ORDER T.P. Naik, J. 1. This is an application under Article 226 of the Constitution directed against an order of the Board of Revenue dated 31st March 1956 passed in proceedings arising out of the C.P. and Berar Municipalities Act, 1922 (II of 1922) for the refund of octroi tax. 2. The facts relevant for understanding the controversy may shortly be stated as follows-The Petitioner is the Municipal Committee, Champa, while the Respondent No. 1 (hereinafter called the Respondents) Moolji Sikka and Co. are Bidi merchants of Champa. They cany on business of importing Bidi leaves, tobacco and other articles necessary for the manufacture of Bidis and exporting them outside the municipal limits lor the purpose of getting them manufactured. They also import manufactured Bidis into the municipal limits and export them from time to time as and when occasion arises. 3. In the course of their business the Respondents imported dutiable articles and paid octroi tax on their import on various dates. The total payments in respect of octroi tax for the period 1-9-1948 to 23-8-1951 amounted to Rs. 21,145/15/9. It is not disputed that under the C. P. and Berar Municipalities Act and the Rules made thereunder, they (the Respondents) are entitled to a refund of octroi tax paid by them at the time of their import when they export those goods outside the municipal limits. The Respondents, therefore, applied for the refund of octroi tax due to them from time to time, but the Municipal Committee (the Petitioner) has rejected their claims vide their memorandum No. 26/9 dated 8-12-1953 on the ground that the Respondents had failed to comply with rules 29 and 30 of the rules pertaining to refund of octroi tax. The Sub-Divisional Officer in appeal agreed with the order of the Municipal Committee rejecting the Respondents' applications for refund. There were various orders and a consolidated appeal was filed before the Sub-Divisional Officer who also passed one consolidated order disposing of all the appeals. The order of the Sub-Divisional Officer was then challenged before the Board of Revenue who by its order dated 31st March 1956 has upheld the claim of the Respondents to a refund holding that rules 29 and 30 which govern the refund of octroi tax are not imperative in their character so that the Respondents were entitled to refund provided they had substantially complied with the rules. The Board also held that there had been a substantial compliance of the rules, entitling the Respondents to the refund claimed by them. They further held that the Municipal Committee had acquiesced into the somewhat unusual procedure which had been adopted by the Respondents in the maintenance of their registers. On the question of limitation the order of the learned Member of the Board of Revenue was that only such claims of the Respondents were to be considered by the Municipal Committee as were preferred within 31/2 months of the export of the articles by them. 4. All these findings are challenged before us. The first contention of the learned Counsel for the Petitioner Municipal Committee is that under Section 85(2) of the C P. and Berar Municipalities Act, no refund shall be claimable by any person otherwise than in accordance with the provisions of the Act and the rules made thereunder. He, therefore, contends that as these rules have been made under the C.P. and Berar Municipalities Ac they become part of the Act and assume the mandatory character, which the section has. Crawford in his Statutory Construction at page 104 says- A statute, or one or more of its provisions, may be either mandatory or directory. While usually in order to ascertain whether a statute is mandatory or directory, one must apply the rules relating to the construction of statutes; yet it may be stated, as a general rule, that those whose provisions relate to the essence of the thing to be performed or to matters of substance, are mandatory, and those which do not relate to the essence and whose compliance is merely a matter of convenience rather than of substance, are directory. Similarly. Maxwell in his Interpretation Statutes (10th Edition, page 375) says- The reports are full of cases dealing with statutory provisions which are devoid of indication of intention regarding the effect of non-compliance with them. In some of them the conditions, forms, or other attendant circumstances, prescribed by the statute have been regarded as essential to the act or thing regulated by it and their omission has been held fatal to its validity. In others, such prescriptions have been considered as merely directory, the neglect of which did not effect its validity or involve any other consequence than a liability to a penalty, if any were imposed, for breach of the enactment. 5. In others, such prescriptions have been considered as merely directory, the neglect of which did not effect its validity or involve any other consequence than a liability to a penalty, if any were imposed, for breach of the enactment. 5. In Corpus Juris Secundum, Vol. 67, S.113, page 400, it is stated: ... statutes directing the mode of proceedings by public officers, designed to promote method, system, uniformity and despatch in such proceeding, will be regarded as directory if a disregard thereof will not injure the rights of parties, and the statute does not declare what result shall follow non-compliance therewith, nor contain negative words importing a prohibition of any other mode of proceeding than that prescribed.... 6. Coming now to the rules framed by the State Government exercise of the powers conferred on them under Sections 71, 76 and 85 of the C. P. and Berar Municipalities Act, 1922, we find that the rules as prescribed cannot possibly be applicable for all varieties of circumstances and contingencies. They also give a wide latitude to the Municipal Committee and its Assessees to depart from them at their discretion. 