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PETITIONER: STATE OF TAMIL NADU

       Vs.

RESPONDENT: KODAIANAL MOTOR UNION (P) LTD.

DATE OF JUDGMENT01/05/1986

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) PATHAK, R.S.

CITATION:  1986 AIR 1973            1986 SCR  (2) 927  1986 SCC  (3)  91        1986 SCALE  (1)922  CITATOR INFO :  RF         1988 SC1737  (48)

ACT:      Central Sales  Tax Act,  1956 - s. 10A - Penalty - Levy of - Quantum of Penalty - Determination of.      Interpretation  of  Statutes  -  Legislative  intent  - Ascertainment of - Duty of court.

HEADNOTE:      The assessee  had purchased  motor spare  parts on  the basis of  ’C’ form  certificates issued  to them  under  the Central Sales  Tax Act,  1956,  for  sale,  but  instead  of selling, the  assessees used them for their own consumption. The Revenue  proceeded on  the basis  that since  the  goods purchased had  not been  used for  the purpose  specified in s.8(3)(b) and  as recorded in the ’C’ form certificates, the assessees had  committed offences  under s. 10(d) of the Act and therefore, were liable to pay penalty as well. This view was affirmed by all the authorities including the Tribunal.      On the  question of  quantum of  penalty, the  Tribunal held that  the penalty  leviable under s. 10A should be one- and-a-half times  the concessional  rate of tax and not one- and-a-half the  tax which would have been leviable if no ’C’ form certificate had been produced.      The  Revenue  challenged  before  the  High  Court  the correctness of  the view  taken by  the Tribunal.  The  High Court following  its earlier decision in the State of Madras v. Prem  Industrial Corporation (24 S.T.C. 507) approved the view taken by the Tribunal.      Allowing the Appeals of the Revenue to this Court, ^      HELD: 1. Sub-section (1) of s. 10A of the Central Sales Tax Act,  1956 makes  it clear that penalty should be worked out 928 at the  rate of  tax which  would have  been levied  if  the offence had  not been committed. In other words the question is what  tax would  have been  levied under  the Act  if the offence had  not been committed. The assessee would not have committed any  offence  only  if  he  had  carried  out  the undertaking given by it in its declaration in form ’C’ or if he  purchased  the  goods  without  giving  any  declaration

