Vodafone International Holdings B.V. v. Union of India

Holding

Sale of shares of a foreign holding company that indirectly owns Indian assets was not taxable in India under the Income-tax Act 1961 as it stood prior to retrospective amendments.

Facts

Vodafone acquired Hutchison's Indian telecommunications business through a sale of foreign-holding-company shares.

Reasoning

Chief Justice Kapadia held there was no charge on offshore transactions absent specific charging provision. India later amended the law retrospectively to tax indirect transfers; the controversy contributed to a fundamental change in India's international tax policy and required treaty-renegotiation activity.