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Nokia India has filed an appeal in the Madras High Court to set aside a single judge order directing the company to pay 10 per cent of the ₹2,404 crore claimed by the Tamil Nadu Government as value-added tax (VAT) dues. The Finnish company is contesting the tax claim.
On April 29, Justice B Rajendran passed an order based on a petition filed by Nokia on a VAT demand by the Tamil Nadu Commercial Tax Department for three assessment years from 2009-10 to 2011-12.
Nokia’s writ petition came up for hearing on Wednesday before the first Bench comprising Acting Chief Justice Satish K Agnihotri and Justice MM Sundresh. The Tamil Nadu Government has also filed an appeal, said sources.
Nokia submitted that there is no provision in the statute that contemplates deposit of an amount as a condition to passing a reassessment order.
The company said as the single judge had set aside the assessment orders and directed the Deputy Commissioner of Enforcement to consider the matter afresh, the question of the demand notices being valid does not arise at all.
The judge, it said, did not appreciate Nokia’s submission that of the total tax demand of ₹2,404 crore, the amount relating to export sales was ₹2,390 crore.
Export sales are not subject to tax on sale of goods in India, and export sales cannot be treated as inter-State sales for levy of Central Sales Tax. So, the question of depositing 10 per cent of the entire tax demand does not arise at all, the company said.
Nokia India has maintained that the majority of the deals were export transactions, but the authorities treated them as internal sales.
Hearing on the case has been posted for June 25.
This case and another involving the Income-Tax Department have left the Chennai plant out of Nokia’s global asset sale deal with Microsoft. Nokia invested over $300 million in its 210-acre plant in Sriperumbudur, on the Chennai-Bangalore National Highway. It has produced over 500 million units from the plant. Over 6,500 employees of this plant recently opted for a voluntary retirement scheme.
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