British phone giant Vodafone has served a legal notice on the Indian government over a plan to retro-actively tax overseas business deals.
The company contends it violates the rights of foreign investors.
Vodafone asserts the Indian move is a bid to bypass a Supreme Court ruling dismissing a $2.2 billion tax bill.
The tax was imposed on the company over its takeover of Hong Kong-based Hutchison Whampoa's Indian cellular unit in 2007.
The notice was served by Vodafone's Dutch subsidiary, Vodafone International Holdings BV, as the takeover was struck between Vodafone's Dutch subsidiary and a Cayman Islands-based company that held Hutchison Whampoa's India assets.
New Delhi's planned change to the Income Tax Act would be retroactive to 1962 and would oblige domestic and foreign firms alike to pay tax on any transaction involving an Indian asset.