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thereby incurring  liability to  pay normal  rate of  tax as contemplated by  sub-s. (2) of s.8. One who commits defaults cannot be  said to have carried out the undertaking given by him. [939 C-E]      2. The use of the expression "if" in the phrase "if the offence had  not been  committed" was  meant to  indicate  a condition, the condition being that at the time of assessing the penalty,  that situation  should be  visualised  wherein there was  no  scope  of  committing  any  offence.  Such  a situation could  arise only  if the tax liability fell under sub-s. (2)  of s.8  of the  Act. The scheme of s.8 indicated the concessional  rates contemplated  by sub-s.  (1) thereof would be  available only with reference to those goods which are covered  by the  declarations in form ’C’. The moment it is found that in respect of particular quantity of goods the undertaking given  by the  assessee in  form ’C’ declaration has not been carried out, the goods were presumed to be such in respect  of which no undertaking was existing. Such goods would be liable to normal tax contemplated under sub-section (2) of s.8. Therefore, the penalty should be worked out only on the basis of the normal rates prescribed under sub-s. (2) of s.8. [939 F-H; 940 A-B]      M.Pais &  Sons and  Another v.  The State of Mysore, 17 S.T.C. 161,  Bisra  Limestone  Company  Ltd.  v.  Sales  Tax Officer, Rourkela  Circle, Uditnagar,  and Others, 27 S.T.C. 531, The  Assessing Authority  and another  v.  Jammu  Metal Rolling  Mills,   [1971]  Tax   Law  Report  1861,  Kottayam Electricals Private  Limited v.  The  State  of  Kerala,  32 S.T.C. 535  and The  Gaekwar Mills  Ltd.  v.  The  State  of Gujarat, 37 S.T.C. 129, approved.      The State of Madras v. Prem Industrial Corporation, 24, S.T.C. 507  and Deputy  Commissioner  of  Commercial  taxes, Madurai Division,  Madurai v. Kodaikanal Motor Union Private Limited, 31 S.T.C. 1, overruled.      3. Section 10A was introduced for imposition of penalty in lieu of prosecution, that is to visit the person guilty 929 with certain  penalty in  place of prosecution. He cannot be placed in a better position than one who would have complied with the provisions of the Act. [940 B-C]      4. The Court must always seek to find out the intention of the  legislature. This can be done from the language used in the  statute. But  the court  need not  always  cling  to literalness and  should seek to endeavour to avoid an unjust or absurd  result. To  make sense out of an unhappily worded provision, where purpose is apparent the judicial eye ’some’ voilence to  language is permissible. The purpose of the Act and the  object of  a particular  section has to be borne in mind. [938 F-H]      Seaford Court  Estates v.  Asher, [1949] 2 All E.R. 155 at 164,  K.P. Varghese  v. Income-tax Officer, Ernakulam and another, 131  I.T.R. 597  at 604  to 606  and Luke v. Inland Revenue Commissioners, 54 I.T.R. 692, relied upon.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION : Civil Appeal Nos. 1121- 1124 (NT) of 1974.      From the  Judgment and  Order dated  4th April, 1972 of the Madras High Court in T.C. Nos. 158 to 161 of 1966.      S. Padmanabhan,  A.V. Rangam  and V.C.  Nagaraj for the appellant.      Nemo for the Respondent.      The Judgment of the Court was delivered by

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    SABYASACHI MUKHARJI,  J. These  appeals by  certificate arise from  the decision  of the Madras High Court dated 4th April, 1972  in Tax Cases Nos. 158-161 of 1966. These are in respect of assessment under Central Sales Tax Act, 1956. The assessees in  the four tax cases were assessed under Central Sales Tax  Act, 1956  (hereinafter called  the  ’Act’).  The assessment years  involved are  1958-59 to  1961-62. It  was found that  the assessees had purchased motor spare parts on the basis  of the ’C’ form certificates issued to them under the provisions  of the  said Act  for sale,  but instead  of selling those,  the assessees  had used  those for their own consumption. 930 The revenue  proceeded on  the basis  that since  the  goods purchased had  not been  used for  the purposes specified in section 8(3)(b)  of the  Act and as recorded in the ’C’ form certificates, the  assessees had  committed  offences  under section 10(d) of the Act inasmuch as they had used the goods purchased by  them on  the basis of ’C’ form certificate for the purpose other than the one mentioned in the certificates and therefore  were liable  to pay  penalty as well. All the authorities  including  the  Tribunal  had  found  that  the assessees had  actually committed the offences under section 10(d) of  the Act  in using the goods for the purposes other than the  one mentioned  in ’C’  form certificates.  Being a finding of  fact, the High Court proceeded on the basis that the assessees  had committed  the offence. The question that was posed  before the High Court was what was the quantum of penalty that had to be levied under section 10-A of the Act. Section 10-A of the Act deal with penalties. Section 10-A is a  provision   for  imposition   of  penalty   in  lieu   of prosectuion. This  section was  initially added by section 8 of the  Amendment Act  31  of  1958  with  effect  from  1st October,  1958.   This   section   has   undergone   several amendments. On  9th June, 1969 with retrospective effect the section was  amended. The  section was  again  amended  with effect from  1st April, 1973. Sub-section (1) of section 10A which is  material for  our present  purpose at the relevant time was as follows :           "10A. (1) If any person purchasing goods is guilty           of an  offence under  clause (b)  or clause (c) or           clause  (d)  of  section  10,  the  authority  who           granted  to  him,  or  as  the  case  may  be,  is           competent  to   grant  to  him  a  certificate  of           registration under this Act may after giving him a           reasonable opportunity of being heard, by order in           writing, impose  upon him  by way of penalty a sum           not exceeding  one-and-a-half times  the tax which           would have  been levied  under this Act in respect           of the  sale to  him of  the goods, if the offence           had not been committed;           Provided that  no prosecution for an offence under           section 10  shall be  instituted in respect of the           same facts  on which  a penalty  has been  imposed           under this section." 931      Sub-section (1)  of section  10A provided that if any A person purchasing goods is guilty of an offence under clause (b) or clause (c) or clause (d) of section 10, the authority who granted  to him  or, as the case may be, is competent to grant to  him a  certificate of  registration under the Act, may, after  giving him  a reasonable  opportunity  of  being heard, by  an order  in writing,  impose upon  him by way of penalty sum not exceeding one-and-a-half times the tax which would have  been levied  at the  relevant time in respect of

