Finance ministry begins search for 'special counsel' in tax spats

The Narendra Modi led BJP regime is keen on beefing up its defence in multi-billion dollar tax spats against India Inc and MNC's at the country's top court. ET NOW learns that the Finance Ministry has kickstarted the search process for a 'special counsel' who will have the exclusive mandate to represent the government in tax disputes at the Supreme Court. ET NOW was the first to report the development.

"The Central Board of Direct Taxes has already held preliminary discussions with a few senior standing counsels in this regard and may discuss the terms of reference with shortlisted candidates as early as next week. The Finance Ministry is keen to deal with several pending tax cases at the apex court in a more efficient manner ," said an individual familiar with ongoing discussions.

Several leading MNC's like Vodafone, Shell, IBM and Nokia have been embroiled in high-profile tax litigation with the Indian government at various forums like the Supreme Court, high courts and the income tax appellate tribunals. In 2012, the Supreme Court ruled in favour of Vodafone in a hotly contested $2bn capital gains tax dispute.

" Thousands of crores of rupees are locked in litigation and a 'special counsel' involved solely in tax cases will be a significant post from a revenue standpoint," added a former additional solicitor general.

In its election manifesto, the Bharatiya Janata Party had criticized the UPA's tax regime, calling it "tax terrorism" which dented the investment climate of the country.