S. K. DAS J. This appeal on certificate of fitness granted by High Court of Bombay raises question of interpretation of sub- s. (10) of s. 35 of Indian IT Act, 1922. This sub-section is one of group of sub-sections substituted or inserted in said section by s. 19 of Finance Act, 1956 (18 of 1956). By s. 28 of said Finance Act, sub-s. (10) of s. 35 of Income-tax Act, 1922, came into force on 1st April, 1956. short question before us is, whether on its true construction, sub-s. (10) of s. 35 applies in case where company declares dividends by availing itself wholly or partly of amount on which rebate of income-tax was earlier allowed to it under cl. (i) of proviso to Para. B of Part I of relevant Schedules to Finance Acts, when such dividends were declared prior to coming into force of sub-section, that is prior to 1st April, 1956. 2 . facts which have given rise to appeal are these. Ahmedabad Manufacturing and Calico Printing Co. Ltd. is appellant before us. appellant company was incorporated under Indian Companies Act, 1866, and has its office at Ahmedabad. It carries on business of manufacturing and selling cotton piece-goods and chemicals. For asst. yr. 1952-53, corresponding account year being calendar year 1951, appellant was assessed to income-tax and super tax on total income Rs. 1,02,79,808 and allowed rebate of one anna per rupee on undistributed profits of Rs. 36,62,776 under first proviso to Para. B of Part I of First Schedule to Finance Act, 1952. amount of rebate allowed was Rs. 2,28,924. for asst. yr. 1953-54, corresponding account year being calendar year 1952, appellant showed book profit of Rs. 45,67,966, but was assessed to loss of Rs. 5,98,353 on 17th April, 1954. For said calendar year 1952, appellant declared dividend of Rs. 19,32,000 on 20th April, 1954. This dividend came out of undistributed profits of calendar year 1951 on which appellant had been allowed rebate. 3. On 18th March, 1958, ITO, Special Circle, Ahmedabad respondent No. 1 before us, issued notice to appellant calling upon latter to show cause why action under sub- section (10) of s. 35 should not be taken against appellant by withdrawing rebate allowed on sum of Rs. 19,32,000. appellant raised some objections, one of which was that sub- s. (10) of s. 35 did not apply to his case. ITO, however, held that sub-s. (10) of s. 35 applied and accordingly directed that rebate allowed on sum of Rs. 19,32,000 should be withdrawn, by recomputing tax payable by appellant. He ordered issue of demand notice for sum of Rs. 1,20,750 which was rebate allowed on Rs. 19,32,000. ITO passed this order on 27th March, 1958. 4 . Being aggrieved by that order, appellant moved High Court of Bombay by writ petition filed on 26th June, 1958. main ground taken by appellant was that sub-s. (10) of s. 35 did not apply to case where dividend was declared, as in this case, before coming into force of sub-s. (10) of s. 35. High Court rejected this contention and dismissed writ petition. appellant then obtained certificate of fitness and has preferred present appeal in pursuance of that certificate. 5. We may now read some of provisions of s. 35 in sofar as they are relevant for our purpose : "35. (1) CIT or AAC may, at any time within four years from date of any order passed by him in appeal or, in case of CIT, in revision under s. 33A and ITO may, at any time within four years from date of any assessment order or refund order passed by him on his own motion rectify any mistake apparent from record of appeal, revision, assessment or refund as case may be, and shall within like period rectify any such mistake which has been brought to his notice by assessee........ (5) Where in respect of any compelled assessment of partner in firm it is found on assessment or reassessment of firm or on any reduction or enhancement made in income of firm under s. 31, s. 33, s. 33A, s. 33B, s. 66 or s. 66A that share of partner in profit or loss of firm has not been included in assessment of partner or if included, is not correct, inclusion of share in assessment or correction thereof, as case may be shall be deemed to be rectification of mistake apparent from record within meaning of this section, and provisions of sub-s. (1) shall apply thereto accordingly, period of four years referred to in that sub-section being computed from date of final order passed in case of firm. (6) Where excess profits tax or business profits tax payable by assessee has been modified in appeal, revision or any other proceeding, or where any excess profits tax or business profits tax has been assessed after completion of corresponding assessment for income-tax (whether before or after commencement of IT (Amendment) Act, 1953, and in consequence thereof it is necessary to recompute total income of assessee chargeable to income-tax such recomputation shall be deemed to be rectification of mistake apparent from record within meaning of this section, and provisions of sub-s. (1) shall apply accordingly, period of four years referred to in that sub-section being computed from date of order making or modifying assessment of such excess profits tax or business profits tax... (10) where, in any of assessments for years beginning on 1st day of April of years 19 48 to 1955 inclusive, rebate of income-tax was allowed to company on part of its total income under cl. (i) of proviso ro para. B of Part I of relevnt schedules to Finance Act specifying rates of tax for relevant year and subsequently, amount on which rebate of income-tax was allowed as aforesaid is availed of by company, wholly or partly, for declaring dividends in any year, amount or that part of amount availed of as aforesaid, as case may be, shall, by reason of rebate of income-tax allowed to company and to extent to which it has not actually been subjected to additional income tax in accordance with provisions of cl. (ii) of proviso to Para. B of Part I of Schedules to Finance Acts above referred to be deemed to have been made subject of incorrect relief under this Act and ITO shall recompute tax payable by company by reducing rebate originally allowed, as if recomputation is rectification of mistake apparent from record within meaning of this section and provisions of sub-s. (1) shall apply accordingly, period of four years specified therein being reckoned from end of financial year in which amount on which rebate of income-tax was allowed as aforesaid was availed of by company wholly or partly for declaring dividends." 