The Government is unlikely to appeal against the Bombay High Court decision on the Vodafone and Shell tax disputes. A senior Finance Ministry official said that an internal committee of the Central Board of Direct Taxes (CBDT) is also not in favour of filing appeals.

“We will take a final call after formally getting an opinion from Attorney General Mukul Rohatgi in the Vodafone matter,” a top Finance Ministry official said here on Thursday.

The Attorney General has suggested that the Income-Tax Department should desist from filing an appeal against the Bombay High Court ruling, which said that Vodafone is not liable to pay an income tax demand of ₹3,200 crore in a transfer pricing case.

In another case, the Bombay High court had rejected tax officials’ claim that Shell mischaracterised a 2009 share transfer from its Indian unit to the parent to avoid taxes of more than $2.5 billion that should be considered income.

Shell said it valued the deal correctly.

“I have asked the Income-Tax Department to accept the judgment of the High Court. I have said: in my opinion, don’t file an appeal,” Rohatgi had said.

“The Government is trying to improve the environment of doing business and long litigation is a deterrent,” the official said.

The legal fraternity felt that since the apex court has already given its verdict in a similar case against the Government, an appeal would not stand.

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