K.L. Roy, J.
1. The petitioner is a private limited company carrying on the business of non-scheduled air transport in India. The petitioner had entered into an agreement with the Government of India for air dropping of food in NEFA and other hill areas in Assam. As the said agreement was not renewed after the 30th June, 1967, five out of six airerafts belonging to the petitioner became inoperative from the 1st July 1967. In the circumstances the petitioner intended to dispose of the spare parts and other accessories and even some of the airerafts belonging to it and with that object in view entered into negotiations with various parties. The petitioner applied to the Director General of Civil Aviation on June 21, 1967 for approval of the intended sale of airerafts, stores etc. to parties either in India or abroad. On the 15th July, 1967 the Director General informed the petitioner that he had been advised by the respondent income-tax Officer not to permit any transaction or transfer of airerafts or other materials belonging to the petitioner as considerable amounts were due from the petitioner by way of income-tax and accordingly action on the request of the petitioner was held in abeyance. On the 16th September, 1967 the petitioner asked the respondent Income-tax Officer to allow the petitioner to sell the spare parts to the Royal Nepal Air Lines Corporation and proposed mat the entire proceeds of the sale would be deposited to the credit of the petitioner's income-tax arrears. A similar petition, also dated the 16th September 1967 was addressed to the Central Board of Direct Taxes, New Delhi to the effect that if given the opportunity to sell the spare parts the petitioner would deposit the entire sale proceeds towards its tax arrears. In response to the aforesaid application the petitioner was directed by the Central Board of Revenue to contact the Commissioner of Income-tax to whom necessary instructions had been issued in the matter. Thereafter though several reminders were given to the said Commissioner by the petitioner's Advocate no action was taken with the result that the offer made by Royal Nepal Air Lines Corporation was cancelled. This fact Was notified to the Commissioner by the petitioner's letter dated the 18th November 1967 with a further request for the issue of the necessary income-tax Clearance Certificate in order to enable the petitioner to sell the spare parts to other parties including M/s. S. L. Chakraborty & Co. Thereafter the petitioner received offers from several parties including the Government of Maharashtra, Suppliers Syndicate, S. L. Chakraborty & Co., Indian Air Force and others, for the purchase of its spare parts and other accessories and the petitioner repeatedly applied to the respondent Income-tax Officer to issue the necessary Income-tax Clearance Certificate as otherwise it could not get the approval and sanction of the Director General of Civil Aviation for sale of the aforesaid spare parts and accessories of airerafts. But the aforesaid applications did not yield any response and no such certificate was issued to the petitioner.
2. Sometimes in January 1969 an award was made in favour of the petitioner for Rs. 28,00,000 to be paid by NEFA administration but the petitioner was informed that the administration had been directed to withhold the amount of Rupees 14,55,944.00 from the sum payable under the award and accordingly the aforesaid amount has been deducted and paid to ths Income-tax Department towards the income-tax dues of the petitioner. It is submitted that if the petitioner had any further liabilities to income-tax the Income-tax authority would have required the NEFA administration to deduct such further sum from the amount of the award.
3. Demands for Rs. 8,753/- and Rs. 3,747/- for interest under Sections 201(1-A) and 220 of the Income-tax Act for the assessment year 1963-64 were received from the respondent Income-tax Officer who also required the petitioner to expedite the hypothecation of its airerafts for securing the tax demanded for that year. The aforesaid demand was complied with and in terms of the order of this Court in C. R. Case No. 1541 (w) of 1967 one of the petitioner's airerafts was furnished as security for a sum of Rs. 2,04,000/- by way of hypothecation on the 9th January 1970. Further correspondence ensued between the Income-tax Department and the petitioner wherein the Income-tax Department was insisting on the petitioner disclosing the manner in which the money received from the NEFA administration had been utilised by the Directors of the petitioner Company. Finally on the 2nd March 1970 the petitioner received a letter dated the 25th February, 1970 from the Director General of Civil Aviation informing the petitioner to apply for renewal of its non-schedule permit under Rule 134 of the Airerafts Rules giving the particulars required. The petitioner complied with the said requisition and submitted its application. Thereafter by another letter dated the 9th March, 1970 the Director General, Civil Aviation asked the petitioner to furnish, inter alia, its income-tax clearance certificate. On receipt of the said letter the petitioner informed the said Director that in spite of several demands no income-tax clearance certificate has been issued by the respondent Income-tax Officer, Finally by a letter dated the 10th March, 1970 the respondent Income-tax Officer informed the petitioner that as in his opinion the conditions laid down for issue of tax clearance certificate were notsatisfied in the petitioner's case he declined to issue the same. After demanding justice this application was made and this Rule obtained on the 26th March, 1970.
