1. This is an appeal against the order of acquittal and is before us on refer-ence by our learned brother Mohd. Mirza, J.
2. The short point to be determined is whether the non-payment of tax due for the year ending with 31-12-1957, after the demand notice has been served on the accused, constitutes a contravention of Sub-rule (7) of Rule 14-A of the Central Sates Tax (Andhra Pradesh) Rules 1957 to be held punishable under Rule 16 of the said Rules. It is common ground that the Rule 14-A was introduced in the Rules only in the year 1958 by G. O. Ms. 1805, Revenue dated 30-9-1958.
3. The facts of the case may be shortly stated. The 1st accused K. V. Subba Rao is the managing partner of the Firm, Messrs. Radha-krishna Rice Mill Contractors, of which all the four accused are the partners. They were carrying on business in Dosapadu in the year 1957-58 for which the accounting year ended on 31-12-1957. The Commercial Tax Officer assessed them on a turnover of Rs. 2,59,720 to a tax of Rs. 7,791-60 nP. The assessment proceedings were started in the year 1959. The accused had submitted no return, with the result that the Commercial Tax Officer had to make the assessment on the material available to him to the best of his judgment. He passed the assessment order on 15-1-1960 and sent demand notices to all the accused. The assessment order was served personally only on accused No. 1. The demand notices, however, were sought to be served on each of the partners. The 1st accused was served in person. Service on accused 2 and 3 was effected by affixture of the notices on their respective houses. Accused 4 refused to receive the notice, and it was affixed on his house. All the accused failed to pay the amount within the prescribed period. Proceedings were started under the Revenue Recovery Act, but with great difficulty, a sum of Rs. 1923-02 nP. could be collected and that from only the 1st accused. The balance due still was Rupees 5.868-58 nP. The Deputy Commercial Tax Officer after obtaining due sanction from the Commercial Tax Officer lodged a criminal complaint before the Munsif Magistrate, Gudivada.
4. All the accused denied to have committed any offence. The 1st accused pleaded that he was not a registered dealer. The 3rd and 4th accused denied all connection with the firm and pleaded that they were not partners at all. Accused 2 simply stated that he did not commit any offence. All the accused raised a preliminary ground that the prosecution against them was not tenable in law. This plea found favour with the Munsif-Magistrate who acquitted the accused on the ground that non-payment of tax in the circumstances of the case was not punishable under Rule 16 as Rule 14-A, the contravention of which has been alleged against them, was not in force during the period for which the tax was due.
5. The prosecution carried the matter in appeal to this Court. The question arose whether the prosecution was competent in law. Having regard to the importance of the question on which there is no decided authority, Mohd. Mirza, J., referred the case to a Division Bench. This is how the matter is now before us.
6. We may at the very outset notice certain basic principles which are well settled. The first principle which the trial Court has also adverted to is that a judicial trial cannot reach back and make unlawful an act which was not prescribed when it was committed, for that would be an ex post facto law which is banned by the Constitution, Article 20(1) of the Constitution states:
'No person shall be convicted of any of-fence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.'
Of course, what is prohibited under this provision is conviction under an ex post facto law.
7. This principle, to our mind, is not directly attracted by the facts of the case for the point that is essentially in issue does not turn so much on the concept of ex post facto law as it does on the true interpretation of Rule 14-A. It is obvious that the act complained of, namely non-payment of tax in obedience to the demand notice, was committed not before but after the advent of Rule 14-A, The point in dispute as is manifest from the record and sought to be, argued upon is pivoted on the question whether the non-payment of tax for the period prior to the advent of Rule 14-A is punishable under Rule 16 read with Rule 14-A(7). That must essentially turn on the true interpretation of the terms of Rule 14-A read with Rule 16. Having regard to its clear terms, there does not appear to be much scope for the argument that Rule 14-A is retrospective in operation. The question posed however seems to involve, if at all, only incidentally the point whether that rule is retrospective in effect.
It is well settled that no statute or its pro-vision shall be construed to have a retrospective operation unless such construction appears very clearly in the terms of the Act or arises by necessary and distinct implication. It is also well recognised that the penal provisions have to be strictly construed. Indeed the rule of strict construction requires that the language shall be so construed that no cases shall be held to fall within it which do not fall both within the reasonable meaning of its terms and within the spirit and scope of the enactment. No violence, should be done to its language, especially when the enactment entails penal consequences, to bring people within it But rather care must be taken that no one is brought within it who is not within its express language. Further, as laid down by the Supreme Court in Tolaram Relumal v. State of Bombay, : 1SCR158 if two possible and reasonable constructions can be put upon a penal provision, the Court must lean towards that construction which exempts the subject from penalty. All this goes to show that the penal provision has to be strictly construed, and unless the language employed clearly brings that particular case within its mischief so as to be punishable in law, it cannot be held to be an offence at all.
