 "Nokia tax row: Tamil Nadu appeals against single-judge order")
Nokia had recently challenged a part of the same order, which asked the company to deposit 10 per cent of the state government's tax claim within eight weeks.
A Nokia spokesperson said: “We remain confident of our position and believe the tax department’s claim is without any merit. We will continue to defend ourselves vigorously and look forward to being afforded an opportunity to present the facts here.”
Both appeals have been posted together for hearing on a later date.
The appeals were filed against the order passed on April 29 by judge B Rajendran, who asked the Department to hear the tax matter afresh and to give an opportunity of personal hearing to the company while giving eight weeks' time to the company to deposit the 10 per cent of the tax claim of Rs 2,400 crore.
The company has challenged the order saying that when the assessment orders passed by the Deputy Commissioner (Commercial Tax) have been set aside and quashed by the Single Judge, there is no basis in law for directing the company to deposit 10 per cent of the tax amount as a pre-condition for reviving the orders.
All these development was related to a dispute between the company and Commercial Tax Department, which slammed a Rs 2404 crore notice against the company. According to earlier reports, the notice was issued alleging that the company sold mobile phones meant for exports in the domestic market and they need to pay VAT for three fiscals including 2009-10, 2010-11 and 2011-12.
Earlier Nokia argued that it don't have any solid cash in its account and also argued that of the total tax of Rs 2,404 crore, which was sought by the Department, export sales was around Rs 2,390 crore and export sales are not subject to tax on sales of goods in India. And these sales cant be treated as interstate sales levy Central Sales Tax, therefore the question of 10% of the entire tax amount does not arise.
The company's Senior Counsel said, "The company does not have enough liquidity to pay, as it has paid over Rs 780 crore in 2013-14 to the Income Tax Department (to the Centre in the ongoing Rs 21,000 crore tax dispute)." He also argued that the company was not given opportunity for personal hearing.
It may be noted that the mobile handset manufacturing facility of Nokia at Sriperumbudur, near Chennai, was excluded from the recently concluded deal between Nokia and Microsoft for the formers' Devices and Services business, as the Income tax department at the Centre has freezed the facility, as it has slashed a Rs 21,000 crore tax notice on the company. The Department refused to allow transfer of the plant till the dues claimed by the department are not remitted by the company.
The facility has become a contract manufacturer for Microsoft, raising concerns among the employees about their job security. A large section of the workers in the facility has opted for Voluntary Retirement Scheme, while around 800-900 workers are working in the production facility at present, according to the Union sources.