I-T dept moves HC for clarification on Nokia order

The income tax department on Friday informed the Delhi High Court that the guarantee given by Nokia for lifting the freeze on its Chennai plant will not serve any purpose as it does not give specific information under different subheads, which is required for unfreezing the unit.

The income tax department has sought "directions/clarifications" of the high court's 12 December order that lifted the freeze on the assets of mobile phone handset maker Nokia India.

The high court allowed Nokia's plea to lift the freeze on the plant to facilitate its transfer to Microsoft on the company depositing Rs2,250 crore ($367.17 million) in an escrow account. (See: Delhi HC unfreezes Nokia's Chennai plant)

A bench, headed by Justice S Ravindra Bhat, posted the IT department's plea for 17 January before the bench that had issued the 12 December order lifting the freeze paving the way for the sale of Nokia's mobile handset business to Microsoft, subject to certain conditions.

The court lifted the freeze on Nokia's Chennai plant on 12 December month, subject to a guarantee by Nokia Finland to pay up the tax amount if the company lost the case in the court. The freeze was lifted to enable the completion of the global company's $7.3-billion deal with Microsoft.

The IT department, in its fresh application, said "in the conditions imposed by the High Court ..., the situs of amount of Rs3,500 crore and the realisation thereof is not stated/directed.

"It is requested, for the sake of clarity, to issue necessary directions for placing the aforesaid amount also in an escrow account preferably in India. The IT department also very humbly seeks directions/clarification for payment of the said amount of Rs3,500 crore as and when the demand is raised and is due for payment."

The court had, on 12 December, allowed the plea of Nokia for lifting of a stay on transfer of its assets in India after the said the injunction jeopardized the sale of its Indian arm to Microsoft under a $7.2 billion global deal.

The I-T department, which had rejected the offer of Nokia to pay a minimum deposit of Rs2,250 crore to it, said Nokia India and Nokia Corporation owe it Rs21,153 crore as total tax liability (existing and anticipated), including penalty during a seven-year period from 2006-2013.

The I-T department has also sought certain directions "pertaining to the mechanism for adjustment of refunds till the tax issues reach finality."

"Petitioners have yet to furnish the undertaking and guarantee bond in terms of the Court's directions dated 12.12.2013 and the appellant/respondents (IT department) reserve their right and seek liberty to give their comments /response/objections, if any, as and when the guarantee bond/undertaking is made available by the Petitioners (Nokia)," it said.