Delhi HC allows Huawei India CEO to travel overseas, refuses to interfere with cancellation of LOC order

The Delhi High Court refused to interfere with an order quashing the Surveillance Circular (LOC) issued at the request of the Income Tax Department against the CEO of Huawei Telecommunications (India), Xiongwei Li, and ordered him to permit to travel abroad under certain conditions.

Judge Anu Malhotra, while deciding the Income Tax Department’s challenge to the trial court’s order, said that Xiongwei – a Chinese national, must undertake to continue to participate in the investigation by video conference, as instructed by the investigator, and also submit a fixed deposit of Rs 5 crore.

“In the circumstances … it is not deemed appropriate by the court to set aside the impugned order dated August 29, 2022 of the learned trial court which set aside the LOC against the respondent,” the court said. in its order dated September 20.

The court said that although Xiongwei falls under the category of “flight risk” due to the absence of any extradition treaty between India and China, the allegation against him is of commission of an offence. unrecognizable and bondable, which cannot be ignored. .

“The complaint that Petitioner (IT Department) filed among others against Respondent (Xiongwei) here referred to as Defendant No. 2 relates only to the commission of an unrecognizable and bailable offense for allegedly refusing authorized agents under the Income Tax Act, 1961, the necessary facility to inspect the books of accounts or other documents in accordance with Section 132 (1) (iib) of the said enactment of the company, M/s Huawei Telecommunications ( India) Company Private Limited (of which he was the CEO at the relevant time),” the court noted.

The court clarified that in addition to his conditions, Xiongwei, represented by lawyer Vijay Aggarwal, must also comply with the conditions imposed by the trial court and notify the authorities seven days before leaving India.

The court also asked him to undertake to appear before the court of first instance in the event of the opening of a trial against him. Attacking the trial court’s order, the income tax authorities told the High Court that there was prima facie evidence indicating “substantial tax avoidance in the case of the company” and that the director financial not being present in India, the presence of the CEO was necessary and therefore a LOC was issued against him.

He also argued that economic crimes involving huge public funds should be taken seriously as they affect the country’s economy as a whole and pose a serious threat to its financial health. Earlier this year, the income tax department carried out multiple searches at several locations of Chinese telecommunications giant Huawei as part of a tax evasion investigation. ADS ADS SK SK

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

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