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sale of  goods if  the offence  had not  been committed. The only question  that was  under consideration was the quantum of penalty  that had  to be  levied under section 10A of the Act.      It may  be mentioned that section 10 imposes penalty if any person, inter alia, under clause (d) of section 10 after purchasing any goods for the purpose specified in clause (b) or clause (c) or clause (d) of sub-section (3) of section 8, fails without reasonable excuse to make use of the goods for the purposes  mentioned in the certificates. Section 8 deals with the  rates of tax on sales in the course of inter-State trade or  commerce. it  stipulates that every dealer, who in the course  of inter-State  trade or  commerce, inter  alia, sells to a registered dealer other than the Government goods of the  description referred  to in sub-section (3) shall be liable to  pay tax  under the  Act, which  shall be four per cent now  and at  the relevant  time prior to 1975 was three per cent of the turnover. Sub-section (3) of section 8 deals with the  goods referred to in clause (b) of sub-section (1) of section 8.      The Tribunal  as mentioned  hereinbefore  accepted  the contention that the penalty liable under section 10A in this case should be one-and-a-half times the concessional rate of tax and  not one-and-a  half times  the tax which would have been leviable  if no ’C’ form certificate had been produced. The Revenue challenged before the High Court the correctness of the view taken by the Tribunal.      The High Court followed the decision of the Madras High Court in the State of Madras v. Prem Industrial Corporation, 24 S.T.C. 507. Another view was expressed by the Mysore High Court in  M. Pais & Sons and another v. The State of Mysore, 17 S.T.C.  161 and  the Orissa High Court in Bisra Limestone Company  Ltd.   v.  Sales   Tax  Officer,  Rourkela  Circle, uditnagar, &  Ors., 27  S.T.C. 531 took a different view. It also appears H 932 that in  Bisra Limestone  Company Ltd.,  the decision of the Madras High  Court in The State of Madras v. Prem Industrial corporation, (supra)  was specifically  referred to  but was not accepted as laying down the correct principle.      In the  impugned judgment, the Madras High Court was of the view that these decisions apart from the decision of the Madras High  Court in The State of Madras v. Prem Industrial Corporation had  proceeded on  the basis that if the offence had been  committed under  section 10A,  it should  be taken that the  concerned assessee  never applied for and obtained any valid  certificate in form ’C’ which would have entitled him to  have the  beneficial rate  of tax and that therefore the penalty  leviable under  section 10A could only be 1-1/2 times the  normal tax  i.e. 1-1/2  times the  tax  that  the dealer would have been liable to pay if he had not taken ’C’ form certificate. The Madras High Court was on the view that if the  principle on  which the learned judges of the Mysore and Orissa  High Courts in the above-mentioned decisions had proceeded was  correct, then  there was  no question  of any offence being  committed by  the assessee  in not taking ’C’ form certificate,  though the  assessee might be thrown open to a  larger and normal rate of tax in place of concessional rate of  tax. The  Madras High  Court in  the judgment under appeal was  unable to  accept the principle laid down by the two decisions  of the  Mysore High Court and the Orissa High Court  respectively.   In  that  view  of  the  matter,  the challenge of  the Revenue  to the  decision of  the Tribunal failed.      Aggrieved by  the impugned  decision and in view of the

