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 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 Income Tax Department sent the show-cause notice to Vodafone on September 19, 2007, questioning the company on 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 notice.

Vodafone International, the company’s Netherlands-based subsidiary that bought Hutchison’s 67 per cent stake in HutchisonEssar, may now move the Supreme Court against the dismissal.