Nokia India's workers move Delhi HC for safeguarding their interests

Workers of Nokia India's mobile manufacturing unit in Chennai on Monday moved the Delhi High Court seeking safeguarding their interests in view of the company's ongoing legal battle with the Income Tax (I-T) department over its tax liabilities.

The counsel for the workers told a bench of Justices Sanjiv Khanna and Sanjeev Sachdeva that an application has been filed seeking impleadment as a party in the legal tussle. Fearing job loss, the plea said that the workers want the mobile manufacturing unit in Chennai to continue its operation irrespective of the outcome of the case.

The plea also seeks judicial intervention in ensuring the interests of the workers in view of the Nokia-Microsoft US$ 7.2 billion deal. The workers have moved the court in the wake Nokia's submission in the high court earlier that if the sale of Nokia's unit in Chennai does not takes place, the company's Indian arm will wind up its operations over a period of 12 months and the assets will have little value.

Nokia's offer to pay a minimum of Rs 2,250 crore, which could increase depending upon the outcome of its deal with Microsoft, was turned down by the I-T department on December 2 during the proceedings before the high court. During an earlier hearing, the I-T department had informed the high court that Nokia India's tax liability is over Rs 6,500 crore.

Thereafter, in its reply to Nokia's plea, for unfreezing of its assets in India, the I-T department has said that hat Nokia India and Nokia Corporation owe it Rs 21,153 crore as total tax liability (existing and anticipated), including penalty during a seven-year period from 2006-2013.

The amount payable by Nokia has been arrived at by the I-T department on the basis that the mobile manufacturing firm does not discharge its TDS liability on royalty payments and is not entitled to any deduction under tax laws for operating from a special economic zone (SEZ).

In case TDS liability is paid and the deduction under tax laws for operating from a SEZ is available to Nokia, then its total tax liability (existing and anticipated), including penalty would be Rs 14,200 crore, the I-T department has said.