4. In justification of his refusal to grant the tax clearance certificate the respondent No. 1, in his Affidavit-in-opposition, has stated that very large amounts of tax assessed and penalty levied in respect of the assessment years 1962-63, 1963-64 and 1964-65 are due from the petitioner which could not be enforced because of the orders for stay along with the Rules obtained by the petitioner from this High Court. Similarly, demands in respect of the assessment for the year 1965-66 and the re-assessment for the year 1961-62 had also been stayed by this Court. It is submitted that when these proceedings are finalised a very large sum of money would be found due from the petitioner and as such no clearance certificate could be issued to it. It is further submited that the type of clearance certificate prayed for by the petitioner is not authorised by any statutory provision or by any statutory rules. Such certificates are issued under the Pilot Scheme in respect of the Income-tax verification and clearance certificate which was introduced in 1949 with the object that tax dodgers would not get any Government patronage and for keeping the Income-tax Authority informed of all the Government patronage conferred so that profits arising from such patronage did not escape taxation. In view of the heavy liabilities for taxation of the petitioner, which cannot be enforced due to interim orders granted by this Court, the deponent did not consider it fit and proper to issue any tax clearance certificate to the petitioner particularly as he would be required to certify that the petitioner had been doing everything possible to pay the demand promptly and regularly and to facilitate completion of pending assessment.
5. The only statutory provision for the grant of an income-tax clearance certificate is Section 230 of the Income-tax Act 1961 which provides, inter alia, as follows:
Subject to such exceptions as the Central Government may, by notification in the official gazette specify in this behalf, no person who is not domiciled in India, or who, even if domiciled in India at the time of his departure, has in the opinion of an Income-tax authority, no intention of returning to India shall leave the territory of India by land, sea or air unless he first obtains from such authority as may be appointed by the Central Government in this behalf, a certificate stating that he has no liabilities under this Act, the Excess profits Tax Act, the Business Profits Tax Act, the Income-tax Act 1922, the Wealth Tax Act, the Expenditure Tax Act or the Gift Tax Act or that satisfactory arrangements have been made for the payment of all or any of such taxes which are or may become payable by such person.
6. It is clear that the tax clearancecertificate demanded by the petitioner does not come under the aforesaid section and the petitioner has no statutory right to obtain a tax clearance certificate under the provisions of the Income-tax Act. In 1949 the Income-tax verification and clearance Certificate Pilot Scheme, 1949 was introduced with a view to ensure that the tax dodgers did not get any Government patronage and for keeping the Income-tax authority informed of all the Government patronage conferred so that profits arising from such patronage did not escape taxation. The Pilot Scheme was published in the Office Manual issued by the Directorate of Inspection, Income-tax Department, Government of India. In order to facilitate the effective working of the scheme the controlling sections of the commerce and other Ministries operate in co-ordination with the Income-tax Department as and when necessary. The applicants are required to fill in the form prescribed for import/export licences and to submit it to the proper Income-tax authorities where a register is to be maintained for the receipt and disposal of such applications. Similar procedure is also applicable for granting of tax clearance certificate to contractors who receive payment from Government. In the form of the Income-tax clearance certificate annexed to the said scheme the Income-tax Officer or the proper Income-tax Authority has to certify that in his opinion the applicant has been doing everything possible to pay the tax demand promptly and regularly and to facilitate completion of pending or outstanding proceedings.
7. Dr. Pal appearing in support of the petition submitted that his client was prepared to secure any payment outstanding that might be specified by the respondent Income-tax Officer before asking for the issue of the clearance certificate so that the petitioner may be able to carry on its business by obtaining the necessary licence from the Director General of Civil Aviation. In the absence of such a licence the petitioner would be deprived of its right to carry on its business.
8. Mr. Roy, for the respondents, pointed out that granting of such a certificate as required by the petitioner was merely a matter of Departmental procedure and has no sanction of law behind it. The scheme was evolved to assist Government Departments to keep a check on the monies received by the Contractors under the Government and also on the volume of export and/or import business carried on in India so that the monies realised from these activities may not escape taxation. In granting such a certificate the Income-tax Officer has to certify that the assessee has done everything possible to pay the tax demand promptly and regularly and to facilitate completion of pending and/or outstanding proceedings. In the present case the assessments of the petitioner for a number of years have been kept pending by various orders of stay obtained from this Court with the result that the Department cannot enforce its demands against the petitioner. It would not be reasonable to require the respondent Income-tax Officer to certify that the petitioner had done everything possible to facilitate the completion of its assessment and payment of its tax liabilities.
9. I do not think that the petitioner has been able to make out a case for a writ directing the respondent Income-tax Officer to issue an Income-tax clearance certificate under the aforesaid pilot scheme in order to facilitate its renewal of licence from the Director General of Civil Aviation. This is purely an executive matter and there is no legal obligation on the respondent to issue such a certificate. If it is the contention of the petitioner that the issue of a permit or licence by the Civil Aviation Directorate was being unreasonably denied to it, its remedy is to proceed against the Director General of Civil Aviation who is the proper authority for issuing such a licence and not the respondent Income-tax Officer requiring him to issue a tax clearance certificate. There is no question of enforcement of any fundamental or statutory right against the respondent Income-tax Officer. The petition is misconceived and is accordingly dismissed. The Rule is discharged. There would be no order as to costs.