Delhi HC Asks Lower Court To Pass Judgement In Huawei CEO’s LOC Rejection Plea

The Delhi High Court has commanded a lower court to expeditiously decide over Huawei India CEO’s (Li Xiongwei) plea to quash the look-out circular (LOC) that has been issued against him by the I-T department.

According to an ET report, the High Court said that the trial court shall consider Huawei India CEO’s petition for cancellation of LOC and for granting him permission to travel abroad as per law. 

In a ruling, the High Court also said that Huawei India’s CEO should file an application in the trial court within a week and meanwhile, asked the trial court to pass a judgment within four weeks.

A few days ago, the I-T department informed the High Court that a LOC was issued against Huawei India’s CEO for his misconduct during the investigation that showed he might flee the country.  

During the probe, the I-T department revealed that the CEO was uncooperative and did not give access to the company’s auditing books and emails of individuals working in key management including Huawei India’s CFO. 

On May 25th, Huawei India’s CEO attempted to leave India but was denied boarding a flight to Bangkok owing to the LOC circular. Following this, he appealed to the Delhi High Court challenging the I-T department’s action. 

Prior to that, Huawei’s auditor also told the I-T department that the Chinese smartphone maker’s 

raw ERP data dump was insufficient to audit financial books. According to the I-T department, the auditor’s statement was true to its claims that Huawei’s Indian entity has insufficient data dump to calculate its taxable income.

Earlier on, the I-T department held Huawei India accountable for transferring scores of money to its parent company in China in the form of dividends. As per the government body, the Chinese smartphone maker used this tactic to reduce its taxable income in India. 

In the last two years, the Centre is tightening its hold over several Chinese entities that are evading taxes or working illicitly in India. Xiaomi, Vivo, and Oppo are some of the Chinese smartphone makers that have made tax evasions.  

Besides, the Centre is also taking stringent measures to reduce Chinese investors’ and companies’ participation in the country. For this, it took various actions including amending the foreign direct investment policy and probing Chinese investors-backed Indian startups, among others.