Tax dept mulling legal action against Kingfisher

"The action is that, one, we issue them a show cause notice and tell them that this is their liability and this is their dues, and they pay along with interest," S.K. Goel, chairman of the Central Board of Excise and Customs told reporters.

"And then (we) also propose imposition of penalty," Goel said.

The airline is already under immense pressure from lenders to work out a turnaround plan. Kingfisher has never made a profit. Its share of India's domestic airline industry fallen from second to last among the six big carriers after it was forced to ground most of its fleet.