Finance Minister Arun Jaitley is likely to face queries over the tax department's Rs10,247 crore demand notice to UK-based Cairn Energy, when he meets foreign investors in london on Thursday.
Jaitley is likely to explain the Government's stance on the use of retrospective tax law.
Sources in the Finance Ministry maintained that the demand was issued as per "an established process of law" that requires assessments to be closed within two years of the beginning of the scrutiny.
The case came under scrutiny of the I-T department in 2013, following which it served a draft assessment order on Cairn Energy earlier this week.
Revenue Secretary Shaktikanta Das had told the news agency last week that tax demand in all the cases where assessment is pending will be issued as that is the requirement of the law.
The tax demand relates to an alleged Rs24,500 crore worth capital gains it made in 2006 while transferring all its India assets to a new company, Cairn India, and got it listed on the stock exchanges.
Jaitley and other leaders have been saying that the Government was in favour of non-adversarial taxation regime.
In his Budget speech last month, Jaitley had said: "I reiterate what I had said in the last Budget that ordinarily retrospective tax provisions adversely impact the stability and predictability of the taxation regime and resort to such provisions shall be avoided".
Jaitley is traveling to london for the unveiling of a bronze statue of Mahatma Gandhi in Parliament Square, london, on March 14. PTI