The Madras High Court has set aside the tax claim of Rs 1.31 billion issued to Nokia India by the Commercial Tax Department of the Tamil Nadu government. The department had issued tax notice to Nokia India for concealing information regarding the sale of taxable scrap for seven years. Further, it mentioned that the company had suppressed information about non-payment of tax on sale of its assets for six years and incorrect tax rate on sale of accessories and mobile phone parts for two years.

Subsequently, the authority issued notices to Nokia India to revise its assessments for all the seven years and had proposed to levy penalty on the company along with interest expense for late payment of tax.

However, Nokia argued that the assessments were based on its own books of accounts and the imposition of penalty was, therefore, not valid. Further, Nokia India has been of the view that the addition of probable omission and suppression of scrap sales is also unwarranted.

In its verdict, the court has withdrawn the penalty imposed on the company citing the incomplete examinations of the various aspects related to the allegation on Nokia India.  However, the court has upheld the incorrect tax rates on sale of accessories and mobile phone parts for 2011-12 and 2012-13, terming them legal and valid.