6 . Speaking generally, s. 35 deals with rectification of mistakes in circumstances detailed in various sub-sections thereof and provides for orders consequent on such rectification. Sub-s. (1) empowers IT authorities to rectify mistakes apparent from record in respect of certain orders passed by them. It provides that ITO concerned may at any time within four years from date of any assessment order passed by him on his own motion rectify any mistake apparent from record of assessment. power of rectification may be exercised subject to two conditions : (1) that there is mistake apparent from record of assessment, and (2) that order of rectification is made within four years from date of assessment sought to be rectified. Sub-s. (5) deals with inclusion or correction of income of partner in firm consequent upon assessment or reassessment of firm of which he was partner. Sub-s. (6) deals with recomputation of total income of assessee in consequence of modifications made in excess profits tax or business profits tax payable by assessee subsequent to assessment made under IT Act. These two sub-sections were considered by this Court in two decisions to which we shall presently refer. They have been relied on by appellant and have some bearing on interpretation of sub-s. (10). Sub-s. (2), (3), (4), (7), (8) and (9) are not relevant for our purpose and need not be referred to. 7. Now, we come to sub-s. (10). It deals with case where rebate was allowed to company on part of its income (viz., undistributed profits) by virtue of concessions given by Finance Acts of 19 48 to 1955 : this is clear from first part of sub-section. second part states condition in which, or rather crucial event on happening of which, rebate granted to company is deemed to have been given by mistake apparent from record : this condition or crucial event is declaration of dividends by company out of amount in whole or in part on which rebate was earlier granted to it. third and operative part states that on happening of crucial event, amount of which rebate was granted and which has been subsequently utilized for declaring dividends shall be deemed to have been made subject of incorrect relief under Act and ITO shall recompute tax payable by company by reducing rebate originally allowed as if recomputation is rectification of mistake apparent from record within meaning of section. fourth and last part introduces period of limitation of four years, four years being reckoned not from date of order passed as in sub-s. (1) but from end of financial year in which amount on which rebate of income-tax was allowed was availed of by company wholly or partly for declaring dividends. This,in brief, appears to be scheme of sub-s. (10) of s. 35. 8. Now, argument on behalf of appellant is this. Like sub-s. (5) of s. 35, sub-s. (10) affects vested right, namely, right to rebate of income-tax on part of total income of company under cl. (i) of proviso to Para. B of Part I of relevant Schedules to Finance Acts of 19 48 to 1955, and further right to declare dividends out of undistributed profits of previous year. Under well-settled rules of statutory construction no statute which impairs existing right or obligation except as regards matter of procedure, shall have retrospective operation unless such construction appears very clearly in terms of Act or arises by necessary and distinct implication. Put differently, statute is not be construed to have greater retrospective operation than its language renders necessary; and it is submitted that "the general rule is that all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence areprima facieprospective; and retrospective effect is not to be given to them unless by express words or necessary implication, it appears that this was intention of legislature" and "it is corollary of this general presumption against retrospeciton that, even when statute is intended to be to some extent retrospective, it is not to be construed as having greater retrospective effect than its language renders necessary"(Halsbury's Laws of England,Vol. 36, 3dh Edn. p. 423 and p. 426). argument on behalf of appellant is that by s. 28 of Finance Act, 1956 sub-s. (10) has undoubtedly retrospective effect from 1st April, 1956; but language of sub-section does not expressly, nor by necessary implication, show that it has any greater retrospective effect. It is pointed out that, on contrary, where legislature wanted particular sub- section to have greater retrospective effect, it had said so. e.g., in sub-s. (6). It is also pointed out that sub-s. (5) of s. 35 was inserted by Indian IT (Amendment) Act, 1953 and by s. 1(2) of said Act it came into force on 1st April, 1952. Where legislature wanted to give greater retrospective effect to particular provisions, it said so in ss. 3(2), 7(2) and 30(2) of said Act. That being position, argument on behalf of appellant is that we should not give any greater retrospective effect to sub-s. (10) of s. 35 than what has been done by s. 28 of Finance Act, 1956. Learned counsel for appellant has strongly relied on decision of this Court inITO vs. S. K. Habibullah (1962) 44 ITR 809 (SC)wherein with regard to sub-s. (5) of s. 35 it was held that sub- section was not declaratory of pre-existing law nor matter relating to procedure but affected vested rights and must be deemed to have come into force only from 1st April, 1952; therefore ITO had no jurisdiction under said sub-section to rectify assessment of partner consequent on assessment of firm in cases where firm's assessment was completed before 1st April, 1952. argument of learned counsel for appellant is that same principle must apply in present case and sub-s. (10) of s. 35 does not apply to case where dividend was declared by company before date of coming into force of sub-section, namely, 1st April, 1956. 