The Bombay High Court has dismissed Vodafone’s petition against the show-cause notice of the Income Tax Department seeking $1.7 billion as capital gains tax. The issue dates back to September 19, 2007, when the Income Tax Department had sent the show-cause notice to Vodafone, asking the company why it should not be taxed on the $11.2 billion transaction between Vodafone International and Hong Kong’s Hutchison International. On January 28, 2008, Vodafone filed the petition in the high court, challenging the department’s notice. Vodafone International, the company’s Netherlands-based subsidiary that bought Hutchison’s 67 per cent stake in Hutchison-Essar, may now move the Supreme Court against the dismissal.