7. Under Rule 9 (c) (1) when dutiable goods are to be imported within the municipal limits, the Moharrir on duty has to call upon the person in charge of the dutiable goods to declare whether they are intended for consumption or use within the municipal limits, or for immediate export beyond the limits, and to give their weight, description and, where necessary, their value. Rule 10 then prescribes how the duty is paid but Rule 10 (b) says-' The Committee may, subject to such Conditions and safeguards as may be found necessary in each case, permit in writing any trading of manufacturing firm to import dutiable articles without paying duty at the outpost. In such cases, the duty shall be paid at the central octroi office at such limes and at such intervals as the committee may prescribe.(underlining is ours). It would thus be seen that the Committee has been given a wide discretion subject to such conditions and safeguards as may be found necessary in each case to permit a trader or a manufacturer importing dutiable articles with in the municipal limits to pay it at such times and at such intervals as the Committee may prescribe. It would thus be seen that the Committee has been given a wide discretion subject to such conditions and safeguards as may be found necessary in each case to permit a trader or a manufacturer importing dutiable articles with in the municipal limits to pay it at such times and at such intervals as the Committee may prescribe. In the instant case, the Respondents had also been granted the aforesaid concession in that they were permitted to pay octroi tax on goods imported within 15 days of their import. 8. The rules dealing with refund are rules 22 and onwards. Rule 22 prescribes that 'on the exportation of dutiable goods outside municipal committee 1 mi s,(sic) the exported shall be entitled to a refund of duty equal to 7/8ths of the duty paid on them at the time of their import'. The rule is followed by a number of clauses providing for the exceptions and conditions subject to which the refund would be claimable. Sub-rule (b) provides a period of limitation, it says: no refund shall be given if the amount to be refunded be less than one rupee or if the claim be made after expiry of three months from the date on which the refund became due; Rules 23 and 24 deal with the method of computing the refund. Rules 25 to 28 provide regarding the hours at which the application be presented and sundry other miscellaneous matters. Then come rules 29 and 30 with which we are directly concerned and which for the sake of convenience may now be reproduced: 29. Applications for refunds shall be made in the prescribed form, copies of which may be obtained free of charge at the central office, branch offices and the railway outposts. The exporter shall make the necessary entries in the form and after signing and dating the same, shall present it at the office authorised to receive such applications. No application for refund shall be received unless it is made by the exporter himself or by a person authorised by him in writing in this behalf. A separate application shall be made by each exporter for his own goods and the refunds shall not be paid to more than one exporter on a single application nor shall consignments be clubbed together to bring the amount of refund above the limit of Re. A separate application shall be made by each exporter for his own goods and the refunds shall not be paid to more than one exporter on a single application nor shall consignments be clubbed together to bring the amount of refund above the limit of Re. 1/- laid down in Rule 22 (b). Explanation: One application shall be sufficient for a single consignment, whether it contains goods for one description or more. If the consignment contain goods of different descriptions they shall be separately detailed in the application The exporter, however, will not be entitled to a refund of duty on goods of any single description on which the octroi be less than one rupee. 30. On receiving an application under the preceding rule, and on the arrival of goods intended for export, the octroi superintendent or any officer appointed by the committee in this behalf, after satisfying himself that the goods agree with the details in the application, shall calculate the amount of the refund to be paid. From this application a refund challan shall be prepared and shall be returned to the exporter after it has been entered in the refund register. The exporter, accompanied by peon, will take the goods beyond the notified area committee, Champa. 9. If we examine the scheme of the refund as obtainable from the rules, it would be found that broadly speaking the procedure is as follows: (1) The application shall be made in the prescribed from (Rule 29). (2) It shall be presented at the central office between 11.30 a. m and 2 30 p. m. on all working Gays except Sundays and holidays (Rule 25). (3) On receiving the application and on arrival of the goods intended for export, the octroi superintendent, after satisfying himself that the goods agree with the details of the application, shall calculate the amount of refund to be paid. From this application a refund Challan shall be prepared and returned to the exporter after it has been registered in the refund register. The exporter accompanied by the goods will take the goods beyond the municipal limits Rule 30). (4) The challan with the goods shall be presented at the exit post within the prescribed time (Rule 31). (5) The moharrir at the exit post shall See that the goods agree with those mentioned in the challan and have been presented within