Arun Jaitley recuses himself from Vodafone case; issues regarding the case would be referred to Nirmala Sitharaman

Finance Minister Arun Jaitley has recused himself from participating in decision-making on the Rs 20,000-crore tax dispute between Vodafone Plc and the government. All issues regarding the case would be referred to Minister of State for Finance Nirmala Sitharaman or Revenue Secretary Shaktikanta Das.

"I stopped practicing as a lawyer with effect from 2ndJune, 2009. Prior to that, I had been consulted in the matter by the company (Vodafone) on various taxation issues. I therefore considered it appropriate not to deal with the matter as a Minister.

Matters concerned with the Vodafone case would be dealt with by the Secretary (Revenue) and the Minister of State (Finance)," Jaitley posted in his Facebook page late on Wednesday night.

In case of any conflict, Jaitley has indicated that the matter should be referred to the PM, official sources said.

The appointment of former Supreme Court judge RC Lahoti as an arbitrator in the tax case was approved by Sitharaman, according to the sources cited earlier.

The appointment of an arbitrator by the government follows a notice from Vodafone on April 17 this year saying it plans to go ahead with international arbitration, preferably in London, to resolve the long pending tax dispute stemming from the government's attempt to tax its 2007 acquisition of Hutchison Whampoa's stake in Hutchison Essar.

The government claims that Vodafone should have withheld tax. Vodafone says that the transactionwas not taxable under the laws as they stood in 2007.

This tax tussle with Vodafone and the retrospective tax amendment in the 2012 budget– aimed at overturning a January 2012 judgement of the SC in Vodafone's favour – has been blamed for spooking global investors.