Vodafone International Holding V. Union of India, (2012) 6 SCC 613

Nikhil Raghav, Lloyd Law College

BACKGROUND OF THE CASE

There were 4 companies involved in this case namely

1. Hutchison Telecommunications Hong Kong Holdings Limited

2. CGP Investment Holding Ltd (Cayman Island)

3. Hutch Essar Ltd

4. Vodafone International holding ltd Netherland a subsidiary of Vodafone Group Plc(UK)

Hutchison Telecommunications Hong Kong Holdings Limited created an entity by the name of CGP Investment Holding Limited in Cayman Island. Cayman Island is a Tax Haven country. In simple words, Tax Haven is a country where the tax is not levied or is levied at a negligible rate.

CGP Investment Holding Limited was a 100 % subsidiary of Hutchison Telecommunications Hong Kong Holdings Limited. CGP Investment Holding Limited was holding 67% shares of Hutchison Essar Limited based in India. There was a conglomerate between Hutchison and Essar for running the telecommunication business in india. Since November 1994, it has held telecommunications licences to provide mobile phone service in various areas throughout India.

Hutchison Telecommunications Hong Kong Holdings Limited wanted to sell its business and was searching for prospective buyers. Vodafone emerged as the top contender for acquiring the company. With the purpose of evading the Taxes Hutchison Telecommunications Hong Kong Holdings Limited acted in a cunning way.