the prescribed time. (4) The challan with the goods shall be presented at the exit post within the prescribed time (Rule 31). (5) The moharrir at the exit post shall See that the goods agree with those mentioned in the challan and have been presented within the prescribed time. He shall, if satisfied on the aforesaid points, fill up and sign the certificate on the challan and return it to the exporter to obtain a refund (Rule 32) (6) If goods are not presented at the exit post within the prescribed time, they have to be reverified (Rule .33). (7) When goods are exported by railway the procedure prescribed in Rule 34 has to be followed. (8) Rule 35 provides that special concession may be given by the Municipal Committee to recognized merchants and traders in the matter of obtaining a refund pass (9) Rule 26 says that applications for refund shall be dealt with promptly. 10. It will be apparent from the rules that though some rules like Rule 22 (a), (b), (c) and (d) are meant for strict compliance and are mandatory, others like rules 25 to 36 are designed to promote method, system, uniformity and despatch and for public convenience. They prescribe a workable procedure to be followed for regulating the grant of refund as well as for checking fraudulent applications for refunds. Under the circumstances it would be improper to make a fetish of them. In Pratap Singh v. Shri Krishna Gupta AIR 1956 SC 140 setting aside the judgment of this High Court wherein it had been he'd that any failure to comply with any of the provisions set out in the various rules was fatal, the Supreme Court said: We do not think that is right and we deprecate this tendency towards technicality; it is the substance that counts and must take precedence over mere form. Some rules are vital and go to the root of the matter; they cannot be broken; others are only directory and a breach of them can be overlooked provided there is substantial compliance with the rules read as a whole and provided no prejudice ensues; and when the legislature does not itself state which is which judges must determine the matter and, exercising a nice discrimination sort out one class from the other along broad based, common-sense lines. 11. 11. Examining the rules on broad-based common-sense lines, we are of opinion that they are not of the essence and their compliance is only a matter of convenience and despatch It is also appa(sic) that though the rules are varied and detailed they do not prescribe lor all eventualities and circumstances. They are also liable to exemptions and exceptions at the discration of the Municipal Committee. This again makes them incapable of strict compliance on pain(sic) any penalty. Take for instance the case of a person Who his been given the concession under Rule 10 (b). The rules envisage that the refund becomes due when the goods are exported because according to rules when the goods are presented at the exit post with the challan preparted by the Octroi Superintendent, the Moharor(sic) on being satisfied that the goods correspond with the challan, gives the exporter a certificate on the challan which entitles him to claim a refund. But what happens, when because of the concession, the duty has not been paid, at the time when the goods are taken out for export. The rules do not provide for such a contingency and we refuse to believe that it could have been the intention of the Act ana the rules to allow the refund of a tax which had not been collected, by giving a certificate of refund on the challan at the time of the exporting of goods. Similarly, the limitation prescribed for the refund under Rule 22 (b) is three months from the date when the refund became due. Now if the refund became due in terms of the rules when the goods were exported, the period of limitation would start from the date of the export. This interpretation would take no note of the cases of the concessionaires who may not be entitled to a refund when they export the goods by reason of the fact that the tax in respect of them had not been paid. For them the cause of action for the refund would arise when the tax has been paid on those different dates. Were it otherwise, cases can be imagined where by giving a concession of three months or over, the Municipal Committee could defeat the claim of exporters for refund altogether, which could never have been the intention of the Act. 12. Were it otherwise, cases can be imagined where by giving a concession of three months or over, the Municipal Committee could defeat the claim of exporters for refund altogether, which could never have been the intention of the Act. 12. Apart from the aforesaid considerations which show that the rules are only a guide which have to be followed more in the spirit than in the letter, there are other considerations also which support our conclusion regarding the directory character of the rules. 13. The language used in the Rule 29 is not in a negative form. It only gives a positive direction that the "applications for refunds shall be made in the prescribed forms". It does not say that "no application for refund shall be made except in the prescribed form", nor does it provide any penalty for a breach in use of the prescribed form. It would under the circumstances be most unreasonable to hold that the right to refund would lipse or be lost in the event of their non compliance. 