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conflict of  decisions between  different High  Courts,  the Revenue has come up in these appeals.      In M.  Pais &  Sons &  Anr. v.  The  State  of  Mysore, (supra), Hegde,  J. as  the learned  judge then  was in  the Mysore High  Court held  that as  the goods purchased by the petitioner in  that case  were not  covered by any valid ’C’ form, sales  tax was  leviable at  7 per cent, and therefore the penalty  that  was  leviable  10-1/2  per  cent  of  the turnover. The  petitioner, in another case, had manufactured soap  and  he  had  included  the  following  goods  in  his application for certificate of registration under section 8: coconut  oil,   perfumes,  silicate,  caustic  soda,  nails, colours, strappings, papers and rosin. 933 During the relevant year the petitioner purchased maroti oil A and  groundnut oil  by using  some of  the ’C’  forms. The question was  whether he  was guilty  of the  offence  under section 10(b)  of the Act. The last contention urged in that case as  appears from  page 169  of the report was that on a true interpretation  of section  10A it  was clear  that the assessee should  have been  levied penalty only at 1-1/2 per cent of  the disputed turnover and not at the rate of 10-1/2 per  cent  as  was  done  by  the  authorities  below.  This contention did  not appears to the High Court to be correct. All the  sales of  goods validly  covered by  ’C’ forms were liable to  be taxed  at 1  per cent of the turnover. Such of the goods  which were  not validly covered by ’C’ forms were liable to  be taxed  at 7  per cent  of  the  turnover.  The penalty provided  by section  10A was  1-1/2 times  the  tax leviable. It  was found  in that  case that  the goods  with which the  Court was concerned were not covered by any valid ’C’ forms  and, therefore, sales tax was leviable on them at 7 per cent of the turnover. If that was so, then the penalty on that  turnover was  leviable at  10-1/2 per  cent of  the turnover.      The Madras  High Court  in The  State of Madras v. Prem Industrial Corporation,  (supra) had  occasion  to  consider this question  and it was upon this decision that the Madras High Court in the judgment under appeal relied. There it was held that  for an  offence committed  within  the  scope  of section 10(b)  of the  Act by  the misuse  of ’C’ forms, the penalty at  one and a half times should be calculated on the concessional rate  of tax that would have been applicable of the offence  had not  been committed,  that is,  if the  ’C’ forms had  been properly  used, and  not on the basis OF the rate for  sales not  covered by the ’C’ forms. The attention of the  Madras High  Court was  drawn to the judgment of the Mysore High Court in the case of M. Pai & Sons. v. The State of Mysore,  (supra). The  Madras High  Court, however,  felt that the  decision did  not take into account the concluding words ’if  the offence  had not  been committed’  In section 10A. In  that case before the Madras High Court, the revenue sought to  revise  and  order  of  the  Sales-tax  Appellate Tribunal by  which it  modified the  penalty imposed. It was not in  controversy in  that case  as in  the instant  cases before us  that ’C’  forms had  been misused  and thereby an offence was  committed within  the scope of section 10(b) of the Act.  The department  had levied  penalty at  10-1/2 per cent on the view that in the circumstances, the 934 concessional rate  would  not  be  available  and  that  the assessee would  be liable to tax at 7 per cent under section 8(2) of the Act. The Tribunal reduced the penalty to one and a half  times the  tax, as,  in its opinion, for purposes of levying penalty,  the rate  of tax  should be  taken as that

