VODAFONE CASE - SC

Vodafone tax case: Supreme Court declines to stay High Court order

NDTV Correspondent & Agencies, 27 September, 2010

The Supreme Court on Monday refused relief to Vodafone in the Rs. 12,000 crore tax case, in a ruling that will have far-reaching consequences on how the future cross-border transactions are carried out in India.

Declining to stay the Bombay High Court order, the apex court has directed the Income Tax Department to decide within four weeks the liability to be paid by Vodafone.

The Supreme Court said that Vodafone has to deposit a certain amount based on the apportioned sum decided by the income tax department.  Britain's Vodafone on September 13 moved the Supreme Court challenging a Bombay High Court order that upheld the Income Tax Department's demand of Rs. 12,000 crore tax on the company's over $11 billion deal with Hong Kong-based Hutchison in 2007.

The Bombay High Court had earlier dismissed Vodafone International's petition challenging the Indian tax authorities' demand of Rs. 12,000 crore in tax over the Hutchison deal.

The High Court division bench held that Indian income-tax authorities had the jurisdiction to tax the transaction.

The Income Tax department has held Vodafone liable for not deducting tax at source from payment made to Hutchison and claimed around Rs. 12,000 crore in tax and penalty in the 2007 deal.

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