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CA Intermediate · Corporate and Other Laws · Interpretation of Statutes

A statute imposes a penalty on any person who "knowingly" files a false return. Kavita files a return containing a wrong figure caused by a clerical slip she did not notice. The department argues that the penalty provision should be read as imposing absolute liability. Which approach is consistent with interpretation principles for penal statutes?

The penalty does not apply. Penal provisions are strictly construed, and the word 'knowingly' makes guilty knowledge an essential element. A clerical slip Kavita did not notice lacks that knowledge, so she cannot be penalised under this provision.

  1. APenalty applies, because the object of revenue statutes is to collect maximum tax and the word 'knowingly' is merely directory
  2. BPenalty applies, because every person is presumed to know the contents of a return they sign, which makes mens rea irrelevant
  3. CPenalty does not apply only if Kavita proves the clerical slip to the satisfaction of a civil court
  4. DPenalty does not apply, because penal provisions are strictly construed and the word 'knowingly' requires proof of guilty knowledge, which is absent for an unnoticed slipCorrect

Explanation

Penal provisions are construed strictly, and where the statute expressly uses a word such as 'knowingly', mens rea is a necessary element. An unnoticed clerical error lacks guilty knowledge, so the penalty cannot be imposed. Treating the word as directory or presuming knowledge would defeat the express wording and the strict construction rule.

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