9. second part of argument of learned counsel for appellant is that there is no real difference in language between two sub-sections, sub- s. (5) and sub-s. (10) of s. 35. In both cases rectification or correction is made by reason of sub-section event; in sub-s. (5) subsequent event is assessment of firm which discloses inaccuracy in earlier assessment of partner; in sub-s. (10) subsequent event is declaration of dividend out of amount on which rebate was earlier granted. It is pointed out that in their true scope and effect two sub-sections stand on same footing. Sub- s. (10) further makes it clear that by legal fiction that which was correct at time when it was made is rendered incorrect after coming into force of sub-section. sub-section states clearly : "...shall, by reason of rebate of income-tax allowed to company... be deemed to have been made subject of incorrect relief under this Act, and ITO shall recompute tax payable by company by reducing rebate originally allowed ..." This language, it is argued, is clearly prospective and does not justify carrying of legal fiction to period earlier than 1st April, 1956. 10. As against these arguments, learned counsel for respondent has contended that language of sub-s. (10) is different from that of sub-s. (5) and principle laid down by this Court inS. K. Habibullah'scase(1962) 44 ITR 809 (SC)cannot be applied to present case. Alternatively ,he has argued that decision is incorrect and should be reconsidered by us. argument of learned counsel for respondent is that sub-s. (10) by necessary implication has greater retrospective effect than what is laid down by s. 28 of Finance Act, 1956. He points out that first part of sub-section talks of assessments made for any of years beginning on 1st April, 19 48 , to 1st April, 1955, when rebate of income-tax was allowed; then second part refers to subsequent declaration of dividend by company in any year. Learned counsel for respondent has emphasised expression "in any year" and has submitted that this shows that intention was to take in declaration of dividend made even earlier than 1st April, 1956. According to him, only effect of s. 28 of Finance Act, 1956, is that ITO can take action only after 1st April, 1956, but language of sub- section does not justify conclusion that legal fiction created by it must be restricted to declaration of dividends on or after 1st April, 1956. 11. We have carefully considered these arguments. language of sub-s. (10) of s. 35 is perhaps not as clear as one might wish it to be. There is no doubt however, that sub-section affects vested rights and should not be given greater retrospective opera-tion than its language renders necessary. Even though sub-section is to certain extent retrospective, and s. 28 of Finance Act, 1956, in express terms makes it retrospective from 1st April, 1956, it is clear to us that there is nothing in language of sub-section which would justify inference that legislature intended to carry legal fiction created by sub-section to period earlier than date on which sub- section came into force. maximum application in such cases is that even in construing section which is to certain extent retrospective, line is reached at which words of section cease to be plain. We are further of opinion that when first part of sub-section refers to assessments for years 19 48 to 1955, it merely refers to period during which rebate provisions were in force. It is not disputed before us that rebate provisions came into force from Finance Act of 19 48 and ended with Finance Act of 1955. first part, therefore, is merely reference to period during which rebate provisions were in force. It is indeed true that in second part of sub-section expression used is "declaring dividends in any year" and this has to be read in conjunction with word "subsequently" which can only mean subsequent to allowance of rebate. But in very same part it is further stated that declaration of dividend in any year shall, by reason of rebate, be deemed to have made amount on which rebate was granted, subject of incorrect relief, etc. This language which creates legal fiction is clearly prospective and shows that what was correct at time when rebate was granted is rendered incorrect on happening of crucial event after coming into force of sub-section, and by express terms of s. 28 of Finance Act, 1956, sub-section comes into force on 1st April, 1956. We are unable, therefore, to agree with learned counsel for respondent that language of sub-s. (10) by necessary implication takes legal fiction back to period earlier than 1st April, 1956. In coming to this conclusion, we have kept in mind principle that statute does not necessarily become retrospective because part of requisites for its action is drawn from time antecedent to its passing. 1 2 . Furthermore, we see no reason why principle laid down inS.K. Habibullah'scase, (supra) will not apply in present case nor are we satisfied that that decision with regard to sub-s. (5) of s. 35 was incorrect. We may point out, however, that inSecond Addl. ITO vs. Atmala Nagaraj (1962) 46 ITR 609 (SC)this Court went step further and held that sub-s. (5) of s. 35 was not applicable to cases where assessment of partner was completed before 1st April, 1952, even though assessment of firm was completed after 1st April, 1952. 13. Learned counsel for appellant frankly conceded before us that he did not wish to go as far as that and contend that even in case where declaration of dividend was made after 1st April, 1956, sub-s. (10) would not apply; because that would make sub-s. (10) unworkable. decision inSecond Addl. ITO vs. Atmala Nagaraj, (supra)may perhaps require reconsideration as to which we need not express any final opinion now; but so far as this case is concerned we see no reason why principle inS. K. Habibullah'scase(supra)will not apply. principle is simply this. statute which is not declaratory of pre-existing law nor matter relating to procedure but affects vested rights cannot be given greater retrospective effect than its language renders necessary, and even in construing section which is to certain extent retrospective, line is reached at which words of section cease to be plain. These are well-settled principles, and there in no reason to doubt their accuracy. 14. For reasons given above, we would allow appeal,set aside order and judgment of High Court and quash order of ITO dt. 27th March, 1958, and notice of demand dt. 28th March, 1958. appellant will be entitled to its costs throughout. SARKAR , J. In its assessment to income-tax for year 1952-53, appellant, company, had been granted under provisions of Finance Act, 1952, rebate on portion of its profits of previous year, that is, 1951, which it had not distributed as dividends to its shareholders. In next asst. yr. 1953-54, appellant used part of aforesaid undistributed profits for declaring dividends. As law then stood, nothing could be done by Revenue authorities to withdraw rebate earlier granted on ground of profits being utilised in declaring dividends in later year. From 1st April, 1956, however, there was change in law as sub-s. (10) of s. 35 of IT Act, 1922, was brought into force then. By order made on 27th March, 1958, under that sub-section, terms of which I will set out presently, aforesaid rebate was withdrawn and appellant was called upon to refund it. appellant then applied to High Court at Bombay for writ to quash order of 27th March, 1958, on ground that sub-s. (10) was not applicable to facts of this case for reasons which I will later state. That application was dismissed. This appeal is against this decision of High Court at Bombay dismissing application. 