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The Madras High Court has set aside tax claims made by the Tamil Nadu Commercial Taxes Department against Nokia India Pvt Ltd, amounting to ₹131 crore.
Justice TS Sivagnanam on Tuesday ruled on writ petitions filed by Nokia India over the orders passed by the Commercial Taxes Department for seven assessment years, from 2006-07 to 2012-13.
The petition sought relief from the Department’s decision to revise the assessment filed for these years and levy interest on delayed payments. It claimed that Nokia India had suppressed information relating to the sale of taxable scrap, not paid tax on sale of assets and that the Department had incorrectly pegged the rate of tax on accessories and cell phones.
The sale of assets related to the transfer of business to Nokia Siemens Network Pvt Ltd.
‘Petitions maintainable’In his ruling, Justice Sivagnanam held that the writ petitions are maintainable as the impugned orders of assessment were vitiated on the ground of serious infirmities in the decision-making process; failure to take into consideration relevant particulars and details, and not having assigned reasons.
The judge added that the orders were based on irrelevant considerations and in violation of the principles of natural justice.
According to a counsel for Nokia India, the total amount in dispute was to the tune of ₹131 crore.
On the assessments over imposition of tax on capital assets, the judge set aside the Department’s order and asked the assessing officer to make a “fresh consideration after giving full opportunity, including affording an opportunity for a personal hearing, to the petitioner”.
The tax imposed on the transfer of business to Nokia Siemens was also set aside and the matter was handed “back to the assessing officer to redo the assessment under this head by making a thorough enquiry into the contentions raised by the petitioner….”
Small victoryJustice Sivagnanam upheld the finding relating to the rate of tax on accessories and parts rendered by the assessing officer in the assessment orders for the years 2011-12 and 2012-13, terming them ‘perfectly’ legal and valid.
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