"You (IT department) have to take a decision. Say yes or no. If it is acceptable say yes, if not, say no. Either way but you can't say we will not decide," a bench of justices Sanjiv Khanna and Sanjeev Sachdeva said.
The court, meanwhile, adjourned the hearing in the case to December 2 on the plea of the IT department.
The company submitted that once the sale of its business to Microsoft is completed, it is willing to pay a minimum deposit of Rs 2,250 crore as tax and the amount could be higher depending upon the final sale price.
The IT department told the court that the tax liability of Nokia is nearly Rs 6,500 crore.
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Nokia said if the sale of its Indian unit in Chennai does not happen, the company will wind up its operations here over a period of 12 months and in itself the assets here will have little value.
The high court had, however, observed "any successor would be bound to pay the tax liabilities of its predecessors as per statutory provisions".
"Immediately after sale, irrespective of the sale price, we will deposit Rs 2,250 crore. If the sale price is much higher, we will deposit the entire surplus after adjusting outstanding liabilities, excluding income tax liabilities," Nokia's counsel had said.