2. Now sub-s. (1) of s. 35 of IT Act was enacted by Finance Act of 1956 and it was given effect from 1st April, 1956. That sub-section, in sofar as it is necessary to state for purpose of this case, provides that where in any of assessment years 19 48 -49 to 1955-56, rebate of income-tax was allowed to company under Finance Act prevailing in that year on part of its total income" and subsequently amount on which rebate of income-tax was allowed as aforesaid is availed of by company, wholly or partly, for declaring dividends in any year.... ITO shall recompute tax payable by company by reducing rebate originally allowed". sub-section in substance permits rebate duly allowed in any year before it came into force to be withdrawn if "subsequently" amount on which rebate was allowed" is availed of for declaring dividends in any year". 3. appellant contends that sub-section does not apply unless amount on which rebate was granted is availed of for declaring dividends after sub-section had come into force, that is after 1st April, 1956, and therefore, it does not apply to present case. It is said that if it were not so, sub-section would be given retrospective operation and rule is that it is to be presumed that statute dealing with substantive rights is not to have such operation. case ofITO vs. S. K. Habibullah (supra), was cited in support of this contention. 4 . I will assume that if sub-section were applied to case like present, it would affect vested right. rule no doubt is that statute is presumed not to be so. But this rule does not apply if language of statute indicates intention to give it retrospective operation. It seems to me that sub-s. (10) uses language which indicates sufficiently clearly that it was intended to be applied where amount on which rebate had been obtained was availed of for declaring dividends before sub-section came into force, that is to say, to have retrospective operation. It says," subsequently amount on which rebate of income-tax was allowed as aforesaid is availed of... for declaring dividends in any year". There is no doubt that words "subsequently" and "in any year" mean in any year subsequently to year in which rebate was granted. They would, therefore, clearly include year before sub-section came into force. But it is said that these words should in view of rule be read as not including year before sub-section came into force as they also include years subsequent to coming into force of sub-section and are therefore ambiguous. 5. I am unable to accept this contention. I find no ambiguity. If intention was that sub-section would apply only when amount was availed of for declaration of dividends after it was enacted then words "subsequently" and "in any year" were wholly unnecessary. Without these words sub-section would have read, "and amount is availed of for declaring dividends". There would then be no doubt that it was intended to operate only prospectively. But legislature used some more words. It must have done so with some purpose. What that purpose was if it was not to give sub-section retrospective operation, I fail to see. I am unable to read words "subsequently" and "in any year" asotioseand as indicating no different intention. Therefore, it seems to me that language of sub-section is plainly requires it to have retrospective operation. sub-section is properly applicable to this case. 6 . There is another consideration leading me to view that presumption against retrospective operation does not arise here. It was said inPardo vs. Bingham (1869) LR 4 Ch App 735that it was not invariable rule that statute could not have retrospective operation unless so expressed in its very terms, and that it was necessary to look to general scope and purview of statute and at remedy sought to be applied and consider what was former state of law and what it was that legislature contemplated. It is quite plain that in providing for grant of rebate on undistributed profits by Finance Acts 19 48 to 1955 legislature wanted to encourage employment of profits made in business in business itself. object presumably was to expand industries of country. This involved long term employment of profits in business. It could not have been intention of legislature to grant rebate when company only kept profits for short time with itself and having earned rebate distributed profits without industry having had any real benefit of them. I think I should state here that provisions for grant of rebate did not require that dividend was not to be declared at all. object was to encourage reasonable division of profits between shareholders and industry. Allowance of rebate was provided for on that part of profits which was left for employment in industry after reasonable dividends had been distributed to shareholders. rebate was allowed on graded scale depending on amount of profits which was not distributed as dividends. 