Judgment :- 1. The Kerala Abkari Act, the Rules and notifications, made and issued thereunder enable the export of Indian made foreign liquor from bonded distilleries/wharehouses in this State to places outside this State. The short question is whether the slightest delay in the production of the verification certificates from the Excise authorities of the importing State can alter the rate of excise duty even in case where, before the demand is made, there is proof that the liquor has been exported and delivered in another State. 2. This appeal is by the State, aggrieved by the decision of a learned Single Judge quashing the demand and the proceedings for recovery of excise duty from the petitioner, M/s. Mc. Dowell & Co. Ltd. The brief facts are these. The petitioner engaged in the business of distilling blending, compounding and bottling of Indian made foreign liquors in this State bad valid licences and permits issued by the Excise department from time to time under the Kerala Abkari Act and the Rules made thereunder. They obtained the necessary permits to export Indian made foreign liquor, from their bonded distilleries and warehouses in this State to places outside the State. It is now admitted that during the years 1977-1983, 839 cases of Indian made foreign liquor were exported by the petitioner to some of the States outside Kerala on the strength of valid export/ transport permits, and after executing the necessary bonds, and producing the required "no objection certificates" from the Excise authorities of the importing State, and after pre¬payrnent of duty at the rate of 50 paise per proof litre. It is not in dispute that liquor was delivered in the other States and the excise officers bad issued necessary verification certificates. These certificates have since been produced before the authorise in this State also. Under the relevant notification, verification certificates from the excise authorities of the importing State had to be produced within fifteen days/forty two days of verification, in the importing State. The excise authorities demanded excise duty from the petitioner for these 839 cases at the rate of Rs. 14/- per proof litre and initiated revenue recovery proceedings in 1983 on the ground that the verification certificates were not produced during the currency of the export permit. The excise authorities demanded excise duty from the petitioner for these 839 cases at the rate of Rs. 14/- per proof litre and initiated revenue recovery proceedings in 1983 on the ground that the verification certificates were not produced during the currency of the export permit. The petitioner therefore approached this Court under Art.226 of the Constitution of India for quashing the excise demands and the notice issued under the Revenue Recovery Act, contending that there was do legal basis for insisting (a) that the verification certificates should have been produced within fifteen days of the date of export; and (b) that they should have been produced during the currency of the export permit. The State supported the demands asserting that these two contentions had to be fulfilled for earning the right to pay excise duty at the reduced rate of SO paise per proof litre. 3. The learned judge held that the relevant notification issued under the Kerala Abkari Act did not insist that the verification certificate from the excise authorities of the importing State should be produced within forty two days "of the date of export" or during the "currency of the export permit" and the notification only insisted that the verification certificates should be produced "within forty two days of verification in the importing State". The learned judge held thus: " ...The view taken by the State, that the period is forty two days from the date of export, finds no support on the language of the notification or on principle As long as it is permissible to export even on last day of currency of export permit, so long, it is not possible to produce a Certificate (to be issued on verification) within the currency of export permit. Issue of Verification Certificate cannot be contemporaneous with export Verification necessarily implies the exported commodity reaching the destination, the concerned authorities making physical verification, and then issuing a certificate. The concept of currency, is alien to the Notification" The Writ Petition was therefore allowed and the demands quashed on the ground that they were based "on an erroneous understanding of law, relying on two untenable concepts" 4. The learned Advocate-General appearing for the State in this appeal rightly does not challenge the reasoning and conclusion of the learned Judge. The concept of currency, is alien to the Notification" The Writ Petition was therefore allowed and the demands quashed on the ground that they were based "on an erroneous understanding of law, relying on two untenable concepts" 4. The learned Advocate-General appearing for the State in this appeal rightly does not challenge the reasoning and conclusion of the learned Judge. He has no case before us that the verification certificates should have been produced within forty two days from "the date of export" or "during the currency of the export permit". These are not the conditions prescribed by the notification. But a new contention is advanced at the appellate stage by the State a ground not relied on by the department when the demand was made-that where the verification certificates were not produced within fifteen days or forty two days, as the case may be, from the date of verification, as prescribed by the notification, the duty that is demanded in respect of these cases of liquor is valid in law. The State has filed as affidavit in this Appeal stating the relevant particulars as follows: Table:#1 Thus according to the State 265 cases were supported by verification certificates, which were produced in time, within fifteen