TMI Blog1983 (9) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ched against Dr. Teja which ended in conviction and, ultimately, Dr. Teja was brought to India under extradition proceedings where he served the sentence until he was released under the amnesty. In October, 1966, his passport was also impounded. While this was on, the tax authorities started proceedings under the I.T. and the W.T. Acts. Assessments were made ex parte as notices sent to the known address of Dr. Teja outside the country were returned either unserved or refused. As per the assessments, tax to the tune of several crores was due from Dr. Teja. A sum of Rs. 3,72,94,000 awarded as compensation towards the shares held by him in the shipping company consequent on its being nationalised was adjusted. Still a huge amount to the tune of some crores was outstanding. But for some reason or other, the circular issued for impounding Dr. Teja's passport was withdrawn and he was granted fresh passport on May 12, 1977. Dr. Teja once again left the country in July, 1977. There was a controversy both in and out of Parliament and according to the petitioner, the then Prime Minister of India, Sri Morarji Desai, made a statement in Parliament in answer to a query by one of its members tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 a.m. before him. A notice under r. 83 was enclosed to this letter also asking Dr. Teja to attend the office to give evidence either personally or through authorised representative, the non-compliance of which incurs a penalty of Rs. 500 fine as per s. 32 of the C.P.C. It was at this stage this writ petition was filed challenging the notice dated March 8, 1983, issued by the ITO to Pan American Airways not to book any passage or issue an air ticket permitting Dr. Teja to travel by their aircraft to any country outside India without insisting on income-tax clearance certificate as required under s. 230(1) of the I.T. Act, 1961. Mr. P. Ramachandra Reddy, the learned counsel for the petitioner, has raised the following points: (1) The foundation of jurisdiction under s. 230(1) of the Act depends on the formation of an opinion by the ITO that the assessee is not likely to return to India. That opinion must be based on some material. Since there is no such material in the present case, the foundation itself is vitiated. (2) The action is arbitrary and violative of art. 14 as no notice was given to the petitioner before issuing the impugned notice. (3) Imposition of any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons from any place in the territory of India to any place outside India allows any person to whom sub-section (1) applies to travel by such ship or aircraft without first satisfying himself that such person is in possession of certificate as required by that sub-section, he shall be personally liable to pay the whole or any part of the amount of tax, if any, payable by such person as the Income-tax Officer may, having regard to the circumstances of the case, determine. (3) In respect of any sum payable by the owner or charterer of any ship or aircraft under sub-section (2), the owner or charterer, as the case may be, shall be deemed to be an assessee in default for such sum, and such sum shall be recoverable from him in the manner provided in this Chapter as if it were an arrear of tax. (4) The Board may make rules for regulating any matter necessary for, or incidental to, the purpose of carrying out the provisions of this section. " Under sub-s. (1) no person who is not an Indian domicile or even if he is an Indian domicile, if in the opinion of the income-tax authority has no intention of returning to India, shall leave the country unless he obtains certificate to the ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondence a sum of rupees 3 crores odd was realised and adjusted towards the outstanding tax demands, that there was a furore in the Indian Parliament as to how Dr. Teja was allowed to go outside India when tax arrears to the tune of some crores was outstanding, that he left India in 1977 and that he returned only in February, 1983. These facts are sufficient to warrant the formation of an opinion on the part of the income-tax authority that the petitioner is not likely to return to India. We are, therefore, unable to appreciate the argument advanced on behalf of the petitioner that there is no material on the basis of which such opinion could have been formed. Whether a person has intention or not is a matter to be inferred from the circumstances. Such an inference, in the present case, is wholly permissible, in our view. The next submission of Mr. P. Ramachandra Reddy is that the formation of the opinion is not preceded by any notice and the principle of audi alteram partem is violated. He contends that the right to go abroad is fundamental right guaranteed under art. 19 of the Constitution of India. It is also a part of the right of liberty enshrined under art. 21 and any a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om of speech or expression or the right to carry on any profession. But the real question for consideration is whether art. 21 is infringed in any way. The procedure contemplated by art. 21 must undoubtedly satisfy the test of reasonableness. It, therefore, follows that though s. 230(1) does not provide a notice to be given to party before arriving at an opinion so as to make the income-tax authority insist upon a clearance certificate, we are of the view that a notice must be given. The law is now well settled that even in administrative proceedings which involve civil consequences, the doctrine of natural justice is applicable. Therefore, for application of s. 230(1), a notice is necessary, as insistence on a clearance certificate affects, though remotely, the holder of a passport to go abroad. But it is contended by the learned counsel for the Department that if prior notice is given, the very object of s. 230(1) will be stultified as the person concerned may leave the country without complying with the section. We see considerable force in this submission of the learned counsel for the Department. If prior notice is given, there is a possibility of the section becoming unworkab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er s. 230(2). In the present case, the counsel for the Department assured that the ITO will consider any representation that may be made by the petitioner with regard to the requirement of his furnishing an income-tax clearance certificate. It is the case of the petitioner that after his return to India in February, 1983, he wrote a letter to the Prime Minister of India on April 16, 1983, that be plans to be in public life in India and that he has no intention to leave the country and settle down elsewhere and also a letter to the Chairman, Central Board of Direct Taxes, to cancel the tax claims. But unfortunately, the petitioner had never chosen to appear or make any representation before the authority constituted under the I.T. Act either with regard to tax claims or with regard to his stay in India. Even now it is open to the petitioner to file a representation before the concerned ITO and if so filed the same shall be considered by the tax authority within a period of four weeks from the date of receipt of the representation. The next submission of Mr. P. Ramachandra Reddy is that the insistence on a clearance certificate in the case of a person who has no assets at all is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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