6.9.3. Controversies

6.9.3.1. Vodafone case

In 2012, the Government of India made budgetary proposal to amend the Income Tax Act with retrospective effect from 1962 to assert the government's right to levy tax on merger and acquisition (M&A) deals involving overseas companies with business assets in India. It was partly to override the Supreme Courts’ ruling favoring Vodafone in a tax dispute. Notably, the government could bring in such an amendment because it was a tax law, not a criminal law. However, the Parthasarathi Shome committee later recommended that either the

restrospective tax amendment be withdrawn or penalty/interest, if covered under taxes, be waived off.