Madras High Court tells tax authorities to desist from drawing money from Nokia's attached account

CHENNAI: In a mild breather to Nokia, the Madras High Court has instructed the tax authorities to desist from drawing money from attached bank accounts in a Rs 190-crore purchasing tax demand slapped on Nokia India Sales Private Ltd.

The issue has to do with purchase of phones by the sales entity from Nokia India Pvt Ltd, which manufactured mobile devices at its now-silent factory in a Sriperambudur SEZ, near Chennai.

The state tax authority had issued a notice on November 7 on the alleged violation.

Two bank accounts of Nokia, in State Bank of India and Bank of America, were seized and the company was given 15 days of time to settle the tax demand.
Following this, Nokia had filed a writ petition challenging the rationale behind the move.

Justice TS Sivagnanam has today posted the matter on November 28, restraining the tax authority from pulling out any money towards the Rs 190-crore demand, but refused to lift the freeze on the accounts.

Nokia is facing severe tax woes in India for alleged violations in paying taxes on royalty payments, and taxes on sale of phones within the country. A freeze on assets held back a large factory in Tamil Nadu in a 5.4-billion-Euro mobile devices sale to Microsoft, resulting in the loss of thousands of jobs.