This statement is made by John Proctor to Abigail Williams in Act One.
John is a farmer and much respected and feared by the villagers in Salem. He is quite outspoken and direct in his criticism of others, which also makes him much resented by those who deem him their enemy. He has come to the Reverend Parris' home to enquire about the reverend's daughter, Betty, who has fallen into a faint after her father had discovered her and other girls from the village dancing in the woods. The circumstances of the discovery has led the villagers to suspect that witchery is afoot in Salem, and many have come to the reverend's house out of curiosity.
Abigail Williams, a vivacious teenager, used to work for John and his wife, Elizabeth. Abigail and John had been involved in an adulterous affair. When Elizabeth discovered this, she banished Abigail from her home. In the interim, John has had no contact with Abigail and this is the first time they are alone in one another's company after her shameful dismissal.
Abigail is deeply infatuated with John and wishes to resume their relationship. He clearly still has a soft spot for her and she knows this. She believes that there is still, in this context, an opportunity for the two of them to reunite. Abigail desperately beseeches John to come back to her, but he resists her advances, pushing her away. When she persists, he says the following:
Abby, I may think of you softly from time to time. But I will cut off my hand before I’ll ever reach for you again. Wipe it out of mind. We never touched, Abby.
John's disclaimer infuriates Abigail, but he stubbornly refuses to acknowledge that they had had a physical relationship. Abigail is enraged and blames Elizabeth for keeping them apart, whereupon John angrily warns her not to refer to his wife. Abigail persists and accuses Elizabeth of blackening her name in the village. John threatens her with a whipping. The altercation ends with Abigail accusing John of putting knowledge in her heart and of being a hypocrite, saying that even though his past acts and feelings for her may be sinful, he still loves her. John storms out.
This incident informs Abigail's motivation to get rid of Elizabeth out of vengeance and to get John back, and culminates in the tragic arrests of both Proctors later in the play.