The Delhi High Court will pronounce its verdict on Thursday that will determine whether Nokia India will be able to transfer its factory in Chennai to Microsoft Corporation or pay around Rs 21,000 crore as disputed existing and future tax liability to the revenue department.
The factory, which is one of the biggest phone manufacturing unit of the company, was seized by the income-tax authorities because of tax claims. Nokia appealed to the court for lifting of the seizure as it wants to transfer the assets to Microsoft Corporation by December 12 as per their global $7.3-billion deal.
The company has even offered to make a payment of Rs 2,250 crore in an escrow account to facilitate the lifting of the seizure, an offer which has been rejected by the income tax department.
On Wednesday, the Delhi High Court concluded the hearings and reserved its judgment, which is likely to be pronounced on Thursday.
If seizure is not lifted, Nokia would have no option but to continue the operations as a contract manufacturer to Microsoft.
However, the company has said the outer limit for the same would be 12 months after which they may have to wind it up. The uncertainty can become acute if Microsoft declines any proposal of a contract manufacturer. The factory employs around 7,000 workers.