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which would have been applicable if the offence had not been committed.  The   Madras  High  Court  accepted  this  view. According  to   the  Madras  High  Court,  the  department’s contention did  not give  effect to  the concluding words of section 10A  ’if the  offence had  not been  committed’. The High Court  was of  the view  that  the  offence  under  the provision was  that a  person  being  a  registered  dealer, falsely represented  when purchasing any class of goods that goods of  such class  were covered  by  his  certificate  of registration.  The  words  ’if  the  offence  had  not  been committed’ clearly  pointed to  the result  that the tax for purposes of  assessing one  and a half times thereof was not that which  would have been levied on the basis that the ’C’ forms had  not been  complied with or had been misused, but, as n  if they had been used in a proper way. It is this view which found favour in the impugned judgment before us.      The question  again cropped  up before  the Orissa High Court in  Bisra Limestone Company Ltd. v. Sales Tax Officer, (supra). There  the Orissa  High Court  was of the view that the question of penalty would arise only when the goods were not  mentioned   In  the  certificate  of  registration  and purchase of the same was made on a false representation made by the  purchasing dealer  that these  were so mentioned. If the normal  rate had been paid for the goods, without making any false  representation, no  offence under  section  10(b) would be  committed. It  was only  to such  cases  that  the expression "if  the offence  had  not  been  committed"  had application and  therefore the penalty payable under section 10A would  be one  and a  half times the normal rate and not the concessional  rate. Based  on the  language  of  section 10A(1), a  contention was  raised before the High Court that penalty should bot exceed one-and-a-half times the tax which would have been levied under this act in respect of the sale to him of the goods, if the offence had not been committed’. According to  the contention  if the goods were purchased on concessional rate  on false  representation that  these were covered under  the registration,  the penalty  that  imposed should not exceed one and a 935 half times  the concessional  rate and  not the normal rate. The contention  was held  not to  be sound.  The Orissa High Court was  of the  view that  if the  goods mentioned in the certificate of  registration  and  the  goods  purchased  at concessional rate  as purchasing dealer committed no offence under section  10(b) of  the Act  the question  of  imposing penalty did  not arise.  The question of penalty would arise only when  goods were  not mentioned  in the  certificate of registration and  purchase of  the same  is made  on a false representation by  the purchasing  dealer that  they were so mentioned. If  the normal  rate had  been paid for the goods without making  any false  representation, no  offence under section 10(b)  would be committed. It was only to such cases that the  expression ’if the offence had not been committed’ had application  and the  penalty payable would be one and a half times the normal rate.      The question  was again considered by the Full Bench of Jammu &  Kashmir High  Court in  the case  of The  assessing Authority and  another v.  Jammu Metal Rolling Mills, [1971] Tax Law  Report 1861. There Jaswant Singh, J. as the learned judge then  was of  the Jammu  &  Kashmir  High  Court,  had occasion to  consider the  concluding words  of section  10A i.e. ’impose  upon him by way of penalty a sum not exceeding one and  a half  times the  tax which would have been levied under this Act in respect of the sale to him of the goods if the offence  had not  been committed’ and it was interpreted

