Tax department to sell Cairn Energy’s attached shares at ‘appropriate time’

 

New Delhi, May 27: The Tax Department will sell at an “appropriate time” the shares owned by British firm Cairn Energy plc which were attached following a Rs 10,247-crore tax demand, a senior tax official said.
The tax department had in January 2014 used a two-year-old retrospective tax law to raise a Rs 10,247-crore demand on alleged capital gains made by Cairn Energy on a decade-old internal reorganisation of India business.
This was followed by attaching the company’s residual 9.8 per cent shares in its erstwhile subsidiary, Cairn India. Cairn India was subsequently merged with its new parent Vedanta Ltd, in which Cairn Energy now holds about 4.95 per cent stake.
These shares continued to be attached for four years but the tax department had earlier this year got them transferred to it.
“We will sell the shares at an appropriate time,” the official of the tax department said.
The tax department had come close to selling the shares in March but aborted the move at the last moment.
Cairn Energy has challenged the retrospective tax demand through an international arbitration, the final outcome of which is expected later this year. The official said the tax department will not wait for arbitration panel hearing to sell the shares.
The Central Board of Direct Taxes (CBDT) had last month in response to a query stated that “there is no legal advice against the sale of the attached shares”.