7. Now system of granting rebates started in 19 48 -49. It was stopped in 1955-56. sub-section was brought into force on 1st April, 1956, that is, seven years after system had first been started. sub-section provided for withdrawal of rebate when amount on which it had been granted was availed of in declaring dividends. It is fairly clear from this that legislature did not approve of these amounts being utilised in declaration of dividends. It is also not too much to suppose that there had been many previous cases of such utilisation of profits for if it has not happened earlier, there is no reason to think that legislature anticipated evil happening in future and passed law to stop it. In view of large number of years that had passed between time when allowance of rebate commenced and time when sub-section was brought into force, it can be imagined that very large number of case of distribution of profits on which rebate had been allowed, had already taken place. I find it difficult to think that many cases remained after 1st April, 1956, where company which intended to utilise amounts on which rebate had been granted in declaration of dividends, had not already done so. 6 . There is no dispute that by sub-s. (10) legislature intended to penalise case where subsequent to its enactment, amount on which rebate had been granted was utilised in declaration of dividends. Now is there any reason to think that legislature did not want to impose penalty also on those who had earlier utilised amount in declaration of dividends ? There was no special merit in these latter cases. And I also think that they formed majority of cases. grant of rebate having been stopped after 31st March, 1956, there was no occasion to provide for cases of such grant thereafter. All these circumstances lead me to view that intention of legislature was to penalise cases of utilisation of amounts on which rebate had been granted in payment of dividends which had happened before sub-section came into force. remedy which sub-section provided would largely fail in any other view. general scope and purview of sub-section and consideration of evil which it was intended to remedy lead me to opinion that intention of legislature clearly was that sub-section should apply to facts that we have in this case. 9 . As toS. K. Habibullah'scase(supra)I do not think that much assistance can be had from it. It applied rule of presumption against statute having retrospective operation as to which rule, of course, there is no dispute to sub-s. (5) of s. 35. Now cases on construction of one statute are rarely of value in construing another statute, for each case turns on language with which it is concerned and statutes are not often expressed in same language. language used in sub-ss. (5) and (10) seem to me to be wholly different. There is nothing inS. K. Habibullah'scase (supra) to indicate that in opinion of learned judges deciding it there were any words which would indicate that sub-s. (5) was to have retrospective operation. In my view, sub-s. (10) contains such words. Further more, I do not find that other considerations to which I have referred arose for discussion in that case. In my view, two cases are entirely different. 10. I, therefore, think that sub-s. (10) of s. 35 properly applies to this case. In my view, appeal should be dismissed with costs. HIDAYATULLAH, J. This is appeal by assessee with certificate under Art. 133(1)(c) of Constitution from judgment and order of High Court of Bombay dismissing assessee company's petition under Art. 226 of Constitution which challenged order under s. 35(10) of IT Act rectifying earlier assessment and sought writ or writs to prohibit IT authorities from giving effect to that order. 2 . assessee (the Ahmedabad Manufacturing and Calico Printing Co. Ltd.) is public limited company carrying on business of manufacture of cotton piece-goods and chemicals. year of account of assessee-company is t h e calendar year. In assessment year 1952-53, corresponding to calendar year 1951, appellants were assessed on 31st Jan., 1953, on total income of Rs. 1,02,79,808. assessee-company was allowed rebate of one anna per rupee amounting to Rs. 2,28, 924 on undistributed profits of Rs. 26,62,776 under first proviso to Para. B of Part I of First Schedule to Finance Act, 1952. For asst. yr. 1953-54 (account year calendar year 1952) books of assessee company showed profit of Rs. 45,67,966. That profit became loss of Rs. 5,98,353 after deductions like depreciation etc., were allowed. In spite of there being loss, assessee-company declared on April 20th, 1953, dividend of Rs. 19,32,000 for year of account 1952. 3. ITO, by order dt. 18th March, 1958, called upon assessee- company to show cause why action under s. 35(10) of IT Act should not be taken to recall proportionate part of rebate because in his opinion entire dividend of Rs. 19,32,000 came out of undistributed profits of calendar year 1951, on which appellant had received rebate. assessee- company objected saying that 10th sub-section of s. 35 was introduced as from 1st April, 1956, and could not operate on assessment which had become final before 1st April, 1956, from which date sub-s. (10) was retrospectively applied. objection was not accepted and ITO held that dividend paid in year 1952 came out of undistributed profits of 1951 and tax proportionate to sum of Rs. 19,32,000 amounting to Rs. 1,20,750 was leviable. assessee-company filed petition under Art. 226 of Constitution. That application was heard along with another filed by New Shorrock Spg. & Mfg. Co. Ltd., in which leading judgment was delivered by High Court. Following decision in theNew Shorrock Spg. & Mfg. Co'scase (1959) 37 ITR 41 High Court dismissed assessee-company's petition with costs. High Court, however, certified case as fit for appeal and hence present appeal. 4. Sect. 35 deals with rectification of mistakes. Prior to 1939, rectification of any mistake apparent from record could be made within one year of order of assessment but by Indian IT (Amendment) Act, 1939 (7 of 1939) period of four years was substituted for one year in first sub-section. That sub-section omitting provisos read at all material times as follows : "The CIT or AAC may, at any time within four years from date of any order passed by him in appeal or, in case of CIT, in revision under s. 33A and ITO may, at any time within four years from date of any assessment order or refund order passed by him, on his own motion rectify any mistake apparent from record of appeal, revision assessment or refund, as case may be, and shall within like period rectify any such mistake which has been brought to his notice by assessee." 