The Government of India has asked a federal court in Washington to dismiss the British company Cairn Energy’s lawsuit. The lawsuit seeks to enforce an arbitral tribunal order to pay the company $ 1.2 billion. The Government of India has stated that it has sovereign immunity under US law.
Cairn asked the US federal court in May to force an arbitration tribunal to comply with Air India’s $ 1.26 billion order. The judiciary issued an order in December 2020 in Cairn’s favor. On August 13, the government filed a motion to dismiss in the U.S. District Court for the District of Columbia, stating that the dispute between Cairn and the Indian Tax Authority was not within its purview.
The government has repealed the provision: Let us tell you that the Parliament of India passed the Amendment Act earlier this month to repeal the pre-tax levy. Under this law, the government was given the power to tax even in 50-year-old cases. Cases of ownership of companies sitting abroad and capital gains but much of the business of such companies was in India.
The 2012 law was used to impose a total of 1.10 lakh crore tax on 17 companies, including 10,247 crore on Cairn Energy. Officials said the process of making rules to back such tax demands is underway.
The Income Tax Department sold 10 percent of its shares in Cairn to its former Indian unit, which lost a profit of Rs 1,140 crore. The tax refund of Rs 1,590 crore has also been withheld. Cairn challenged the matter before the International Arbitration Tribunal, saying in December last year that the government’s move was wrong and ordered the amount to be fully repaid.
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After the government refused to accept the decision of the arbitration courts, Cairn began preparing to confiscate Indian assets abroad. So that he may recover his sum. In May, Air India was sued by a US court, but last month it received an order from the French court to seize real estate assets of the Indian government.