SC asks Nokia, I-T dept to resolve issues

The case is related to Microsoft buying stake in Nokia in a $7.5-billion global deal

 

The Supreme Court on Monday asked income tax authorities and Nokia India to “find a way out” of the imbroglio in a case related to Microsoft buying stake in Nokia in a $7.5-billion global deal. The court said it would take up the case next on March 11.

Nokia had appealed to the court after a Delhi High Court order imposed certain conditions on Nokia India and its Finnish parent, which the company argued were ultra vires and illegal.

Mukul Rohtagi, the Nokia counsel, told a bench headed by judge Anil Dave if the deal between the Finnish mobile devices manufacturer and Microsoft failed to materialise because of income tax disputes, it would have harsh consequences. There are 35,000 jobs at stake at the company’s manufacturing plant in Chennai. If the deal didn’t go through, the plant would be closed, the counsel said. He added if the unit wasn’t sold, the amount fetched would be far below expectations.

Rohtagi said the issue of Rs 2,800 crore demanded by revenue authorities as tax deducted at source could be resolved, adding both parties had agreed on this to an extent. For the rest of the amount, the company was willing to give a guarantee against attachment.

Solicitor General Mohan Parasaran, appearing for the tax authorities, said the company had already moved the high court for a modification of the order.

In its order in December, the high court had allowed the sale of Indian assets after imposing certain conditions, which were opposed by Nokia. Apart from depositing the tax dues in an escrow account, the order asked Nokia Finland to be bound by the statement that it would be jointly liable and pay the tax determined under Indian law, along with interest and penalty.