The company, which is about 60 per cent owned by Japan's Bridgestone Corp said it considered it had no case to answer and did not intend to make a provision against profits.

Bridgestone reported in May 1998 that the Australian Taxation Office (ATO) intended issuing assessments covering 1990-1994 in respect to the sale and leaseback transactions entered into by the company in 1990.

``The tax claimed for these years amounts to A$25.8 million, comprising primary tax and penalties,'' it said in a statement on Tuesday, adding directors assumed an amended assessment would also be issued for the 1995 income year.

However Bridgestone said its legal advice still ``strongly supports'' its treatment of the sale and leaseback.

``Accordingly, (Bridgestone) considers it has no case to answer and vigorously rejects the ATO challenge in the strongest possible terms,'' itsaid.

``Bridgestone confirms that, in accordance with its previously adopted position, it is not making a provision against profits in relation to this matter,'' it said.