days. However, regarding 428 cases these verification certificates were produced beyond fifteen days, but before forty two days and in 146 cases these certificates were produced beyond forty two days. Shri K. K. Venugopal. Senior counsel appearing for the petitioner, did not object to the State raising this fresh ground and submitted that he is prepared to meet this legal question. The facts, as stated by the Government in the affidavit filed before us, not being disputed, the contention advanced by the learned Advocate General rests on an interpretation of the relevant notification. We therefore propose to consider mainly this question in this Writ Appeal; the only question that is raised before us, namely, whether the delay in the production of the verification certificate attracts the higher duty of Rs. 14 per proof litre, and whether the quantities of liquor in categories B and C of the affidavit, i. e., 574 cases, are liable to excise duty only at the rate of fifty paise per proof litre. 5. 14 per proof litre, and whether the quantities of liquor in categories B and C of the affidavit, i. e., 574 cases, are liable to excise duty only at the rate of fifty paise per proof litre. 5. Under the Kerala Abkari Act, S.17 provides that a duty of excise shall, if the Government so direct, be levied on all liquor and intoxicating drugs; (a) permitted to be imported; or, (b) permitted to be exported; or, (c) permitted to be transported; or, (d) manufactured under any license; or, (e) manufactured at any distillery, brewery, winery or other manufactory established under the Act; or (f) issued from a distillery, brewery, winery or other manufactory or warehouse licensed or established: or, (g) sold in any part of the State. S.18 (3) states that the duty of excise shall be levied at such rates as may be fixed by the Government from time to time by notification in the gazette not exceeding Rs. 20/:per proof litre regarding Indian made foreign liquors. The maximum rate of duty alone is mentioned in the Act. On March 18,1961 the Government issued a notification under S.17 of the Act under which 45 paise per proof litre of duty was levied on Indian made foreign spirits (except Indian made foreign spirits consumed by defence services) when exported by distillers to Goa and not reimported into this State, in case the terms and conditions specified thereunder are satisfied. We are not concerned with this notification, for, there was no exports to Goa and this notification has been subsequently amended It is the stand of the Government, and it is disputed that Indian made foreign liquor manufactured in this State was allowed to be exported to other States only from 1977. On 4-10-1977 the earlier 1961 notification was modified and item (1) was substituted thus: There was an amendment to this notification on 5-2-1980 when in sub-item (iv) regarding the verification certificate the following words "or within such further time as the Excise Commissioner may allow for sufficient cause" were added. On 4-10-1977 the earlier 1961 notification was modified and item (1) was substituted thus: There was an amendment to this notification on 5-2-1980 when in sub-item (iv) regarding the verification certificate the following words "or within such further time as the Excise Commissioner may allow for sufficient cause" were added. Though export to other States was thus allowed by the notification dated 4-10-1977, it was reported to the Government "that it has been found often not possible to obtain the verification report within the time in respect of exports to distant and far off places", the Board proposed "that the time limit for submission of verification report may be extended to three months". The Government soon after, on 27-10-1977 by an executive order amended the instructions issued in the Excise Manual Vo . II and directed thus: "Government have examined the proposal of the Board and they are pleased to order that the time limit for receipt of the verification report of liquor exported from the Excise authority of the receiving end will be extended to six weeks instead of the existing time of 21 days and the Manual amended accordingly." Thus even while the notification of 4-10-1977 was in force, and the time limit was only fifteen days, the Government had administratively directed that the verification certificate can be produced within 21 days, Manual was amended by the Government order referred to above. It was only after 10 years later that the statutory notification was amended and the words "within forty-two days" were substituted for the words "within fifteen days". That was done only on 25-7-1987. In the Explanatory Note to that amendment the Government stated thus: "(This is not part of the amendment, but is intended to indicate its general purport). The Government have decided to impose an export duty on Indian made foreign liquor manufactured in the State and permitted to be exported to other States. G.O.(P) 112/77/TD dated 4-10-1977 has been issued to that effect. But it is seen that it is not possible to fulfill all the first three conditions in the said Notification, together in all cases. The Government have already decided to enhance the period of production of verification certificate to 42 days. This notification is intended to achieve the above object." 6. But it is seen that it is not possible to fulfill all the first three conditions in the said Notification, together in all cases. The Government have already decided to enhance the period of production of verification certificate to 42 days. This notification is intended to achieve the above object." 