Kraft Foods has rejected criticism levelled in a lawsuit lodged in India over its its alleged failure to pay tax in the country on its takeover of Cadbury. 

The public interest suit lodged in New Delhi’s high court contains tough criticism of the international food giant. A copy of the 50-page writ passed to just-food argues Kraft caused “serious prejudice to the public exchequer” and alleges: “The failure to deduct the tax at source and failure to submit the requisite return is deliberate with intent to evade the payment of tax.”

A Kraft spokesperson rejected the criticism, telling just-food the company was “aware of the public interest petition”. However, the spokesperson noted the court had “not granted any reliefs to the petitioner”, suggesting it instead complain to the government. The spokesperson added: “Kraft Foods is fully committed to complying with Indian law.” 

A ministry of finance spokesman told just-food Kraft was now facing an investigation over the issue, although proceedings were at a preliminary stage.

The public interest petition was lodged by social activist Ved Prakash, who claims he is seeking to remedy abuses of Indian takeover laws. The writ was filed through a New Delhi lawyer Gaurang Kanth. The case echoes an appeal by telecoms giant Vodafone against court rulings it owed US$2bn in capital gains taxes over a 2007 acquisition of a India mobile phone company.