5. It must be noticed that time-limit started from date of order of assessment which was to be rectified. In 1953, by s. 19 of Indian IT (Amendment) Act, 1952 (25 of 1953), sub-s. (5) (among others) was added as from April 1, 1952. That sub-section reads as follows : "(5) Where in respect of any completed assessment of partner in firm it is found on assessment or reassessment of firm or on any reduction or enhancement made in income of firm under s. 31, s. 33, s. 33A, s. 33B, s. 66 or s. 66A that share of partner in profit or loss of firm has not been included in assessment of partner or, if included, is not correct, inclusion of share in assessment or correction thereof, as case may be, shall be deemed to be rectification of mistake apparent from record within meaning of this section and provisions of sub-s. (1) shall apply thereto accordingly, period of four years referred to in that sub-section being computed from date of final order passed in case of firm." 6. It must be noticed that under this amendment time-limit started from date of final order passed in case of firm though rectification is to be made in assessment of partners of firm. 7 . By s. 19 of Finance Act, 1956, sub-s. (10) (among others) was added as from 1st April, 1956. That sub-section reads as follows : "(10) Where, in any of assessments for years beginning on 1st April, of years 19 48 to 1955 inclusive, rebate of income-tax was allowed to company on part of its total income under cl. (i) of proviso to Para. B of Part I of relevant Schedules to Finance Acts specifying rates of tax for relevant year, and subsequently amount on which rebate of income-tax was allowed as aforesaid is availed of by company, wholly or partly, for declaring dividends in any year, amount or that part of amount availed of as aforesaid, as case may be, shall, by reason of rebate of income-tax allowed to company and to extent to which it has not actually been subject to additional income-tax in accordance with provisions of cl. (ii) of proviso in Para. B of Part I of Schedules to Finance Acts above referred to, be deemed to have been made subject of incorrect relief under this Act, and ITO shall recompute tax payable by company by reducing rebate originally allowed, as if recomputation is rectification of mistake apparent from record within meaning of this section and provisions of sub-s. (1) shall apply accordingly, period of four years specified therein being reckoned from end of financial year in which amount on which rebate of income-tax was allowed as aforesaid was availed of by company wholly or partly for declaring dividends." It will be noticed that time-limit under this sub-section was to commence from end of financial year in which dividends were declared from profits on which rebate was earned earlier. 8 . question in this case is whether sub-s. (10) can apply to assessment which had been made before sub-s. (10) came into force. contention of assessee-company is that sub-s. (10) was given retrospectivity only upto 1st April, 1956, and words of that sub-section should be interpreted in such way as to give sub-section no greater retrospectivity. According to assessee-company, assessment for year 1953-54 had become final on 17th April, 1954, that is to say, before 1st April, 1956, from which date sub-s. (10) was made to operate. provisions of s. 35(10), according to assessee-company, could only be utilised if dividends were declared after 1st April, 1956, but not if declaration took place earlier. Reliance was placed upon decision of this Court inITO vs. Habibullah (supra)and reference was also made to another decision followingHabibullah'scase(supra).Second Addl. ITO vs. Atmala Nagaraj. 9 . Our learned brother Das J. followingHabibullah'scase (supra) has held that contention of assessee-company is well-founded and has expressed opinion thatAtmala Nagaraj'scase (supra) may need reconsideration. He has, therefore,ordered reversal of judgment and order of High Court. In our judgment, and we say it with profound respect, this appeal must be dismissed. We are also of opinion that both above cases (which are of same Divisional Bench) may have to be reconsidered hereafter.Atmala Nagaraj'scase (supra) followedHabibullah'scase (supra). difference in facts of two cases was only in one respect and that was not sufficient to takeAtmala Nagaraj'scase (supra)out of ratio of earlier decision. We shall deal with these two cases later. 10. IT Act imposes charge of tax for year at time and that year is year of assessment. charge is in respect of previous year which is commonly known as year of account. rate at which tax is to be charged is enacted by annual Finance Act for each assessment year. assessment year is financial year. From nature of things amendment o f IT Act, made in middle of assessment year, if made to operate from beginning of assessment year, operates on incomes which had been earned before. Since amendment cannot be allowed to operate from mid-term, each such amendment is made to comprise whole assessment year whether it be assessment year then running or earlier or later assessment year. Amendments are thus given retrospective operation from first day of April in same or preceding, or prospective operation for future assessment year. Ordinarily, law, as it stands on 1st of April in any assessment year, applies to assessments in that year but law may expressly or by necessary implication give itself greater retrospective operation 11. date on which amendment comes into force is date of commencement of amendment. It is read as amended from that date. Under ordinary circumstances, Act does not have retrospective operation on substantial rights which have become fixed before date of commencement of Act. But this rule is not unalterable. legislature may affect substantial rights by enacting laws which are expressly retrospective or by using language which has that necessary result. And this language may give enactment more retrospectivity than what commencement clause gives to any of its provisions. When this happens provisions thus made retro- spective, expressly or by necessary intendment, operate from date earlier than date of commencement and affect rights which, but for such operation, would have continued undisturbed. 12. It must be remembered that if IT Act prescribes period during which tax due in any particular assessment year may be assessed, then on expiry of that period Department cannot make assessment. Where no period is prescribed that assessment can be completed at any time but once completed it is final. Once final assessment has been made, it can only be reopened to rectify mistake apparent from record (s. 35) or to reassess where there has been escapement of assessment of income for one reason o r another (s. 34). Both these sections which enable reopening of back assessments provide their own periods of time for action but all these periods of time, whether for first assessment or for rectification, or for reassessment, merely create bar when that time passed against machinery set up by IT Act for assessment and levy of tax. They do not create exemption in favour of assessee or grant absolution on expiry of period. liability is not enforceable but tax may again become exigible if bar is removed and taxpayer is brought within jurisdiction of said machinery by reason of new power. This is, of course, subject to condition that law must say that such is jurisdiction, either expressly or by clear implication. If language of law has that clear meaning, it must be given that effect and where language expressly so declares or clearly implies it, retrospective operation is not controlled by commencement clause. 