By Chris Koenig

Business Reporter Oxford University Press has run into more trouble in the Indian courts.

Manzar Khan, managing director of OUP India, has appeared in the Calcutta High Court to apologise unconditionally about a book published by OUP India.

The book, Taking the State to Court, by Hans Dembowski, has been withdrawn from sale.

OUP in Oxford said: "Notices were served in India on the author, publisher and printer of Taking the State to Court, which was critical of the Calcutta High Court. OUP India, as the publisher, has made an unconditional apology and has withdrawn the book from sale."

The debacle follows a further expensive legal setback suffered by the publisher. Earlier this year the Indian Supreme Court ruled that OUP India was not a charity and would have to pay "a substantial sum" in tax on profits made in the sub-continent since 1973.

Here, the venerable publisher - the second largest in the UK - is treated as a charity and enjoys the consequent tax advantages.

Profits are treated as 'net surplus' and ploughed back into Oxford University coffers.

However, the Supreme Court ruled that OUP India was not a charity in that country because it did not carry on any university activities there. Last year, OUP's turn- over hit £324m, up 104 per cent on the previous year. Profit - or net surplus - for the year ending March 2000 was £32.6m.

OUP India is selling Oxford House, its Bombay headquarters, which it has occupied since the 1920s. It is buying offices in Bombay and in Delhi.