Nokia Tax Issue Hearing Postponed to June 25

Madras High Court Wednesday adjourned to June 25 the further hearing of appeals filed by Finnish handset maker Nokia as well as Government of Tamil Nadu over the issue of Rs. 2,400 crore of tax demand by the state government.

The first bench, comprising Acting Chief Justice Satish K Agnihotri and Justice M M Sundresh postponed the appeals to that date on the request of the counsels.

The single Judge had on April 29 directed Nokia to deposit 10 percent on the total demand of Rs. 2,404 crore of Sales Tax on sales and remit back the matter for fresh consideration by the Deputy Commissioner (CT) of Enforcement (South).

The Judge, while declaring that the demand notices issued by authorities are still valid, had said that the effect of quashing the assessment orders would not totally take away the right of the authorities to proceed further in this matter.

Both the State Government and Nokia filed appeals Wednesday against the order.

Nokia claimed the question of demand notices being valid does not arise at all when the Single Judge had set aside the assessment orders of the Commercial Taxes Department and had directed the officer to reconsider the matter afresh.

(Also see: Nokia Seeks Resolution of India Tax Dispute Under Bilateral Pact)

It also said export sales are not subject to tax on sale of goods in India and such sales in any case cannot be treated as inter-state sales for levy of Central Sales Tax. So the question of depositing 10 percent of the entire tax amount does not arise at all, the company said.

Nokia further submitted that the single Judge having held that the department ought to have given the company an opportunity to be heard and for perusal of voluminous documents running to several lakhs of pages, had erred in passing orders to pay 10 percent of the amount.

Government held that the single judge had erred in entertaining a petition when an appeal provision was available to the company before the Department, which came to the court directly without utilising it first.

(Also see: Court orders review of India's tax demand from Nokia)

The First bench then posted the appeals for further hearing to June 25.