SC wants 1% for handling Vodafone’s Rs 2,500 crore

New Delhi: Justice may no longer come cheap in the Supreme Court, at least for rich corporates who for long have paid the same fee as applicable to the common man and sought adjudication on high-stakes matters running into hundreds of crores.
Vodafone realised this when the apex court asked it to deposit Rs 2,500 crore before the court heard its appeal against a Bombay High Court order validating nearly $2 billion capital gains tax on the $11 billion acquisition of Hutch. The SC said the government could withdraw this money but if Vodafone won its appeal, it would have to return the money plus interest.


But when the government went to withdraw the money, it was asked to pay a commission of 1%, or, Rs 25 crore. The demand sent the Directorate General of International Taxation (DGIT) into a tizzy, wondering how to account for this “commission” in its balance sheet.
While it figures the way out, one thing is certain: the cash-starved judiciary has found a novel way for augmenting its funds instead of depending on the meagre handouts handed out by the government.
For, by asking for 1% commission in similar corporate cases, it could not only manage funds for its yearly budget of less than Rs 90 crore, but also generate extra funds for expansion of infrastructure.
Right now, the court fee and costs collected by the Supreme Court from handling the litigations goes into the consolidated fund of the government of India, which allocates funds for apex court’s yearly budget.
But the multi-crore question is — will this Rs 25 crore now go to the consolidated fund or will the SC get to keep it to spend the money on infrastructure and other pressing requirements. On November 15, an SC Bench comprising Chief Justice S H Kapadia and Justices K S Radhakrishnan and Swatanter Kumar had agreed to hear Vodafone’s appeal with a direction to the the British telecom giant to deposit Rs 2,500 crore within three weeks. It had also asked Vodafone to secure the rest of the demand, that is Rs 8,500 crore, by providing bank guarantee of a nationalised bank within eight weeks.
The DGIT has now come to SC with an application saying the rare invocation of Entry 26 of Part III of Third Schedule of the Supreme Court Rules, 1966, to demand 1% commission on the deposited amount could mean the government will be allowed to withdraw an amount of Rs 2,475 crore but in the event Vodafone wins in SC, the government will have to return Rs 2,500 crore with interest.
Seeking waiver of the commission, the application moved through additional solicitor general Mohan Parasaran also presented an alternative — let Vodafone deposit an addition Rs 25 crore towards the commission. The application is likely to be listed for hearing before a Bench headed by Chief Justice Kapadia on Thursday.