"We have seized one ATR aircraft of the Kingfisher Airlines as the carrier has failed to clear our dues," Mumbai Service Tax Commissioner S K Solanki told PTI.
The beleaguered airline owes around Rs 190 crore (Rs 1.9 billion) to the Service Tax Department, of which Rs 127 crore (Rs 1.27 billion) is under litigation.
The Vijay Mallya-owned carrier today said it has received a notice from the service tax department to which it has already responded.
"Since the aircraft is taken by Kingfisher purely on operating lease basis and the airline is only a lessee of the aircraft (not the owner), it does not feature as an asset in the books of accounts of Kingfisher," the Airline said.
Kingfisher has been grounded since October 1 following a strike by its pilots and engineers over non-payment of salary dues and its flying license has been suspended.
The cash-strapped airline is also facing eviction from Mumbai airport for Rs 22 crore (Rs 220 million) dues towards parking and navigational charges.