HC asks Nokia to pay 10% of the Rs 2400-cr tax demand

Madras High Court on Tuesday directed Finnish handset maker Nokia to pay ten per cent of the Rs 2,400-crore (Rs 24-billion) tax claim slapped on it by the Tamil Nadu government.

Justice B Rajendran, allowing writ petitions filed by Nokia challenging the state's Sales Tax Department order directing it to pay Rs 2,400 crore tax for the assessment years 2009-10, 2010-11 and 2011-12, ordered that the company pay Rs 240 crore (Rs 2.4 billion).

The court observed that the Sales Tax Department ought to have given an opportunity to Nokia and heard its objections over the Rs 2,400-crore tax dispute.

The state slapped the tax notice accusing Nokia of evading tax, but the company disputed the claim.

On March 28, Nokia moved the high court and prayed for restraining the Sales Taxes Department from taking any coercive steps in any manner whatsoever in pursuance of the impugned order.

The state government had issued the Rs 2,400 crore notice to Nokia, saying the company had been selling the products produced from Chennai plant to the domestic market, instead of shipping them overseas.

Nokia management had responded to the notice, saying that it was a ‘baseless’ claim by the Sale Tax Department.