1 3 . amendment, with which we are concerned, was made by Finance Act, 1956 (18 of 1956). By s. 2, it dealt with year beginning on 1st day of April, 1956, and fixed rates of taxes for assessment year commencing on that date. It also amended IT Act by s. 3 to 35. Sec. 28 then prescribed dates of commencement of these sections. It read : " 28Commencements of amendments to Act II of 1922.The amendments made in IT Act by s. 4 and cl. (b) of s. 15 shall be deemed to have come into force on 1st day of April 1955, and amendments made by ss. 3 to 27 inclusive shall come into force on 1st day of April, 1956." 14. Sub-s. (10) was introduced into s. 35 of IT Act by s. 19 of this Act. If there was nothing more in language of sub-section to give it operation from earlier date it would have operated only from 1st April, 1956, but language of sub-section gives it additional retrospectivity and says so in such clear and unambiguous language as to leave no doubt. There is no room for application of Lord Justice Bowen's dictum inReid vs. Reid (1886) 31 Ch. D. 402that even in construing section which is to certain extent retrospective, maxim that statutes are prospective only, ought to be borne in mind as applicable whenever line is reached at which words of section cease to be plain. 15. topic of s. 35 is rectification of mistakes apparent from record. Sub-s. (10) introduced new basis for rectification in s. 35 which already prescribed period of four years from order of assessment and new sub- section enable rectification to be made in new circumstances and within new time-limit. Those circumstances, when analysed, furnish key to retrospectivity of section. We shall begin by quoting only material portion of that sub-section which has been quoted in full earlier : "....Where, in any of assessments for years beginning on 1st day of April, of years 19 48 to 1955 inclusive, rebate of income-tax was allowed...and subsequently amount on which rebate of income-tax was allowed....is availed of...for declaring dividends in any year...the amount....shall be deemed to have been made subject of incorrect relief...and ITO shall recompute tax...as if recomputation is rectification of mistake apparent from record within meaning of this section and provisions of sub-s. (1) shall apply accordingly period of four years...being reckoned from end of financial year in which amount on which rebate of income-tax was allowed....was availed of...for declaring dividends." purport of this new sub-section was recall of rebate which had been allowed in any of assessments for years 1st April, 19 48 , to 31st March, 1956, under certain circumstances. At very start, sub-section takes one to assessment years to which s. 28 which prescribed commencement as 1st April, 1956, did not take one to. 1 6 . We do not accept argument of learned counsel for assessee-company that mention of years is merely repetition of historical facts for ready reference. words "in any of assessments for years etc." show in respect of which assessments rectification would be possible. years are mentioned individually by using word "any." law speaking in 1956 was thus speaking of all assessment years individually going back to 1st April, 19 48 . language was clearly one of retrospectivity and suggestion that there is no intent behind these words and that they merely refer to historical facts is not acceptable to us. This conclusion is further fortified by words : "and subsequently amount...is availed of...for declaring dividends in any year..." 17. Having mentioned years individually in opening part, event is mentioned which is subsequent, namely, declaration of dividend from amount on which rebate was allowed."Subsequently" here obviously means subsequent to "any of assessments for years beginning on 1st day of April of years 19 48 to 1955 inclusive", not necessarily subsequent to amending Act. declaration of dividends must be after grant of rebate. That is only condition and it does not import date of commencement of sub- section in any way. Then comes operative part and it is this. If in earlier assessment in any of years mentioned rebate was allowed and subsequently in any year there was declaration of dividend utilising amount on which rebate was given, amount so utilised should be deemed to be subject of incorrect relief. This fiction comes into force from 1st April, 1956, but it is not stated that circumstances in which it comes into being should also be after 1st April, 1956. sub-section no doubt is to be used from 1st April, 1956, but it is to be used retrospectively to recall rebate on amounts which law deems to have been subject of incorrect relief in past. recalling of rebate is after enactment of sub-s. (10) but conditions for exercise of power may be before or after commencement of sub- section. only curb on exercise of power is that ITO may go back period of four years reckoned from end of financial year in which declaration of dividend was made to date when action is taken. 1 8 . In present case this is so. assessee-company declared dividends in calendar year 1952. assessment year was 1st April, 1953, t o 31st March, 1954. letter written on 18th March, 1958, asking assessee-company to show cause was within four years reckoned from end of financial year (31st March, 1954) in which amount on which rebate of income-tax was availed of for declaring dividends. It complied with letter of sub-section. Since power commenced on 1st April, 1956, utmost reach of ITO would be end of asst. yr. 1952. Any declaration of dividend after 1st day of April, 1952, out of accumulated profits of any of years in which rebate was earned would be within time for recall of rebate. But declaration prior to 1st April, 1952, would be beyond power of ITO to recall. This meaning is only meaning which plain words of section can bear. Any other meaning might make sub-s. (10) unworkable because no company, with knowledge that rebate would be recalled, would like to declare dividends after 1st April, 1956, out of amounts on which rebate was earned. If other meaning was attributed, sub-s. (10) might well be dead letter. sub-section was obviously result of noting how rebates were earned and later were being utilized to fill pockets of shareholders. amendment met this situation and did it in very clear terms. 