The Income Tax department on February 4 has issued a reminder notice to Vodafone over its Rs 14,200 crore tax dues and threatened to seize assets in case of non-payment. The tax is due on Vodafone International Holdings BV’s $11 billion acquisition of Hutchison Whampoa’s India telecom business in 2007.

Vodafone said in a statement that, when Prime Minister Narendra Modi is promoting a tax friendly environment for foreign investors, but this seems a complete disconnect between government and the tax department.

Vodafone has repeatedly clashed with the authorities over taxes since it bought 67% stake in Hutchison Essar, a mobile phone operator in India for $11 billion.

The Vodafone has disputed the tax demand arguing that no tax was due as the transaction was conducted offshore. But the tax department's contention is that capital gains were made on assets in India. The matter is under international arbitration.