Madras High Court asks Nokia to pay 10 per cent of Rs 2,400 cr tax demand

The Madras High Court has directed Finnish handset maker Nokia to pay 10 per cent of the Rs 2,400 crore 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.

The Tamil Nadu government had slapped the tax notice accusing Nokia of evading tax. It said Nokia had been selling the products produced from Chennai plant to the domestic market, instead of shipping them overseas.

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

The company's management had responded to the notice, saying that it was a "baseless" claim by the Sale Tax Department.

The High Court on Tuesday 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.