8. Having regard to these well recognised canons of construction, we turn to the provisions of Rule 14-A, the breach of which is made punishable under Rule 16. The crucial provision in Sub-rule (7) of Rule 14-A which reads thus:
'If on final assessment made under Sub-rule (5) or (6) any tax is found to be due from the dealer after deducting the tax or taxes paid by him towards the provisional assessment, the assessing authority shall serve on the dealer a notice in Form C. S. T. -- VIII and the dealer shall pay the sum demanded in the notice within such time and in such manner as specified therein. If however any refund of tax is found to be due to the dealer, the assessing authority shall serve on him a notice in Form C. S. T. -- IX'.
This provision has to be read with Rule 16 which is in the following terms:
'Whoever commits any breach of the provisions of Rules 4, 7(1), 9, 9-A, 10, 10-A, 11, 12, 13, 14-A or 15 shall on conviction by a Magistrate of the first class be punishable with fine which may extend to five hundred rupees and when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues.'
The combined effect of the above two provisions is that should there be breach of Rule 14-A(7) it will be punishable with fine on conviction by a competent magistrate. Whether there has been such breach has to he determined on the language of Rule 14-A(7). Non-payment of lax by the dealer in the manner prescribed in the demand notice served on him indeed constitutes a breach punishable in law provided of course the said tax is found due on final assessment made under either Sub-rule (5) or (6), as the case may be, of Rule 14-A. Sub-rule (7) is not a sell-contained provision and has to be necessarily read with Sub-rule (5) or (6) as the case warrants. Again when we look to Sub-rule (5) or (6) both of them in turn refer to Sub-rules (1) and (2) of Rule 14-A. The conclusion of breach punishable in Jaw has therefore to be reached only on consideration of all the said sub-rules. Sub-rule (6) referred to in Sub-rule (7) which is relevant for our purposes reads thus:
'If no return or returns have been submitted by the dealer as required by Sub-rules (1) and (2) or if any return or returns submitted by him appear to the assessing authority to be incorrect or incomplete the assessing authority shall after making such enquiry as he considers necessary and after giving the dealer an opportunity of proving the correctness and completeness of the return or returns submitted by him determine the turnover to the best of his judgment and finally assess in a single order the tax or taxes payable under the Act.'
The assessment contemplated by this sub-rule which has to be made in due compliance with the procedure laid down therein is of necessity confined to the period for which the returns are to be submitted under Sub-rules (1) and (2). Sub-rule (2) need not come up for consideration as admittedly it has no bearing on the instant case. Sub-rule (1) so far as is material for our purpose reads thus:
'(a) Every dealer registered under Section 7 of the Act and every dealer liable to pay tax under the Act shall submit so as to reach the assessing authority on or before the 25th of every month a return in Form C. S. T.--VI showing the total and net turnover of his transactions including those in the course of inter-stale trade or commerce and in the course of export of the goods out of the territory of India during the preceding month and the amount or amounts collect-ea by way of tax. The return shall be accompanied by a receipt from a Government treasury or a crossed cheque in favour of the assessing authority for the full amount of the tax payable for the month to which the return relates.
Provided that a dealer who is not liable to pay tax under the Andhra Pradesh General Salas Tax Act, 1957 shall submit return for each quar-ter as shown below instead of each month.Quarter ending Due date for submissionof the return.30th June. On or before the 25th July.30th September. On or before the 25th October.31st December. On or before the 25th January31st March. On or before the 16th April. (b) * * * *'
This provision casts a duty on a dealer to submit his return in a prescribed form on or before a specified date to the authority concerned. The returns must relate to total and not turnover of his transactions as also the amount or amounts collected by way of tax during the preceding month or the previous quarter as the case may be. The provision is obviously prospective. On the tenor, purport and language of this provision the conclusion is irresistible that the returns which are to be submitted under this provision which came into force on 30-9-58 cannot relate to any period in the year ending with 30-12-1957. The returns, as enjoined by the provision shall relate to previous month or the previous quarter as the case may be. After the introduction of this provision, the first statement ought to be filed only on the 25th October in case of monthly returns or 25th of January in case of quarterly returns. In this premises, the period covered by Rule 14-A does not stretch beyond the month of September, 1958.
9. Thus on a proper construction of the relevant provisions it is manifest that the breach in relation to Rule 14-A(7) made punishable by Rule 16 consists in non-compliance with the demand notice served on the accused for payment of tax due under final assessment made under sub-rule (5) or (6) of Rule 14-A for the period covered by Sub-rules (1) and (2) of the said Rule. Rule 16 then will not be attracted and non-compliance with the demand notice will not be punishable thereunder if all the essential requirements of Sub-rule (7) are not fulfilled. It must always be remembered that Sub-rule (7) by necessary implication attracts the provisions of Sub-rules (1) and (2), (5) and (6). In fact all these Sub-rules put together make it a complete whole.