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as not  to mean that the penalty should be calculated at one and a  half times the concessional rate of tax. All that the aforesaid words,  according to  the J  & K High Court, meant was that  the person  committing the  offence  specified  in section 10(d)  would be liable to penalty which would extend to one  and a  half times  the tax  payable by  a person who purchased goods  for the  purpose covered by the certificate of registration  or the penalty would be upto one and a half times the  tax which an honest dealer would have normally to pay while  purchasing the  goods of  similar description for similar use.  Any other interpretation according to the said High Court,  would have  the effect  of putting a premium on the misuse  of certificate  of registration  by unscrupulous dealers. The  said High  Court relied on the observations of the Orissa  High Court  in Bisra Limestone Co. Ltd., (supra) and  also   the   Mysore   High   Court’s   view   mentioned hereinbefore. The  J & K High Court was unable to agree with the views of the Madras High Court in The State of Madras v. Prem Industrial Corporation (supra). 936      The question  again came to be considered by the Kerala High Court  in the  case  of  Kottayam  Electricals  Private Limited v.  The State  of Kerala,  32 S.T.C.  535. mere  the submission was  that the  courts should  construe the phrase ’if the  offence had  not been  committed’ to  mean ’if  the assessee had  not misused  or  misapplied  the  goods’.  The argument  was   that  if  the  goods  were  not  misused  or misapplied the tax payable would be at the concessional rate of 3  per cent under section 8(1)(b) of the Act and that the maximum penalty  that could be imposed could only be one and a half  times the  tax calculated  at  3  per  cent  on  the turnover in respect of which the offence had been committed. After discussing  the  contentions  and  acknowledging  that section 10A was not happily worded, the High Court felt that it was unable to accept the view of the Madras High Court in State of Madras v. Prem Industrial Corporation, (supra). The High Court  was of the opinion that if the court interpreted the section  to mean  that such  a person  need pay  penalty calculated only  at the  rate of  one-and-a-half  times  the ’concessional rate’,  it would  lead to absurd consequences. It accepted  the views  of the  Orissa as well as the Mysore High Courts mentioned hereinbefore.      The Gujarat  High Court  had occasion  to consider this question again  in the case of The Gaekwar Mills Ltd. v. The State of  Gujarat, 37  S.T.C. 129. me Gujarat High Court was of the  view that  the penalty  which  was  contemplated  by section 10A of the Act, was to be worked out by reference to the rate  of tax provided in section 8(2) of the Act and not by reference  to the  concessional rate  of tax  provided in section 8(1)  of the  Act. The  Gujarat High Court felt that the Tribunal  was justified  in rejecting  the contention of the assessee  that the  maximum penalty that could be levied under section  10A was  1-1/2 times the concessional rate of tax provided  in section  8(1).  Dealing  with  the  several authorities noted  hereinbefore and  the scheme and language of the  section, the  Gujarat High  Court was of the opinion that to  accept the  contention that  the true effect of the words ’if the offence had not been committed’ was to presume a  situation   in  which   the  undertaking   given  by  the declaration was carried out even though in fact the same was not carried  out that  would not  be  a  proper  presumption because if  such a presumption was raised, it would make the whole situation  highly absurd.  The absurdity would be that for the  purpose of  penalising the defaulter, a presumption was to be made that the defaulter was not one who had

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937 Committed  any   default.  The   legislature  could  not  be attributed with  any such  absurd intention.  The High Court noted that  while framing  section 10A,  the legislature had not used  the expression  ’as if’,  at the time of using the words ’if  the offence had not been committed’, at choice of the word ’if’, instead of the expression ’as if’ indicated a conditional phrase,  and not  a phrase prescribing a deeming fiction.  The   High  Court   was  of   the  view  that  the interpretation   canvassed   by   the   assessee   obviously introduced the  concept  of  a  fiction  which  treated  the offender as  one who  had not  offended. Section  10A was  a penal provision  which stipulated  penalty in  lieu  of  the prosecution. me  High Court  expressed the view that one has yet to  come across  a  penal  provision,  which  created  a fiction that  an offender  was not  an offender, and should, therefore, be  treated as a non-offender. Obviously, by such a fiction,  the  very  object  of  the  penal  provision  in question was  frustrated  and,  therefore,  the  legislature could never have intended that by the creation of the above- referred fiction,  the very  object of introducing the penal clause contained  in section 10A of the Act should have been destroyed. The  truth of  the matter,  according to the High Court, was  that the  use of  the word "if" simpliciter, was meant to  indicate a  condition, the condition being that at the time  of assessing the penalty, that situation should be visualised wherein  there was  no scope  of  committing  any offence. Such  a situation  could  arise  only  if  the  tax liability fell  within the  provisions of sub-section (2) of section 8  of the Act. The scheme of the section showed that concessional rates  contemplated by  sub-section (1) thereof would be  available only with reference to those goods which were covered  by the declaration of form ’C’. This was clear in the  scheme of  the section. Further the High Court noted that  if  the  contention  canvassed  by  the  assessee  was accepted, then  the person who committed default In carrying out his  solemn undertaking  contemplated by form ’C’, would be in a better position than the assessee, who honestly paid the tax  under sub-section  (2) of  section 8 without giving any undertaking contemplated by form ’C ’ .      In the case of Deputy Commissioner of Commercial Taxes, Madurai Division,  Madurai v. Kodaikanal Motor & ion Private Limited, 31  S.T.C. 1  the Madras High Court agreed with the view  of  Veeraswami,  C.J.  in  State  of  Madras  v.  Prem Industrial M Corporation, (supra). 938      The section  as it stood at the relevant time permitted imposition on  dealer  by  way  of  penalty  of  a  sum  not exceeding one-and-a-half times the tax which would have been levied under this Act in respect of the sale of goods to him ’if the  offence had  not been committed’. The section as it reads today  after amendment  in 1973  permits imposition by way of  penalty of  a sum not exceeding one-and-a-half times the tax  which would  have been levied under sub-section (2) of section 8. Sub-section (2) of section 8 deals with tax in the course of inter-State sales.      Lord Denning, in Seaford Court Estates v. Asher, [1949] 2 All E.R. 155 at 164 said thus :           ".... When  a defect appears a Judge cannot simply           fold his  hands and  blame the  draftsman. He must           set to  work on  the constructive  task of finding           the intention  of Parliament.........  and then he           must supplement  the written  word so  as to  give           ’force  and   life’  to   the  intention   of  the           legislature....... A  Judge should ask himself the

