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Permanent Court of Arbitration three-member tribunal at The Hague cited statements by Prime Minister Narendra Modi and other BJP ministers, saying they pledged not to use ‘retrospective taxation’ to overturn Rs 10,247 crore tax demand from Cairn Energy Plc.
Permanent Court of Arbitration three-member tribunal said Cairn Energy’s India business reorganisation in 2006 before its listing on the stock exchanges was not “unlawful tax avoidance”.
Permanent Court of Arbitration 582-page order, directed Indian Income Tax Department to return the value of Cairn shares sold, seized dividend, and withheld tax refunds in 2012.
Ordering the Indian tax authorities to drop the tax demand, The Hague tribunal, which also included a member appointed by the Indian government, said before the 2014 General Elections, the BJP in its poll manifesto “criticised the preceding government for having unleashed ‘tax terrorism’ and ‘uncertainty’, which ‘negatively impact {ed} the investment climate.”
Permanent Court of Arbitration quoted PM Modi and said, “will not resort to retrospective taxation; we are making our tax regime transparent, stable and predictable”.
Permanent Court of Arbitration three-member tribunal citing Arun Jaitley statements said: “Henceforth, all fresh cases arising out of the retrospective amendments of 2012 in respect of indirect transfers and coming to the notice of the Assessing Officers will be scrutinized by a High-Level Committee to be constituted by the CBDT before any action is initiated in such cases.”