Nokia officially protests Tadil Namu tax claim

The Tamil Nadu tax department in India made claims as to the legitimacy of Nokia’s tax exemption status for certain devices and now Nokia has officially protested their claims.

The Finnish cell phone giant filed their protestation with the Madras High Court today.
Here’s the issue: Nokia enjoys tax exemption for devices that are exported from the country, being that these exports help to sustain the local economy of India by creating jobs, etc.
However, the Tamil Nadu tax authority claims that these same devices that Nokia are exporting from India are not entirely for export, and that the products are being sold domestically in India. Nokia’s representation had this to say about the matter:

“We contend that this allegation has no basis in reality whatsoever; it could easily be rebuffed by a check of documentation provided to various governmental departments including Customs.”

Do you think that Nokia is guilty of shady business? Or is this a case of misunderstanding, or a tax agency trying to unjustly siphon some funds under the guise of shady business practices?