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         question  how,  if  the  makers  of  the  Act  had           themselves come across this ruck in the texture of           it, they  would have  straightened it out? He must           then do  as they would have done. A Judge must not           alter the  material of which the Act is woven, but           he can and should iron out the creases."      The courts  must always  seek to find out the intention of the  legislature. Though  the courts  must find  out  the intention  of  the  statute  from  the  language  used,  but language more  often than  not is an imperfect instrument of expression of  human thought.  As Lord Denning said it would be idle  to expect  every statutory  provision to be drafted with divine prescience and perfect clarity. As judge Learned Hand said, we must not make a fortress out of dictionary but remember that  statutes must  have some  purpose or  object, whose imaginative  discovery is  judicial craftsmanship.  We need not  always cling  to literalness  and should  seek  to endeavor to  avoid an unjust or absurd result. We should not make a  mockery of  legislation. To  make sense  out  of  an unhappily worded provision, where the purpose is apparent to the judicial eye ’some’ violence to language is permissible. (See K. P. Varghese v. Income-Tax 939 Officer, Ernakulam  & Anr., 131 I.T.R. 597 at 604 to 606 and Luke v. Inland Revenue Commissioner, 54 I.T.R. 692.      Bearing the  scheme of the Act in perspective we are of the opinion  that the contention of the revenue in this case has to  be accepted. ’If the offence had not been committed’ cannot have  the effect that penalty should be levied on the basis of  the rate  which would  have  been  levied  had  no offence been committed under clause (d) of section 10 of the Act. For  the purpose of imposition of penalty, it could not be treated  that the rate which would govern the question of penalty was the rate which could be levied on the basis that the assessee  had made  no fault. It would lead to putting a premium on avoidance of the provisions of the Act.      In our  opinion sub-section (1) of section 10A makes it clear that  penalty should  be worked out at the rate of tax which would  have been  levied if  the offence  had not been committed. In  other words  the question  is what  tax would have been  levied under  the Act if the offence had not been committed. The assessee would not have committed any offence only if  he had  carried out  the undertaking given by it in its declaration  in form  ’C’ or  if he  purchased the goods without giving  any declaration  thereby incurring liability to pay normal rate of tax as contemplated by sub-section (2) of section  8. One  who commits  defaults cannot  be said to have  carried   out  the   undertaking  given  by  him.  The presumption canvassed  to be  raised that the true effect of the words  ’if the  offence had  not been  committed’ was to presume a  situation In  which the  undertaking given by the assessee had  been carried  out even though In fact the same had not been carried out. That would be an absurd result. In our opinion  the else  of the  expression ’if’  simpliciter, Will meant to indicate a condition, the condition being that at the  time of assessing The penalty, that situation should be visualised  wherein there  was no scope of committing any offence. Such  a situation  could  arise  only  if  the  tax liability fell  under sub-section  (2) of  section 8  of the Act. The  scheme of  section 8  indicated that  concessional rates contemplated  by  sub-section  (1)  thereof  would  be available only  with reference  to  those  goods  which  are covered by  the declarations  in form  ’C’. The moment it Is found that  in respect  of particular  quantity of goods the undertaking given  by the  assessee In  form ’C’ declaration

