Author: K Radhakrishnan
Bench: S.H. Kapadia, K.S. Radhakrishnan, Swatanter Kumar
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.733 OF 2012
(arising out of S.L.P. (C) No. 26529 of 2010)
Vodafone International Holdings B.V. ... Appellant(s) versus
Union of India & Anr. ...Respondent(s) J U D G M E N T
S.H. KAPADIA, CJI
1. Leave granted.
Introduction
2. This matter concerns a tax dispute involving the Vodafone Group with the Indian Tax Authorities
[hereinafter referred to for short as "the Revenue"], in relation to the acquisition by Vodafone
International Holdings BV [for short "VIH"], a company resident for tax purposes in the
Netherlands, of the entire share capital of CGP Investments 2
(Holdings) Ltd. [for short "CGP"], a company resident for tax purposes in the Cayman Islands
["CI" for short] vide transaction dated 11.02.2007, whose stated aim, according to the Revenue,
was "acquisition of 67% controlling interest in HEL", being a company resident for tax purposes
in India which is disputed by the appellant saying that VIH agreed to acquire companies which in turn
controlled a 67% interest, but not controlling interest, in Hutchison Essar Limited ("HEL" for
short). According to the appellant, CGP held indirectly through other companies 52% shareholding interest in
HEL as well as Options to acquire a further 15% shareholding interest in HEL, subject to relaxation of FDI
Norms. In short, the Revenue seeks to tax the capital gains arising from the sale of the share capital of CGP on
the basis that CGP, whilst not a tax resident in India, holds the underlying Indian assets.
Facts
A. Evolution of the Hutchison structure and the Transaction
3. The Hutchison Group, Hong Kong (HK) first invested into the telecom business in India in 1992 when the
said 3
Group invested in an Indian joint venture vehicle by the name Hutchison Max Telecom Limited (HMTL) -
later renamed as HEL.
4. On 12.01.1998, CGP stood incorporated in Cayman Islands, with limited liability, as an "exempted
company", its sole shareholder being Hutchison Telecommunications Limited, Hong Kong
["HTL" for short], which in September, 2004 stood transferred to HTI (BVI) Holdings Limited
["HTIHL (BVI)" for short] vide Board Resolution dated 17.09.2004. HTIHL (BVI) was the buyer
FOR MORE CLICK Vodafone International Holdings ... vs Union Of India & Anr
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