The Supreme Court in India reaffirmed its rejection of a $2.2 billion tax claim by the Indian government against Britain's Vodafone Group PLC, and the government promptly returned a 25 billion rupee ($500 million) deposit to the company.

The court Tuesday rejected the Indian government's $2.2 billion tax claimed on Vodafone's 2007 purchase of Hutchison Whampoa Ltd.'s India operations on Jan. 20, India Today reported. The dispute between Vodafone and Delhi has gone on for five years.

We have carefully gone through the review petition filed by the Union of India on Feb. 17, 2012. We find no merit in the review petition. It is accordingly dismissed, the court said.

Finance Minister Pranab Mukherjee said the government does not intend to appeal the court's Tuesday decision.

The $10.7 billion deal between the two companies was conducted offshore when Vodafone's Dutch subsidiary, Vodafone International Holdings BV, acquired Hong-Kong based Hutchison's Cayman Islands company CGP Ltd., according to Bloomberg Businessweek.

The Indian government proposed an amendment to the tax code last week that would allow it to retroactively tax cross-border transactions as far back as April 1, 1962, Bloomberg Businessweek reported. The change in the tax code, if enacted, would probably allow the government to tax Vodafone's deal with Hutchison.