India’s Finance Minister Pranab Mukherjee has introduced a proposal in the Finance Bill that affects the way foreign companies are taxed for dealing with Indian assets.

Many believe that the proposal could result in opening up of the Vodafone tax case. The long-standing case involves global telecom sector giant and the Indian authorities and is relating to the payment of taxes in the country. The Supreme Court of India had said in a ruling that the British telecom giant has no dues to pay to the Indian taxation authorities.

The company’s court victory in a case, lasting more than four years, came as the Supreme Court dismissed the government’s demand for $2.2 billion in taxes from Vodafone for its acquisition of Hutchison Whampoa Ltd’s India operations in 2007.

The ruling had cleared the confusion on weather global companies can use offshore holding companies to avoid paying taxes in India. Vodafone acquired its partner Essar Group’s stake for $5.46 billion last year to consolidate its control over the company, which is a leading player in one of the biggest telecom market in the world.

The IT department is seeking a review of the ruling because it believes that the judgments suffered from errors, it failed to consider its submissions and that some of the income-tax law provisions were not interpreted correctly.

It is believed that the Indian government has the right to seek taxes from the company and as shareholding of an Indian company in India changed hands without the new shareholders paying tax.