Vodafone, which had earlier challenged the $2-billion tax demand by tax authorities, has now filed a revised draft with the Bombay High Court seeking to challenge the government's move to change tax laws. The petition will come up for hearing before the high court on June 23.
The ministry had amended Section 201 of the I-T Act with retrospective effect from 2002. The amended law stipulates that the buyer of the shares of a company is liable to pay taxes in India. "Pursuant to the order passed by the Mumbai (Bombay) High Court in the last hearing of the Vodafone tax case, the company has amended its writ petition challenging the constitutionality of the retrospective amendment of the changed tax law. The revised writ was submitted to the high court on June 12," the telecom provider said in a statement here today.
The court has directed the I-T department to respond in a week.
The I-T department had sought $2 billion as capital gains from the sale of Hutchison's 66 per cent stake in Hutch-Essar to UK-based telecom major Vodafone for $11 billion in 2006. This was challenged by Vodafone, stating that the seller is liable to pay taxes in India, and not the buyer.