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has 940 not been  carried out, the goods were presumed to be such in respect of which no undertaking was existing. Therefore such goods would  be liable to normal tax contemplated under sub- section (2)  of section  8. Therefore, the penalty should be worked out  only on the basis of the normal rates prescribed under sub-section  (2) of  section 8. That would make sense. That is a reasonably possible construction. That would avoid absurd result.      It is  further to be borne in mind that section 10A was introduced for imposition of penalty in lieu of prosecution, that is  to visit  the person guilty with certain penalty in place of  prosecution. He  cannot  be  placed  in  a  better position  than   one  who   would  have  complied  with  the provisions of  the Act. In this respect having regard to the object of  the Act, in our opinion, we are in full agreement with the  views expressed  by the  Gujarat High Court in The Gaekwar Mills Ltd. v. The State OF Gujarat, (supra). As Lord Denning has  said, the judge has to perform the constructive task OF  finding the  intention of  Parliament, and  he must supplement the  written word  so as to give ’force and life’ to the intention of the legislature. Primarily, it is always the duty to find out the intention of the legislature and if it can  be done  without doing much violence to the language as we  Find it  can be  done in this case, though as we have noted that  when the purpose was writ large in the scheme of the section  "some violence"  is permissible, here we are of the opinion that the construction put by the assessee cannot be accepted  and the  contention  urged  on  behalf  of  the revenue in this case should be preferred.      We  must   remember  that  the  provision  is  a  penal provision. It  has further  to be  borne in  mind  that  the expression  ’if’  is  not  same  as  ’as  if’  nor  does  it contemplate a  deeming provision. It has also to be borne in mind that the provision was introduced for the imposition of penalty in  lieu of  prosecution. The purpose of the Act and the object  of a particular section has to be borne in mind. Having regard to the same, we are in agreement with he views expressed by  the  Orissa  High  Court  in  Bisra  Limestone Company  Ltd.   v.  Sales   Tax  Officer,  Rourkela  Circle, Uditnagar, and  Others, (supra),  Jammu & Kashmir High Court in The  Assessing  Authority  and  another  v.  Jammu  Metal Rolling Mills, (supra), the High Court of Kerala 941 in Kottayam  Electricals Private  Limited v.  The  State  of Kerala (supra).  The High  Court of Mysore in M. Paid & Sons v. The State of Mysore (supra), the High Court of Gujarat in The Gaekwar  Mills Ltd.  v. The State of Gujarat (supra) and with  respect   we  are   unable  to  accept  the  views  of Veeraswami, C.J.  in State  of  Madras  v.  Prem  Industrial Corporation (supra),  and the  other decision  of the Madras High  Court  in  Deputy  Commissioner  of  Commercial  Taxes (supra).      In the  premises  the  dealer’s  contention  cannot  be accepted and revenue’s stand must be upheld.      The  decision   under  appeal   cannot,  therefore,  be sustained. The  appeals are  allowed and  the  judgment  and order of the High Court of Madras are set aside. The revenue is entitled to the costs of these appeals. A.P.J.                                      Appeals allowed. 945