Leading telecom giant, Vodafone got no respite from the Supreme Court for the petition, it filed in SC, challenging show-cause notice issued by the income-tax department. The Supreme Court dismissed the special leave petition and directed it to reply show cause notice given by income tax department.

A tax partner with BMR Advisors, Mukesh Bhutani said, "This is evident from the fact that the Supreme Court refused to intervene in the case and asked Vodafone to present its version before the revenue authorities and respond to the show-cause notice."

It should be recalled that Vodafone had brought 52 per cent stakes in Hutchison in February 2007 for $11.2 billion. The income tax department has been demanding capital gains tax worth $1.7 billion from Vodafone which the company has been denying to pay on the grounds that IT department has no jurisdiction over a deal between two overseas companies. The Bombay High Court had already rejected it writ petition and asked to abide Indian tax rules.

A bench headed by Justice SB Sinha said that there is no need for judicial intervention. Vodafone has now no option but to divulge details of its acquisition of Hutchison's
52% stake in Hutch-Essar. The company can be asked to pay a penalty and 18% annual interest if it finds defaulter of tax payments.

Vodafone spokesperson said, "Given the fact that the petition filed by Vodafone involves important questions of jurisdiction, the Honourable Supreme Court of India has asked the tax authorities to decide, as a preliminary issue only, whether it has jurisdiction to proceed against Vodafone."