Predictability in taxation policy is the bedrock of any vibrant,
stable and investment friendly Government. In 2014, when the NDA
Government took charge, it professed "Minimum Government -
Maximum Governance" and "Ease of Doing Business"
alongwith the need for a fair and stable taxation regime.
The policy that this government does
not support any retrospective amendment in tax laws was announced
in 2014 in its first Union Budget itself. The urgency and alacrity
of the announcement perhaps lay in the numerous retrospective
amendments carried out by the previous Government – the most
disastrous being the amendments made to the Income Tax Act in 2012
to nullify the landmark judgement of the Supreme Court in the
Vodafone's case. The Supreme Court had held that
"indirect transfer of shares" involving foreign
jurisdictions cannot be taxed in India. The retrospective
amendments sought to undo this principle of law laid down by the
Court.
