Cairn drags India's tax office to court over $3.3bn tax claim

India's largest private-sector oil producer, Cairn India, has moved the Delhi High Court against a $3.3bn (£2.2bn, €3bn) tax demand from authorities related to its listing in 2007, reports said.

The company, owned by London-traded Vedanta Resources and Edinburgh-based Cairn Energy, has filed a writ petition seeking "quashing/setting aside" of the order passed by the Indian tax office.

Shares in Cairn India were trading 0.43% lower at 1.58pm in Mumbai, while the benchmark S&P BSE Sensex share average was down 0.59%.

Cairn Energy and Vedanta were trading 3.27% and 3.26% higher respectively at 9.29am in London.

Cairn India has been pulled up for an alleged failure to deduct withholding tax on capital gains made by its former parent, Cairn Energy, during a reorganisation prior to its market listing.

Vedanta said last month it will file a notice of claim against the Indian government under the UK-India bilateral investment treaty.

Earlier, Cairn Energy, which received a separate tax demand of more than $1.6bn in connection with the same transaction, also filed a notice of dispute under the bilateral investment treaty.

India's finance minister Arun Jaitley has explained that New Delhi is powerless to stop the Cairn Energy case as it was started by the preceding regime, Reuters reported.