At least half a dozen major mergers and acquisitions by foreign companies involving Indian

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assets may come up for scrutiny by the income-tax department as a direct fallout of the Mumbai High Court order on Vodafone’s tax liability.

“We will pursue similar cases where taxes can be collected from cross-border mergers and acquisitions,” said a finance ministry official on condition of anonymity.

The court ruled on Wednesday that the income-tax department had the jurisdiction to collect taxes, if any, in the deal. Officials in the IT department have put the tax liability of the Vodafone-Hutchinson deal at $2.6 billion.

The first major deal from which Indian authorities may collect tax would be the proposed $8.48 billion sale of 51 per cent stake in Cairn India by its parent Edinburgh-based Cairn Energy to UK-based Vedanta Resources, controlled by Anil Agarwal. Cairn India operates major onshore oilfields, including the Mangalam assets in Rajasthan.

“Tax will be paid in both India and UK,” a Cairn Energy spokesperson said. Corporate dealmakers have put the tax liability of the deal at about 13-14 per cent of gross proceeds of the sale.

One specific deal that is being talked about involves AT&T Wireless Services that sold 50 per cent holding in Idea Cellular to Aditya Birla group in 2005. Later, it offloaded the rest of its stake held through its Mauritius arm, Apex Investments (Mauritius) Private Ltd, to Tatas.

The court order may lead to opening of cases like Vedanta’s takeover of Sesa Goa where the tax department had raised objections saying no taxes were paid in a deal where Indian assets changed hands.

“The income-tax department has initiated proceedings in several cases of mergers and acquisitions involving foreign players in Hyderabad, Bangalore and Pune,” said a senior income-tax official with direct knowledge of the Vodafone case.

I-T officials maintained that cross-border mergers and acquisitions done through tax havens like Mauritius, Delaware and Cayman Islands to evade tax liability would be impacted in a big way.

“If a foreign company has made substantial profits from sale of assets to another company, it will have to pay taxes in India. That is the message,” said an I-T official involved in Vodafone case.