The Income Tax Department has ordered coercive action against oil and gas exploration company Cairn Energy Plc to recover Rs 10,247 crore of retrospective tax after the British firm lost a case challenging the move before an international arbitration panel, reported PTI on Monday.

In order to recover the dues, the I-T department has ordered taking away $104 million (Rs 6.69 billion) dividend due to it from its remaining stake in the erstwhile subsidiary Cairn India, which is now called Vedanta Ltd.

Cairn Energy will also not receive the Rs 1,500-crore tax refund that is owed to them. The I-T department will now proceed to take over the 9.8% shareholding Cairn Energy had in Cairn India.

In a statement, the oil company confirmed the I-T department’s move, but said it will continue with the international arbitration proceedings against the retrospective tax demand. The company said it has a high level of confidence in its case under the UK-India Bilateral Investment Treaty, and is also seeking damages equal to the value of the its residual shareholding in Cairn India.

The retrospective tax is on short-term capital gains that Cairn had made when it transferred ownership from Cairn UK Holdings to Cairn India in 2006.