6. The Board in implementing the Government's direction have issued a slightly modified direction thus: "In the circumstances, all subordinate Officers are strictly directed to see that the period of validity for each permit issued by proper authority shall not exceed six weeks instead of the existing time of 21 days insisted on in the Excise Manual Volume II." The Board's direction resulted in the time limit being geared to the period of validity of export permit which was not in contemplation under the Government order dated 27-10-1977 or supported by the statutory notification. It is because of this Board's order that the subordinate officers of the department thought that the verification certificates have to be produced within 15 davs/42 days of the date of export and that it should also be during the currency of the permit. Now as the State has rightly, on a correct interpretation of the statutory notification, taken the stand that the time for production of the verification certificate has to be calculated "from the date of verification of the importing State" and not from the date of export or of the currency of the permit, the wrong direction issued by the Board on a clear misunderstanding of the Government Order dated 27-10-1977, need not detain us. 7. Thus the time limit for production of verification certificate was fifteen days as per the statutory notification dated 4-10-1977. Time was extended to 21 days and later to 42 days, by administrative instructions from 27-10-1977. Time could be extended by the Commissioner for sufficient cause from 5-2-1980. On 25-7-1987 the notification was also amended substituting the period, fifteen days as forty two days. 8. Manufacture of liquor is allowed in many States and export and import of Indian made foreign liquor from one State to another are also permitted. Time could be extended by the Commissioner for sufficient cause from 5-2-1980. On 25-7-1987 the notification was also amended substituting the period, fifteen days as forty two days. 8. Manufacture of liquor is allowed in many States and export and import of Indian made foreign liquor from one State to another are also permitted. In the matter of collecting excise duty a consensus has been reached by the States or a convention is followed so that the same quantity of liquor manufactured in one State need not be subjected to duty twice, once in the exporting State and another in the importing State. Thus while the liquor manufactured in Kerala and exported to another State is liable to the reduced rate of excise duty in Kerala, the quantity of liquor which is received by the importing State is still liable to excise duty at the rates current in the importing State. This aspect is also no longer in dispute. Regarding the duty that is payable in respect of liquor manufactured in this State and exported by distilleries to other States and not reimported into this State, the rate of duty is SO paise per proof litre, in case the terms and conditions mentioned in the notification are satisfied. While there is no dispute in this present case that conditions (i) to (iii), (v) and (vi) are satisfied, the only dispute is whether condition (iv) regarding production of verification certificate has been fulfilled regarding the 574 cases of liquor exported during the relevant period. 9. This controversy therefore takes us to the question whether the provision in the notification regarding time for production of verification certificate is mandatory or directory. If it is mandatory, the petitioner is bound to fulfill those conditions and as this condition has not been satisfied in respect of 574 cases the petitioner was bound to pay excise duty at the rate of Rs. 14 per proof litre, and the demands issued to that extent are justified. On the other hand, if it is only directory, substantial compliance alone is required. 14 per proof litre, and the demands issued to that extent are justified. On the other hand, if it is only directory, substantial compliance alone is required. In respect of 574 cases it is admitted that before demands were made, the verification certificates from the importing State bad been produced before the Excise authorities and therefore there was substantial compliance with the condition in item 1 (iv) also and the petitioner would be liable to pay only at the rate of fifty paise per proof litre, which they have paid, and the demands made at the rate of Rs. 14 per proof litre will be clearly illegal. The main question that arises for determination in this Writ Appeal is whether item 1 (iv) of the notification issued on 4-10-1977 as amended on 5-2-1980 and 25-7-1987 relating to the time for production of the verification certificate is mandatory or directory. 10. The learned Advocate General appearing for the State contends that the liability to pay excise duty at the rate of 50 paise per proof litre arises only if the conditions specified in the notification are satisfied. This, according to him, is clear from the notification itself which provides that the rate of duty at the rate of 50 paise per proof litre is for Indian made foreign spirits when exported by distillery to other States and not reimported into this State "in case where the following terms and conditions are satisfied". This is a mandatory provision, compelling strict obedience and the right to pay excise duty at a reduced rate does not arise unless the conditions are fulfilled. Moreover, according to him, there can be no ambiguity in a taxing statute and the notification, as part of the Act, under S.69, leaves no room for doubt regarding the circumstances and the conditions under which the reduced rate of excise doty is available. He submitted that while there cannot be any doubt about the intendment of a taxing statute and there can be no equity in a taxing measure, there is no scope for any construction of the notification as to whether any of its provisions is mandatory or directory, as the language employed is clear and precise to convey the meaning intended. 11. 