Today was supposed to be D-day in the USD 2-billion Vodafone income tax case. But that did not happen. It is a USD 2 billion-tax case and considering the significance and the importance of it, the High Court has decided, it will hear it on a daily basis from March 10 for five days. That will be the final hearing of that matter, the Bombay High Court after hearing both sides in the chambers later decided to admit the petition subject to maintainability, which means the Vodafone writ petition seeking to quash all IT Department notices has been admitted but subject to maintainability. Both sides are spinning it their way.

Vodafone sources are saying that this is a big step forward for them that Bombay High Court will now decide the matter and not the Tax Department. The Tax Department on the other hand says that the Bombay High Court can still dismiss this petition saying it is not maintainable and can give it back to the Tax Department.

There were some preliminary arguments that happened today. The Vodafone Tax Counsel said that the transaction happened on foreign shores. It was a Cayman Island that was sold by Hutchison to Vodafone and there is no question of any tax in India. It is a foreign transaction that happened on foreign shores.

Very clearly, the Tax Department Counsel said that this is a transaction that may have happened overseas, but it ultimately resulted in change in ownership and control of an Indian company Hutch-Essar. Therefore the transaction ought to be taxed in India. The Bombay High Court will decide the matter in all probability in March.