With one of the largest M&A transactions India Inc. has ever witnessed coming under the tax net, other cross-border deals, not only in telecom but also in other sectors that have taken place in the recent past, may too have to brace up for closer scrutiny from tax authorities. Vodafone case might have opened a Pandora's Box.

In what is been considered as a major blow to Vodafone, the Supreme Court has directed it to respond to the show cause notice of the Indian IT department slapping about $1.7 bn as capital gains tax. The issue can be traced back to 2007, when Hutchison Telecommunication International (HTIL), a Cayman Islands-based company belonging to the Hutch Group of Hong Kong sold its stake in CGP Investments Holdings (CGPI) another Cayman Islands-based firm, to Vodafone BV, a Netherlands-based company belonging to the Vodafone Group of UK.

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