Nokia won a court appeal to release its phone-making plant in Chennai, seized by India’s authorities in September over a tax dispute – easing the sale of its Devices & Services unit to Microsoft.

However, as reported by Reuters, the Delhi High Court wants the Finnish company to deposit INR22.50 billion ($367 million) in an escrow account as a condition for lifting the freeze. It was previously reported that Nokia was open to such an action.

The accord means that Nokia can now transfer the factory asset to Microsoft following the agreed sale of its Devices & Services business.

India’s authorities are nonetheless still investigating payments made by Nokia’s Indian subsidiary to its parent company in Finland

Quoting a tax department lawyer, Reuters reports that Nokia may have to pay as much as $3.4 billion, which includes penalties for non-payment of tax and interest.

“[The court appeal ruling] is a very fair and balanced order,” said N.P. Sahni, a lawyer for the tax department, quoted by Reuters. “It substantially protects the interest of the revenue [department] and also enables Nokia to go ahead with its proposed deal with Microsoft.”

Nokia was served with a tax demand for about INR20.8 billion rupees covering five fiscal years starting from 2006-07, according to a notice on the Delhi High Court website.

The Finnish company said it had not been served with any claim beyond the original INR20.8 billion notice.

Aside from this notice, however, there is apparently another investigation into alleged non-payment of similar taxes on international transfers from India to Nokia’s parent (which stretch over a longer period of time).

It is this, say sources, which could drastically ramp up Nokia’s tax bill in India.