore given to Kapil Sibal?” asked AAP member Prashant Bhushan.

Kejriwal and Bhushan said that such a negotiation would be illegal and suggested that the new law minister was acting in favour of his son’s former client. Quoting from court documents, Bhushan said, “Sibal’s son, Amit Sibal, had appeared for Hutchison Telecommunications International in various court cases.”

Amit Sibal told dna that he had not appeared for Vodafone or Hutch in the last three years because “we never wanted a conflict of interest”. He said, “The last time I appeared for a telecom company was on April 22, 2010, much before my father became the telecom minister. I have consciously avoided taking such cases. The last time I appeared for Vodafone was over three years ago when the issue of taxation did not exist.”