Government on Wednesday justified its decision to neutralise the impact of supreme court decision in the Vodafone case by amending the Income Tax Act with retrospective effect suggesting it was to prevent outflow of Rs 40,000-Rs 50,000 crore from the exchequer.

Winding up a debate on Finance Bill in the rajya sabha, finance minister Pranab Mukherjee said parliament is omnipotent and has right to change any provision of the Constitution.

He said the government had to amend the Income Tax Act following the supreme court judgement to prevent outflow of Rs 40,000-Rs 50,000 crore from the exchequer.

With the passage of the Finance Bill, 2012 by parliament, the British telecom giant Vodafone might have to pay Rs 20,300 crore as tax, interest and penalty on its acquisition of Hutchison stake in Hutchison Essar in 2007. The deal was signed in Cayman Islands.

"Indian parliament is omnipotent...It has the power to amend any Article of the Constitution," Mukherjee said, adding the government's decision should not be seen as disrespect to supreme court.

"It is not to ignore the constitutionally assigned responsibility of the supreme court...As judiciary has the right to interpret law, legislature has the right to enact law. In the process, if there are divergences of opinion it should be treated as confrontation, it is the honest difference of opinion. If we make an attempt of reconciling that honest difference of opinion, it is not wrong," he said.

Mukherjee said he had told UK Chancellor of Exchequer George Osborne "(what) you have done in your country and I have exactly done it". Government today justified its decision to neutralise the impact of supreme court decision in the Vodafone case by amending the Income Tax Act with retrospective effect suggesting it was to prevent outflow of Rs 40,000-Rs 50,000 crore from the exchequer.

Winding up a debate on Finance Bill in the rajya sabha, finance minister Pranab Mukherjee said parliament is omnipotent and has right to change any provision of the Constitution.

He said the government had to amend the Income Tax Act following the supreme court judgement to prevent outflow of Rs 40,000-Rs 50,000 crore from the exchequer.

With the passage of the Finance Bill, 2012 by parliament, the British telecom giant Vodafone might have to pay Rs 20,300 crore as tax, interest and penalty on its acquisition of Hutchison stake in Hutchison Essar in 2007. The deal was signed in Cayman Islands.

"Indian parliament is omnipotent...It has the power to amend any Article of the Constitution," Mukherjee said, adding the government's decision should not be seen as disrespect to supreme court.

"It is not to ignore the constitutionally assigned responsibility of the supreme court...As judiciary has the right to interpret law, legislature has the right to enact law. In the process, if there are divergences of opinion it should be treated as confrontation, it is the honest difference of opinion. If we make an attempt of reconciling that honest difference of opinion, it is not wrong," he said.

Mukherjee said he had told UK Chancellor of Exchequer George Osborne "(what) you have done in your country and I have exactly done it".