14. The rules only provide a procedure for claiming a refund which is due to a trader when he exports the imported goods on which octroi had been paid by him. So that, on the one hand, care should be taken to see that the merchant does not get a fraudulent refund, but, on the other fund, it should also be seen that the Municipal Committee does not unjustly enrich itself. It is vehemently contended that the rules are designed for the purpose of ascertaining that there was really an export of the imputed goods and that unnecessary time of the parties and the authorities was not wasted in verifying claims for refund, thereby causing serious inconvenience and loss of public time. But there seems to be some misapprehension here. The rules only provide for verification of the goods sought to be exported by comparing the goods with the details mentioned in the application. The refund challan is prepared on the basis of the application only. (See Rule 30). The Moharrir at the 'exit post' again verifies if the goods correspond with those mentioned in the challan (See Rule 32). It appears that for the purpose of ascertaining that the goods exported were those imported, the declaration of the merchants is accepted. The refund challan is prepared on the basis of the application only. (See Rule 30). The Moharrir at the 'exit post' again verifies if the goods correspond with those mentioned in the challan (See Rule 32). It appears that for the purpose of ascertaining that the goods exported were those imported, the declaration of the merchants is accepted. But whatever that be, the verification of the goods as those which were imported is neither provided for nor insisted upon in these rules, which are concerned only with the fact whether the goods correspond with the application for refund or with those in the challan If anything, the method adopted by the parties in the instant case would serve the purpose insisted upon by the learned Counsel for the Petitioner better. 15. In this case, the complaint is that the Respondents did not present any application for refund in accordance with form No. 43 and did not obtain a refund voucher in form No. 45 at the time the goods claimed to have been imported previously were exported out of the municipal limits. It was conceded at the bar that at the relevant time form No 45 which is one of the forms prescribed in the rules for claiming a refund was not available at the municipal office, and the Board of Revenue has pointed out in its order in paragraph 11 (i) how the form No. 45 even if available Would have been inapplicable to the Respondents' case because the form was suitable for the cases of such persons only who were exporting the goods after having paid import duty on it earlier. It may also be noted, apart from the contention of the learned Counsel for the Petitioner, that the finding of the Board of Revenue was that adverse inference must be drawn against the Municipal Committee for not producing the stock register of forms which would have negatived the Respondent's contention that the forms requisite for complying with rules 29 and 30 were not available in the Municipal Committee at the relevant time. So far as form No. 43 as concerned, though its applicability to the case is also doubtful, the Respondents have in fact used that form though in view of the fact that they were persons to whom a concession under Rule 10 (b) had been granted, they had altered it to suit their case. So far as form No. 43 as concerned, though its applicability to the case is also doubtful, the Respondents have in fact used that form though in view of the fact that they were persons to whom a concession under Rule 10 (b) had been granted, they had altered it to suit their case. We have perused the forms and we do not feel satisfied that these can appropriately be used by persons to whom concessions have been granted under Rule 10 (b). 16. The Board of Revenue have also found that there was an arrangement between the Municipal Committee and the Respondents for a fairly long time whereunder a strict compliance of rules 29 and 30 was not insisted upon by them: The registers maintained by the applicant, as produced before me, bear the signature of the octroi moharrir on the entries of imports and exports. It is really the certificate of the octroi moharrir which is vital in the challan in form No. 45. It is this certificate that shows that the goods were actually exported and that they bore the description given in the challan. There is another register called the register of refund in form No. 44 which the Municipal Committee has to maintain. A perusal of this form would show that when a person applies in form No. 43 for challan (Form No. 45) he has to give certain particulars and these particulars are copied out in the register in form. No. 44 to be maintained by the Municipal Committee. If the applicant had not supplied these particulars, the Municipal Committee should have refused the export because they could not have completed their register in form No. 44. The fact that the applicant continued to export their goods in large quantities from 1948 to 1951 could not have possibly escaped the notice of the Municipal Committee. If the applicant did not present applications in form No. 43, the octroi office would have been prevented from filling in the register of refund in form No. 44. In that event, there would have been only two possibilities, namely. (1) either the register of refund would not have been maintained by the Municipal Committee, or (2) that important columns would have remained blank all these three years. In either case, the matter could not have remained without the notice of the Municipal Committee. In that event, there would have been only two possibilities, namely. (1) either the register of refund would not have been maintained by the Municipal Committee, or (2) that important columns would have remained blank all these three years. In either case, the matter could not have remained without the notice of the Municipal Committee. The applicant have categorically asserted that counterpart of the register maintained by them was also maintained by the octroi moharrir and bore their agent's signatures as did their register bear the octroi moharrir's signatures. I am rather inclined to believe the story of the applicant because it was in the firm's interest to see that the octroi moharrir did maintain a record of the exports under the signatures of the firm's agent so as to ensure their claim for future refund. If the counterpart registers have not been produced before the Court, it is a matter from which an adverse inference may well be drawn against the Municipal Committee; (3) Another document relevant in this connection is the resolution of the Municipal Committee, No. 19 dated 9-8-1949 which inter alia says.