In the blitzkrieg between Vodafone and the Government, the Government’s revelation that Vodafone was made aware by it, much before the transaction, of the obligation to deduct TDS on payments to Hutchison, has sent shock-waves amongst Vodafone’s supporters. The sympathy that Vodafone garnered from its’ carefully orchestrated plea that it was an innocent buyer which got caught in the crossfire stands eroded says the author.

The battle between Vodafone and the Government is as interesting off the field as it was on the field. After Vodafone lost two times before the High Court, everyone was complacent that its appeal would be thrown out by the Supreme Court. After all, how can you make billions of dollars of profit from Indian operations and claim that you are not liable to pay any tax in India only because you routed your investments through a paper company in the Cayman Islands? However, Lord Denning rightly said that litigation is a game of chance and the Supreme Court shocked everyone by deciding in favour of Vodafone. You must “look at” and not ‘look through” the transaction, the Court thundered, sinking the hopes of everyone in the Finance Ministry who was salivating at the prospect of Rs. 12000 crores in the kitty.

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