The government on Friday asked Vodafone to pay Rs 11,218 crore in taxes within a month for the acquisition of Hutchison’s stake in the telecom joint venture in India in 2007.

“The IT department today issued an order raising a tax demand of Rs 11,217.95 crore on Vodafone International holdings BV treating it as an assessee in default… for failure to deduct tax as required before making a payment of USD 11,076 million (about Rs 55,000 crore) to Hutchison Telecommunication International Ltd,” an official statement said in New Delhi.

The notice was issued following the Supreme Court directive on 27th September to the IT assessing officer to determine and quantify the tax liability of Vodafone within four weeks.

Vodafone had bought majority stake owned by Hutchison in the Hutchison-Essar joint venture offering mobile services in India.

Vodafone Essar, however, contested the tax notice.

“Vodafone strongly disagrees with the tax calculation released by the Indian Tax office to the media today,” the company’s spokesperson said in a statement.

“Vodafone continues to believe that it is not liable for any tax on this transaction involving the transfer of a company outside of India. Further, Vodafone was the acquirer and not the vendor and has made no gain on the transaction,” the spokesperson said.