Govinda Bhat, J. - (1.)IN this writ petition preferred under article 226 of the Constitution of INdia, the petitioner has prayed for the issue of a writ of mandamus or a direction in the nature of a writ of mandamus directing the INcome-tax Officer, Circle I, Bangalore-respondent-to issue to the petitioner a tax clearance certificate under section 230(1) of the INcome-tax Act, 1961.
(2.)THE petitioner is the widow of J. Sattler, who died on June 8, 1963. She applied for a tax clearance certificate in order to enable to leave this country and go to New Zealand where her daughter is residing. THE respondent by his order dated May 23, 1969, has refused to grant the tax clearance certificate on the ground that a sum of Rs. 48,715 is recoverable from the petitioner as legal representative of her deceased husband and that, unless the said amount of tax with interest is paid, the petitioner is not entitled to a tax clearance certificate. THE petitioner's contention is that no tax is recoverable from the estate of Mr. Sattler.
The petitioner's husband, Mr. Sattler, and one Mr. K.S. Gandhi were partners of an unregistered firm named "Inka Corporation", since about the year 1947. In Insolvency No. 23 of 1953 on the file of the Bombay High Court, the said "Inka Corporation" and its partners were adjudged by an order dated February 17, 1953, as insolvents and the assets of the said firm and of the individual partners were ordered to vest in the official assignee of the Bombay High Court. On January 21, 1955, the Bombay High Court made an order discharging Mr. Sattler. In respect of the assessment years 1948-49 to 1952-53, the Income-tax Officer, Bombay, assessed the firm "Inka Corporation" to income-tax aggregating to Rs. 48,715. The assessment orders were made on the firm of "Inka Corporation". Notice of the assessment was given to Mr. K. S. Gandhi but not to Mr. Sattler. Sattler owned a one-half share in a house at No. 5, Ulsoor Road, Bangalore, which had been mortgaged with the Indian Bank, Bangalore. The official assignee did not take possession of the house in the insolvency proceedings. The petitioner discharged the mortgage loan and redeemed the property devolved on the petitioner and her daughter as heirs. The case of the respondent is that, since the petitioner as heir to her deceased husband has succeeded to the deceased's property, she is liable to discharge the tax liability of her deceased husband. The contention of the petitioner is that on the insolvency adjudication of Mr. Sattler and K.S. Gandhi, the firm of "Inka Corporation" became dissolved with effect from February 17, 1953, and after dissolution of the firm, the firm as such could not have been assessed and the proper procedure was to assess the partners jointly and severally and then issue demand notices under section 29 of the Indian Income-tax Act, 1922 (hereinafter called "the Act"), to the quondam partners and that, in the absence of any assessment made on Mr. Sattler, the petitioner as his legal representative is not liable to discharge the tax assessed on the dissolved firm. The petitioner had preferred Writ Petition No. 1747 of 1963 in this court when on the basis of a certificate issued by the Income-tax Officer, under section 46 of the Act, recovery proceedings were initiated against the petitioner. When the said writ petition came up for hearing the petitioner and the Income-tax Officer filed a joint memo. This court on September 10, 1965, quashed the recovery proceedings reserving liberty to the Income-tax Officer to issue an appropriate demand notice and, thereafter, to take recovery proceedings in accordance with law. Liberty was also reserved to the petitioner to raise such contentions that are open to her in law. After the disposal of the said writ petition, a notice of demand dated June 16, 1965, was served on the petitioner on November 9, 1965, but no recovery proceedings were started before March 31, 1967. Therefore recovery proceedings on the basis of the demand notice issued to the petitioner is barred by time under section 231 of the Income-tax Act, 1961.

On the arguments presented before us, the question for decision is whether the petitioner has no tax liabilities so as to entitle her for tax clearance certificate under section 230 of the Income-tax Act, 1961.

(3.)THE firm of "Inka Corporation" was dissolved on the adjudication made in the insolvency proceedings in the High Court of Bombay on February 17, 1953. THE income-tax assessment orders were made on March 31, 1956, on the firm of "Inka Corporation" and notices of demand were served on one of the quondam partners, Mr. K.S. Gandhi. THE notices of demand were not served on the petitioner's husband, Mr. Sattler.
Section 44 of the Act, as it stood before its amendment in 1958, provided that where any business carried on by a firm has been discontinued, every partner of such a firm who was at the time of the discontinuance or dissolution a partner of such firm shall, in respect of the income, profits and gains of the firm, be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable. By the amendment made in 1958 and also under the Income-tax Act, 1961, assessment can be made on a dissolved firm but in the instant case we are concerned with section 44 of the Act prior to its amendment.

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