The Madras High Court directed Nokia India to deposit 10 per cent of the total ₹2,400-crore Value Added Tax claim by the Tamil Nadu Commercial Tax Department.

The Court also ordered the Department to ‘reconsider the entire matter afresh’ and give Nokia India a personal hearing on the issue.

The order passed by Justice B Rajendran today relates to a petition by the Finnish Telecom company on a VAT demand totalling over ₹2,400 crore for three assessment years from 2009-10 to 2011-12.

The Department had issued notice rejecting Nokia India’s claim for exemptions on account of interstate sales, export sales and stock transfer and said it proposed to levy the tax.

Nokia India has maintained that the majority of transactions are export transactions but the authorities have treated them as internal sales.

The Judge said Nokia should deposit ₹ 240 crore within eight weeks. The telecom major has also been directed to submit all documentary evidences for consideration by the Deputy Commissioner, Commercial Tax. While quashing the Tax Department’s orders, the High Court said its demand notices are valid and the Department can proceed further in the matter. It directed it to give Nokia India a personal hearing and consider the issue afresh.

Nokia is in possession of voluminous documents running to nearly 16 lakh pages. The assessing officer ought to have afforded an opportunity of hearing to the petitioner for perusal of such voluminous documents.

At the same time, the State Government revenue also has to be safeguarded.

Reacting to the Court’s order, Nokia India said in a statement, “Nokia is weighing its options for legal recourse post today’s Madras High Court ruling. It would like to reiterate that it continues to see the Tamil Nadu claim as without merit and will defend itself vigorously.”

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