Chennai: The Madras High Court on Friday asked Nokia's India unit whether it can deposit in an escrow account a part of the Rs2,400 crore in value added tax demanded by the Tamil Nadu government. The Finnish handset maker said it cannot do so since it is in financial difficulty and offered to prove it to the court next week.
Nokia had moved the Madras High Court against the demand by Tamil Nadu sales tax department, which alleged that the company sold mobile phones meant for exports in the domestic market and that it owed taxes for fiscal years 2009-10, 2010-11 and 2011-12. Nokia has said the claims are baseless.
It was a twin blow to Nokia, after a Supreme Court order early this month asked it to provide aRs3,500-crore guarantee before it transfers its Sriperumbudur plant, around 40 kms from Chennai, to Microsoft, upholding a lower court decision. “We already have to handle the Rs3,500-crore guarantees as directed by the Supreme Court. We can prove to court about our financial position next week,” Nokia's senior counsel Arvind P DatarBSE 0.00 % told the court. “Nokia came to India on the government invitation instead of going to China and treatment like this done to meet its revenue targets will force investments out of Tamil Nadu.”
Advocate General AL Somayaji said the company has not submitted any documents supporting it has exported. Datar responded saying Nokia exported mobile phones worthRs3,904 crore to several countries during these years in question and the country has earned foreign exchange.
“How did it come? By selling it in dollars to Madhya Pradesh?” He also argued the company has all the documents, including 1.18 lakh bills of lading, customs documents, which are filed with Deputy Commissioner of the SEZ and others. He also mentioned that the company was not given an opportunity to explain its stand.