Mohandas Pai said there must be frequent interaction between the government and the CEOs.

Highlights Mohandas Pai said unnecessary tax litigation is still rampant

He told NDTV Kiran Mazumdar Shaw was asked not to speak on tax harassment

The matter can be addressed by interactions between centre, CEOs, he said

The issue of entrepreneurs facing tax terrorism - raised first by Cafe Coffee Day promoter VG Siddhartha before his death - has now been reinforced by former Infosys director Mohandas Pai and Biocon chief Kiran Mazumdar Shaw. In an interview to NDTV, Mr Pai said "tax terrorism is the biggest threat to the ease of doing business in India" and despite the government's promise to end it, "unnecessary tax litigation is still rampant" which is not allowing the country to achieve its potential.

Mr Pai confirmed to NDTV that Kiran Mazumdar Shaw has been told by "a government official" not to speak about issues such as income tax harassment. Kiran Mazumdar Shaw has also admitted this, The Telegraph reported.

"He (a government official) called up Kiran and Kiran sent me an SMS... and she also told him to go away and I also told him that this is not correct. So this issue is I think the culture among a set of officials, who think that they are born to rule us," he said.

He also recounted an incident, where an official called up his colleague in Infosys and threatened to "shut him down".

"So this is the attitude and this should be condemned and on tax terrorism, the NDA is not able to reverse. (Former Finance Minister Arun) Jaitley promised it and in 2014, it was in the manifesto. But in the last five years there has been a doubling of the total claims to 6 lakh crore so I think we are not seeing a reducing tax terrorism... you have seen in the last budget how the officials did not do their homework and blamed the finance minister," he added.

The matter, he said, could be addressed by frequent interactions between the government and the CEOs.

Before his death last week, VG Siddhartha, in a letter, said he faced a lot of harassment from tax officials in the form of attaching "our shares on two separate occasions to block our Mindtree deal and then taking position of our Coffee Day shares, although revised returns have been filed by us (sic)".

The tax department has denied the allegations, claiming in a statement that "The department has acted as per provisions of the Income Tax Act".