The National Green Tribunal (NGT) on Thursday imposed a Rs 500 crore penalty on German automaker Volkswagen for using a "cheat device" in its diesel cars to deceive emission tests.
However, the company said that it will challenge the order in the Supreme Court.
On Thursday, the Tribunal ordered the company to deposit the amount within two months.
An NGT-appointed committee had earlier recommended a penalty of Rs 171.34 crore, which the bench enhanced in its Thursday order.
Volkswagen, however, said that it did not violate the Bharat Stage-IV (BS-IV) emission norms and that the results were based on "on-road testings" for which there were no prescribed standards.
The Bharat Stage are government instituted standards to regulate emission of air pollutants from motor vehicles.
The bench headed by NGT Chairperson Justice Adarsh Kumar Goel said, "Sustainable development is the main guiding factor... We are unable to accept the manufacturer's objections to the report."
The bench passed the order on a petition moved by Delhi-based teacher Saloni Ailawadi.
A Volkswagen Group India spokesperson said: "The Volkswagen Group in India reiterates that all cars from the Group are compliant with the emission norms defined in India. The group awaits the copy of the order of the NGT."
"The Volkswagen Group will challenge the order of the Honourable NGT before the Supreme Court."