Attorney-General Goolam E Vahanvati has said that telco major Vodafone is liable to pay tax for its purchase of Hutchison Whampoa’s Indian operations in 2008 for $10.7 billion, according to Economic Times.

The then finance minister Pranab Mukherjee while presenting Union budget had said that that 50-year-old tax laws would be amended retroactively to allow the government to tax the purchase of Indian assets, even if the deal was between foreign companies.

The ET report said that Vahanvati, in a single-page opinion sent last week to the law ministry, reiterated the position that Vodafone could be taxed for its 2007 deal, as a result of the controversial amendments in laws introduced earlier this year allowing the government to tax past transactions.

The contention of Vodafone is that Indian authorities have no right to tax the transaction between two foreign entities and even if tax was due, it should be paid for by the seller not the buyer. The government says that Vodafone should have withheld taxes from Hutchinson at the time of the deal.

Vahanvati said that such tax may be collected and recovered and appropriated in accordance with the income tax act not withstanding any judgement decree or order of any court,” the Attorney General has said. He said that notice can also be sent to Hutch immediately to initiate proceedings to recover the taxes due.