- The report of the Octroi Inspector dated 2 2-1949 appears as an endorsement on the firm's claim for refund dated 24-1-1949 this report says- Evidently, this report shows that a register was maintained by the octroi moharrir relating to exports by the firm and which has been referred to by the latter as counterpart of the registers produced before me'. We directed the Municipal Committee to produce the relevant registers and they amply bear out the findings of the Board. We therefore agree that the finding of the Board that the Municipal Committee had acquiesced, due to the special circumstances of the applicant firm, in the maintenance of duplicate registers as stated by the firm, (and that) the information available in these registers is substantially the same which would have been furnished if prescribed forms 'had been used" is correct and needs no interference. The learned Counsel for the Petitioner contended that it could not be so because in the letter dated 30-12-1948 the Municipal Committee had informed the Respondents that they were bound to adhere strictly to rules 29 and 30 for claiming a refund. The learned Counsel for the Petitioner contended that it could not be so because in the letter dated 30-12-1948 the Municipal Committee had informed the Respondents that they were bound to adhere strictly to rules 29 and 30 for claiming a refund. This letter must have been considered by the Board because the Petitioner in its petition says so and on a perusal of the registers which we had sent for, we also find that the officers of the Municipal Committee had signed those registers even after the aforesaid date which established that the practice was acquiesced into by the Municipal Committee for a fairly long time. At any event, this was a finding of fact by the Board and we sitting in the extraordinary jurisdiction under Article 226 of the Constitution ought not to interfere with such a finding of fact. 17. Reliance was also placed on the decision of the Privy Council in Nazir Ahmad v. The King Emperor ILR 17 Lah. 62 PC but in our opinion this is not a case where the principle therein laid down can be said to be applicable. 18. Looking to all the circumstances of the case, we are of opinion that the rules were directory and not mandatory and that a substantial compliance thereof was all that was necessary. We agree with the learned Member of the Board of Revenue that the acceptance of the Respondents' registers would not adversely affect the rights of the Municipal Committee while their non-acceptance would cause substantial injury to the Petitioner and would result in nullifying the rights of the Respondents of getting a refund to which they were in law entitled. 19. A short question regarding limitation may now be considered. We have already pointed out the inapplicability of the ordinary interpretation of Rule 22 (b) to the case of the Respondents. The 'earned counsel for the Petitioner contended that 'refund became due' when the goods were expotted. The learned Member of the Board of Revenue has come to the conclusion that in the cases of concessionaries the limitation would run from the date of the payment by them. Its interpretation, in our opinion, is correct. The 'earned counsel for the Petitioner contended that 'refund became due' when the goods were expotted. The learned Member of the Board of Revenue has come to the conclusion that in the cases of concessionaries the limitation would run from the date of the payment by them. Its interpretation, in our opinion, is correct. The 'refund became due' in cases of concessionaries who had already paid the octroi tax before exporting the goods, at the time of the export, but where they had not so paid the tax, before exporting, on their paying the octroi tax due from them which on account of the concession granted to them, they pud later, sometime during the period of the concession. The learned Member of the Board of Revenue assumed that the concessionaries paid the tax on the last day of the period of their concession, and on its basis held that for the Respondents who had been given the concession of paying the tax in 15 days, the period of limitation would be 31/2 months. This is incorrect. The period shall have to be calculated in respect of each export from the date the payment was actually made by them provided the export was before the tax had been paid. 20. The Board of Revenue has given a direction that the Municipal Committee should re-examine the claim of the Respondent firm in the light of the observations made by it and, in our opinion, in the view we take of the matters viz. that the rules were only directory and not mandatory, no interference under Article 226 of the Constitution is called for except to the extent of clarifying the statement in paragraph 15 (3) of its order regarding the method for computing limitation for the Respondents' claim for refund. 21. The petition fails and is dismissed with costs. Counsel's fee Rs. 100/. The outstanding amount of the security deposit, after deduction of costs, shall be refunded to the Petitioner. Petition dismissed