Global telecom giant, Vodafone ahs served a Notice of Dispute to the government of India for the proposed changes recommended in the Indian Finance Bill 2012 for the Income Tax Act.

The company argues that the changes would violate international legal protections that were granted to Vodafone and other international investors in India. The company has requested the government to scan the planned changes or at least amend retrospective aspects of the proposed legislation as it would like to reach an amicable solution to the issue.

India's highest court, the Supreme Court of India had dismissed the government's demand for $2.2 billion in taxes from Vodafone for its acquisition of Hutchison Whampoa Ltd's India operations in 2007. The victory had ended the case but there are concerns that the company will be forced to pay taxes if the recommended changes are implemented.

Finance Minister Pranab Mukherjee is backing the proposed changes to the Income Tax Act with retrospective effect, which could once again open the Vodafone tax case making company liable to pay about Rs 11,000 crore as tax for an acquisition deal.

A Vodafone spokesman has said that the changes proposed by the government aims to apply tax liabilities on a retrospective basis, something that did not exist in the India law at the time if the acquisition of Hutchison's share in the India based telecom operations.

Mukherjee has introduced a proposal in the Finance Bill that affects the way foreign companies are taxed for dealing with Indian assets. Many believe that the proposal could result in opening up of the Vodafone tax case.