Vodafone liable for tax on Hutch deal: Bombay High Court

08 Sep 2010

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The Bombay high court today rejected a petition filed by Britain's Vodafone against the India's tax department. Vodafone had argued that cross-border mergers fell outside the jurisdiction of the department.

"The petition is dismissed," one of the judges said in the ruling.

It said the tax authority's order cannot be held to lack of jurisdiction.

Justice D Y Chandrachud and justice J P Devadhar of the Bombay High Court dismissed Vodafone International's appeal against a ruling by the department that it had the right to seek tax on the UK company's $11.2-billion acquisition of a majority stake in Hutchison Essar Ltd in 2007.

In its appeal against the claim, Vodafone said it was not under obligation to pay taxes or withhold any amount for tax authorities as the stake sale had taken place on foreign soil.

Vodafone acquired its stake from CPG, registered in the British overseas territory of the Cayman Islands in the Caribbean Sea and is owned by Hutchison Telecommunications International Ltd.

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