'Hi, I have worked in the US for 5 years on an H1, filed by taxes for all the years and have moved back to India for good in 2006. Last week after 4 years of my returning to India I get an income tax notice stating that I need to pay taxes for 2007 and 2008. I was not even present in the US during that period and have no income from investments or interests. Did anyone else face a similar situation. I got the letter from the Franchise Tax Board of California'

You should reply to FTB's letter stating that you are not a resident of CA since 2007 and do not have any CA income.

I agree with MukatA. A letter (or phone call or email) to the FTB shoud resolve your problem with California.

Do NOT ignore the letter. The states are so desperate for money that they are not above contacting the Indian tax authorities for help getting you to pay taxes they believe you may owe them.