The automaker's India unit told the Mumbai High Court the tax dispute puts at risk its investments of $1.5 billion in the country and is detrimental to the foreign investment climate.

Volkswagen has sued the Indian government over a tax demand of $1.4 billion, which it considers "impossibly enormous." The German automaker contends that the demand goes against India's import taxation rules on car parts and may even jeopardize its business.

By Aditya Kalra, Arpan Chaturvedi and Aditi Shah NEW DELHI (Reuters) -Volkswagen has sued Indian authorities to quash an "impossibly enormous" tax demand of $1.4 billion, arguing the ask is contradictory to New Delhi's import taxation rules for car parts and will hamper the company's business plans,