19. It remains to consider decisions of this Court inHabibullah'scase (supra) andAtmala Nagaraj'scase(supra). In those two cases this Court was called upon to interpet sub-s. (5) quoted above with was introduced as from 1st April, 1952, by Indian IT (Amendment) Act 1953. In both cases there was final assessment of incomes of partners in registered firms. Later assessment of registered firms took place and it was found that share of income of partners was larger than what had been assessed. Under s. 36(1), as it stood before sub-s. (5) was introduced, rectification could be made in respect of mistake apparent from record and records of firms could not be read with those of partners to find error in latter. There was thus impasses. It was ruled by Privy Council inCIT vs. Khemchand Ramdas (1938) 6 ITR 414 (PC): "....When once final assessment is arrived at, it cannot in their Lordships opinion be reopened except in circumstances detailed in ss. 34 and 35 of Act...and within time limited by those sections." 20. Therefore, unless original s. 35 allowed such rectification there was no help. Often firm's final assessment dragged on for years and by time that assessment was done time limited by sub-s. (1) had already run out. Parliament, therefore, stepped in with amendment which was to commence on 1st April, 1952. Two matters were provided by sub-s. (5). Firstly result of assessment of firm showing that partners income was not properly included in their own assessments, was to be deemed to disclose error in record of partners' assessment and secondly, period of four years instead of being computed from order of assessment made against partners as under s. (1) was to be computed from date of final order passed in case of firm. 21. No doubt this power could be exercised from 1st April, 1952 but question that had to be considered was whether it could be excercised only to reopen assessment of partners of firm if, and only if, order in assessment of firm was passed after amendment came into force. In dealing with matter inHabibullah'scase(supra)this Court referred to finality which attaches to final assessment as stated by Privy Council. This Court then referred to date of commen cement of sub-s. (5) which was fixed retrospectively as April, 1, 1952, and held that sub- section could not be used to reopen assessment which had become final before commencement of new sub-section, contrasting its language with that of sub-s. (6) which was simultaneously introduced. InHabibullah'scase (supra) dates were : assessment 1946- 22- Partners' on for 47 2-1950 1947- do do on do 48 Registered assessment 1946- 31- on firms' for 47 10-1959 1947- 30- do do on 48 6-1951 Sub- section (5) to section 35 1-4-1952 introduced from on Order under section 27-3-1954 35 (5) on 22. If sub-s. (5) could be used in this case it is plain that four years period had not passed between 31st Oct., 1950 (which was earlier assessment) and 27th March., 1954, when rectification was made. No doubt, two assessments of firm were also before 1st April, 1952, but sub- section has nowhere said that power was only to be exercised if assessment of firm was after that date. Such meaning is also difficult to imply. Under fiction created after 1st April, 1952, assessment of partners disclosed mistake and if fiction and rest of sub-section were to be given their full and logical effect assessment of partners could be reopened and rectified. But it was held otherwise by this Court. main reason was that partners' assessment had become final before 1st April, 1952, that under law, as it then stood, there was no error in their record, and sub-s. (5) having been enacted retrospectively from 1st April, 1952, could not be given more retrospectivity. That firm's assessment was also before April 1, 1952, was not given as reason and in any event it was not very relevant. It neither added to nor detracted from finality (such as it was on 22nd Feb., 1952), on partners' assessment. law obviously mentioned final order in firm's assessment as starting point in view of length of time firm's assessments take to reach their own finality. But there was nothing to show that this newterminus quomust be after 1st April 1952, before sub-s. (5) could be used. words of sub-section were entirely indifferent to this aspect. InAtmala Nagaraj'scase assessment of partners (22nd Jan., 1952), was also completed before 1st April, 1952, and had become final, subject, however, to ss. 34 and 35. No doubt, assessment of firm was completed after 1st April, 1952, but this distinction made no difference to finality such as had been gained on 22nd Jan., 1952. 23. We do not naturally express final opinion on sub-s. (5). We must leave that to future case. We must, however, say that two earlier cases may have to be reconsidered on some future occasion. When occasion comes questions to ask would be : 1. Did finality attach inHabibullah'scase (supra) to partners, assessment under law as it then stood from 22nd Feb., 1950 (partners, assessment), or from 31st Oct., 1950, and 30th June, 1951 (the firm's assessment) ? 2. Was there no finality in so far as partners' assessment was concerned inAtmala Nagaraj'scase(supra)between 22nd Jan., 1952 (partners' assessment) and 1st April, 1953 (the commencement of sub-s. (5)) ? 3. Was finality of partners, assessment, if any, controlled in one case by fact that assessment of firm was before 1st April, 1952, and in other by fact that assessment of firm was after 1st April, 1952 ? 24. We have detailed these questions because they highlight only point of difference between two cases. We express no opinion on these questions. 25. In view of what we have said on interpretation of s. 35(10) we are of opinion that judgment of High Court was right. We would, therefore, dismiss this appeal with costs. BY COURT In accordance with opinion of majority, this appeal is dismissed with costs. *** Ahmedabad Manufacturing and Calicoprinting Co. Ltd. v. S.C. Mehta, ITO and Other