India Court Says ByteDance Should Deposit $11 Million in Tax Evasion Case

An Indian court on Tuesday dealt a blow to China's ByteDance by dismissing its plea to unblock its bank accounts which have been frozen by federal authorities investigating alleged tax evasion.

An Indian tax intelligence agency in mid-March ordered HSBC and Citibank in Mumbai to freeze accounts of ByteDance India as it probed some of the firm's financial dealings.

ByteDance challenged the move in court saying the freeze amounts to harassment and was done illegally.

After a government counsel said ByteDance owed the authorities about Rs. 79 crores, the High Court in Mumbai said the company will need to keep that amount blocked in a state-run bank.

That "account will be frozen," the two-judge bench said.

ByteDance in January reduced its Indian workforce after New Delhi maintained a ban on its popular video app TikTok, imposed last year after a border clash between India and China. Beijing has repeatedly criticised India over that ban and those of other Chinese apps.

None of ByteDance India's employees have been paid their March salaries due to the account freeze, said two people familiar with the matter. The company told the court it has a workforce of 1,335, including outsourced personnel.

In the 209-page court filing lodged on March 25, ByteDance told the High Court in Mumbai the authorities acted against the company without any material evidence and gave no prior notice, as required by Indian law, before such "drastic action".

Blocking accounts "during the process of investigation amounts (to) applying undue coercion," ByteDance argued. It is "intended, improperly, to harass the petitioner."

[Update, 6 April 2021, 6:43pm]: Bytedance representatives also shared the following comment with Gadgets 360:

We are pleased that the Hon'ble High Court agreed with us that our bank accounts in India should be unblocked. This decision allows us to continue carrying out our operations in India and looking after our employees. We are prepared to take further steps required by the court and are confident in our position on this tax matter.

© Thomson Reuters 2021

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