The Delhi High Court, on Friday, declined the request of the Income Tax Department to direct Nokia India to deposit Rs.3,500 crore in an escrow account for any future tax demand, and clarified that the company did not need to pay the sum immediately.

“We want a simple undertaking that you (Nokia India) have gone through the order and accept the condition (stated therein),” the court said to the company.

The I-T Department had, in a fresh application, sought directions to the company for placing the Rs.3,500-crore in an escrow account preferably in India.

“...We have not accepted the request of Revenue for deposit of Rs.3,500 crore in their escrow account. The request is not in nature of clarification, and is beyond the scope of the order (of December 12, 2013, paving way for sale of Finnish mobile firm to Microsoft subject to certain conditions),” a bench of justices Sanjiv Khanna and Sanjeev Sachdeva said.

The court also said Nokia India did not need to pay the amount immediately but as and when the demand was raised by the Income Tax Department. To a Nokia India’s query, it said, “You will have to pay that amount if you fail to get a stay. Demand will be enforced only if there is no stay.”

The Revenue Department had in its application by way of a clarification demanded that the company should deposit Rs.3,500 crore in their escrow account for future tax demands.

To this the bench remarked, “Understand the consequences of your argument. If we accept what you are saying, if you take a microscopic view, Nokia India would be wound up.”

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