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The counsel representing the CEO said that foreign nationals in India had the right to life or personal liberty that is granted by the Constitution.
The court dismissed the appeal filed by the Income Tax(I-T) Department against a trial court order quashing the lookout circular (LOC) against Li.
Justice Anu Malhotra upheld the trial court’s order saying the FDR will be forfeited if Li does not cooperate with the investigation or if he does not appear before the trial court when required.
“The directions quashing the imposition of the conditions of deposit of an FDR of Rs 5 crore drawn on a nationalised Indian bank and forfeiture thereof on non-joining of the investigation and non-appearance as and when directed by the trial court have been imposed to take into account the eventuality of the alleged commission of an offence punishable under the Income Tax Act,” the high court order read.
In February this year, the I-T Department froze the bank accounts of Huawei India. The company then moved the Delhi High Court against this action, saying that the department had closed their accounts without giving them any notice. The company told the court that their business was affected after their bank accounts were frozen.
Meanwhile, the I-T department had said, according to some news reports, that Huawei Telecommunications India had sent nearly Rs 750 crore to its parent company in dividends for at least two financial years to reduce its taxable income in India ‘even when its revenue was reducing drastically’.
During the inspection of the company’s account books, which was started on February 15 this year, the I-T department said that Li did not cooperate with the investigation. “Even the documents sought by I-T officers were not supplied by Li or any other personnel of the company,” the department said. The officers also alleged the statements given by different personnel of the company did not match each other.
After this, the Deputy Director of I-T Delhi applied for the issuance of a LOC against Li. On May 1, when Li was about to board a flight to Bangkok, he was not allowed to do so and was informed about the LOC notice against him. Li then moved the Tis Hazari trial court to quash the LOC.
The counsel for Li cited the case of Rana Ayyub versus Union of India, where the Delhi HC had quashed the LOC even when it had no reason to believe that she would appear before the court. By this logic, Li was also entitled to the right of quality and he cannot be discriminated against since he is a Chinese national.
The trial court said in its order that since Li does not have properties in India, it is unlikely that once he travels abroad, he will return to India. However, since the nature of the offence is non-cognizable and bailable, it quashed the LOC on the condition that the company should withhold severance pay/package and other incentives/emoluments payable to Li.
The I-T department then challenged this order in the Delhi High Court.
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First Published: Wed, September 21 2022. 19:57 IST