In the previous budget proposal, 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 is also liable to pay taxes in India.
"Pursuant to the order passed by the Mumbai 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, 2008," the company said in a statement here today.
The court has now permitted a week thereafter, for the Tax Office to respond, it said.
The I-T department had sought capital gains from the sale of Hutchison's 66 per cent stake in Hutch-Essar to US-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.
The amendment will not go against Vodafone and now the company has amended its earlier writ petition filed with Mumbai High Court and has sought that it should be exempted from this amendment.