So then the conclusion whether there has been breach of Rule 14-A(7) punishable under Rule 16 must necessarily be reached on the cumulative effect of all the said provisions. Indisputably Rule 14-A by reference to them, whether directly or indirectly, has imported in itself all the said provisions. It this approach is correct, as it must necessarily be on the clear language and intendment of the crucial provisions, the conclusion is irresistible that since the lax due relates to a period not falling within the ambit of Sub-rules (1) and (2) of Rule 14-A, non-payment thereof in due compliance with the demand notice is not punishable under Rule 16 read with Rule 14-A(7). It is but elementary that if any of the essential elements, which make an offence, is missing, the offence will not be made out.
It is nevertheless, argued that Rule 14(7) should be interpreted without any reference to Sub-rule (5) or (6), that its various parts should be construed disjunctively and in isolation, that the clause 'the dealer shall pay the sum demanded in the notice' should alone remain foremost in mind and the breach thereof by itself must be held punishable under Rule 16. It is difficult to comprehend how a provision which is not unqualified could be construed bereft of all its qualifications. The provision by making pointed reference to Sub-rules (5) and (6) in fact imports into itself the said Sub-rules with all their implications. In sooth reference to them is made only for brevity's sake. What is intended thereby is that the said sub-rules together with other sub-rules to which reference is given therein cannot be separated from Sub-rule (7) while giving full effect thereto.
Further, how could there be disjunction when the various parts of the provision spell out conjunction at every step with each other? Above all, the principle of construction as advocated is opposed to all acknowledged canons of interpretation of statutes and provisions. In Maxwell on the Interpretation of Statutes, at pages 27 and 28 of the 12th Edition, the prin-ciple is laid down thus:
'.....it is an elementary rule that construction is to be made of all the parts together and not of one part only by itself.....Such a survey is often indispensable even when the words are the plainest; for the true meaning of any passage is that which (being permissible) best harmonises with the subject and with every other passage of the statute.'
It is plain therefore that the rule of construction wan ants and the language of the provision necessitates that Sub-rule (7) should he construed together with other provisions to which it refers to specifically or by necessary implication and further its various parts should be construed together and not in isolation. When a contravention leading to penal consequences is alleged, it becomes all the more necessary to strictly construe the entire provision as it is, to ascertain whether there has been in fact any contravention punishable in law. We need not state once again at this stage the principles of construction of penal provisions which are well settled and which we have, set out in the earlier part of this judgment.
10. It is then argued that by pronouncing on the scope of Sub-rules (1) and (2) and their connection with Sub-rules (5), (6) and (7) a criminal court, either in fact or in effect shall be pronouncing on the validity of the final assessment itself, even though that is not within its province or permitted domain.
No doubt a criminal court has no jurisdiction to go into the question as to the process of assessment and sit in judgment on the assessment made by competent authority. That is exclusively the duty of the hierarchy of officers appointed under the statute. But there is no reason why it criminal court should not be at liberty to construe the statutory provisions in order to ascertain the guilt or the innocence of the accused which is its appointed province. Evidently, the function and the duty of the criminal court is different from that of the assessing authority. Each of them is independent of the other in their respective field of operation. Concerned as it is essentially with the question of guilt or innocence of the accused, the criminal court has to determine whether the contravention complained of constitutes an offence which, is punishable under Rule 16. In this endeavour, if necessary, it is bound to construe the provisions bearing on the question. It shall consider the provision having regard to its various component parts to reach its conclusion warranted by law. It has to necessarily find out whether having regard to the tenor, purport and language of the concerned provisions, the act complained of does constitute an offence punishable by law. It cannot be swayed away from its duty by the consideration that its observations and conclusions while construing the provisions in the manner it should, are likely or would tend to suggest that there is infirmity in the process of assessment itself as finalised by a competent authority. That is none of its considerations. Nor its decision is open to attack on that basis. Whether a breach punishable under Rule 16 is made out or not is its only consideration. The apprehension that the assessment would be affected by the decision of the criminal court is therefore wholly unfounded.
In our judgment, the trial Court has not committed any error in acquitting the accused on the ground that they committed no criminal offence by non-payment of the tax which can be recovered from them in due process of law.
11. As already noticed, on a true interpretation of Rule 14-A, there is little doubt that Sub-rule (7) for purposes of Rule 16, which makes the breach punishable in law, cannot be attracted unless the breach complained of is in relation to a tax due from the month the Rule 14-A came into force or subsequent thereto. Evidently, the assessment in question relates to the period even prior to the year 1958 and hence is clearly out of the scope of Rule 14-A for purposes of Rule 16. It is therefore not an offence and consequently the prosecution for the same was not competent.
12. We accordingly uphold the order of acquittal passed by the Munsif Magistrate, Gudivada.
13. In the result, the appeal fails and ishereby dismissed.