Vodafone has been fighting this legal battle since late 2007, when it first received notice from Income Tax department demanding tax from the British company. In 2012, 4 and half years later, landmark judgement by Supreme court of India has closed matter in favor of Vodafone.
Now lets go back and look at the series of developments in short and simplest manner as to how the things shaped out -
The Transaction
May 2007 - Vodafone Plc announced to takeover 67% of Hutchison Essar from the Indian part of Hong Kong based Hutchison Whampoa for $11.1 Million.
Hutchison, the seller, controlled its Indian subsidiary via group of companies based in Cayman Islands.
The Issue
September 2007 - Indian Income Tax department issues notice to Vodafone requiring them to pay taxes on transaction they had entered into on the claim that the deal involved transfer of Indian asset and Vodafone should have deducted TDS while making payment for the deal.
The Case Moves to Court
October 2007 - Vodafone files writ petition in the Bombay High Court against the notice received by them from IT Department.
December 2008 - Bombay HC rejects the pleas saying IT Department had rights to investigate.
January 2009 - Vodafone files appeal in Supreme Court - Major point in plea was : Do indian authorities have the jurisdiction to tax a transaction that occured between parties that do not have presence in India?
SC asks the IT department to confirm their jurisdiction over the said transaction, to which in May 2010 IT department replies with a Yes !
June 2010 - Vodafone files writ petition in Bombay HC against IT department's reply.
September 2010 - After continued hearings, Bombay HC rules in favour of IT deaprtment.
The Final Stages
Vodafone once again knocks at the doors of SC challenging the quantification of tax amount i.e INR 11,218 crore and also citing that no tax was due on any event.
November 2011 - SC asks Vodafone to submit INR 2500 cr plus gurantee of INR 8,500 cr pending final judgement.
Apex Court Ruling
SC told the IT department, they do not have jurisdiction over an overseas transaction setting aside the judgement of Bombay HC.
Court also asked IT department to return INR 2500 cr along with 4% interest. Also, return INR 8,500 cr bank gurantee to the Telecom Giant.
The Transaction
May 2007 - Vodafone Plc announced to takeover 67% of Hutchison Essar from the Indian part of Hong Kong based Hutchison Whampoa for $11.1 Million.
Hutchison, the seller, controlled its Indian subsidiary via group of companies based in Cayman Islands.
The Issue
September 2007 - Indian Income Tax department issues notice to Vodafone requiring them to pay taxes on transaction they had entered into on the claim that the deal involved transfer of Indian asset and Vodafone should have deducted TDS while making payment for the deal.
The Case Moves to Court
October 2007 - Vodafone files writ petition in the Bombay High Court against the notice received by them from IT Department.
December 2008 - Bombay HC rejects the pleas saying IT Department had rights to investigate.
January 2009 - Vodafone files appeal in Supreme Court - Major point in plea was : Do indian authorities have the jurisdiction to tax a transaction that occured between parties that do not have presence in India?
SC asks the IT department to confirm their jurisdiction over the said transaction, to which in May 2010 IT department replies with a Yes !
June 2010 - Vodafone files writ petition in Bombay HC against IT department's reply.
September 2010 - After continued hearings, Bombay HC rules in favour of IT deaprtment.
The Final Stages
Vodafone once again knocks at the doors of SC challenging the quantification of tax amount i.e INR 11,218 crore and also citing that no tax was due on any event.
November 2011 - SC asks Vodafone to submit INR 2500 cr plus gurantee of INR 8,500 cr pending final judgement.
Apex Court Ruling
SC told the IT department, they do not have jurisdiction over an overseas transaction setting aside the judgement of Bombay HC.
Court also asked IT department to return INR 2500 cr along with 4% interest. Also, return INR 8,500 cr bank gurantee to the Telecom Giant.
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