HC sets-aside TN Rs 2,400 crore tax notice on Nokia

PTI Chennai Bureau

Chennai, Apr 29(PTI) In a relief to Finnish-handset maker
Nokia, the Madras High Court today set-aside the Tamil Nadu
Government's Rs 2,400 crore VAT demand and directed the
authorities to review the tax assessment "afresh".
    Justice B Rajendran who allowed the petitions filed by
Nokia challenging the Sales Tax department assessment for
period 2009-10, 2010-11, 2011-12 and slapping notice for
Rs 2,400 crore TNVAT, set aside the order and directed the
company to deposit 10 per cent of the tax demand amounting
Rs 240 crore within eight weeks "as a precondition to review
the assessments".
    The Judge also directed the Deputy Commissioner (CT) of
Enforcement (South) to give an opportunity to Nokia for
hearing, peruse the documents and then pass orders on "merits"
in accordance with law upholding the handset makers'
contention that the order was passed without being heard.
   The Judge, while declaring that the demand notices issued
by the authorities are still valid, in his order said "the
effect of quashing the assessment orders will not totally take
away the right of the authorities to proceed further in this
matter."
    The Judge rejected the contention of Advocate General A L
Somayaji that there was no need to give personal hearing and
observed said "when such an opportunity of hearing is
specifically sought, it has to be extended to the petitioner.
Non-consideration of the same vitiates the impugned orders."
    Tamil Nadu Government slapped the Rs 2,400 crore tax
notice accusing Nokia of evading tax, but the company disputed
the claim.
    On March 28, Nokia moved the High Court and prayed for
restraining the Sales Taxes Department from taking any
coercive steps in any manner whatsoever in pursuance of the
impugned order.
    The state government had issued the notice to Nokia
charging the company had been selling the products produced
from Chennai plant to the domestic market, instead of
shipping them overseas.
    Nokia management had responded to the notice, saying that
it was a "baseless" claim by the Sale Tax Department.