11. On the other band Shri. K.K. Venugopal, Senior Counsel appearing for the petitioner (the first respondent in this Appeal) submitted that excise duty is a duty on manufacture or production and while S.17 creates the charge, it is levied "if the Government so direct". The Act also authorises id S.18 for fixation of rates of duty subject to the maximum limit prescribed therein. In exercise of the powers so conferred, the Government have directed that the liquor that is manufactured in this State is liable to duty when it is exported. It is the export of the liquor that entitles the exporter to pay reduced rate of excise duty in this State, for, the same quantity of liquor is liable to duty in the importing State as well. This is not a case where liquor exported escapes duty either in this State or in the importing State. It is dutiable in both the States. As the export is the stage when excise duty is levied and this is sanctioned under S.17. it is necessary for the State to obtain the relevant facts for making the assessment and also for ensuring that no duty escapes. With this purpose in view, the notification provides for the procedure for ascertaining (a) the factum of export; and, (b) the quantum exported. The liability is thus fastened only on the actual quantity that is exported. The procedural machinery provided in the notification to effectuate the intent and object of the Act, it is submitted, can only be treated as directory and not mandatory. He quite fairly submitted that be does not contend for the proposition that all the provisions in the notification are only directory. According to him, some may be directory and some may be mandatory. According to him the insistence of the production of a verification certificate is a mandatory provision, for, without the said certificate, the most conclusive evidence available, it will be difficult for the State to decide whether liquor has been actually exported, and if so, what was the quantity so exported. But it is submitted that the time limit for production of the certificate prescribed is only directory, that it requires only substantial compliance. There may be several reasons, some beyond the control of the exporter, for not producing the verification certificates within time. But it is submitted that the time limit for production of the certificate prescribed is only directory, that it requires only substantial compliance. There may be several reasons, some beyond the control of the exporter, for not producing the verification certificates within time. If none of these reasons can be looked into and an assessment was to follow without having the necessary particulars, the assessment and the demand are likely to be labelled as arbitrary and unjust. A construction which leads to such absurd results has to be avoided. It was also submitted that while there can be no intendment, no equity in a taxing statute, that principle only applies to the charging sections and not to the procedural provisions leading to the recovery of tax. The procedural formalities provided in the notification are merely directory intended to effectuate the object of the Act, to collect the duty. He, therefore, submitted that in a case like this where there can be no doubt that the petitioner has exported liquor to places outside this State, where proof was available before the State authorities that the liquor has been exported and there was unimpeachable evidence about the quantity that was exported, there could be no room for doubt on any aspect relating to the imposition of duty on exported liquor. He therefore submitted that the lime fixed for production of verification certificate was only directory. According to him, even the excise department did not understand the provision to be mandatory, when the department itself extended the time limit administratively to 21 days and applied that principle for levying duty on exported liquor, and the Government too extended the period from time to time and eventually the notification itself provided for condonation of delay for sufficient cause. We shall therefore consider these aspects. 12. Viscount Maugham in Punjab Co. op. Bank v. I. T. Commr., AIR. 1940 P. C. 230, 233 held thus: ..It is a well-settled general rule that'an absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially" 13. Two aspects arise for consideration in this context (i) what are the principles to be followed for deciding whether a particular provision in a statute is mandatory or not; and, (ii) whether those principles can be applied to a taxing statute. Two aspects arise for consideration in this context (i) what are the principles to be followed for deciding whether a particular provision in a statute is mandatory or not; and, (ii) whether those principles can be applied to a taxing statute. Fortunately, both these questions do not pose any problem as the matter is covered by the decisions of the Supreme Court. On the first aspect regarding the construction of a statute, whether it is mandatory or directory, we shall refer only to three decisions, one of the Privy Council and two of the Supreme Court. In Montreal Street Railway Company v. Normandin, AIR. 1917 P.C.142, it is held thus: "The question as to whether a statute is mandatory or directory depends upon the intention of the legislature and not upon the language in which the intent is clothed. The meaning and intent of the legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other. The question whether provisions in a statute are directory or imperative has very frequently arisen in this country, but it has been said that no general rule can be laid down, and that in every case the object of the statute must be looked at." This passage was cited with approval by the Supreme Court in M. Karunanidhi v. H.V. Handa, AIR. 1983 SC. 558, 566. A Constitution Bench of the Supreme Court in R.B. Sugar Co. v. Rampur Municipality., AIR. 1965 SC. 895, 899, held thus: "...The purpose for which the provision has been made and its nature, the intention, of the legislature in making the provision, the serious general inconvenience or injustice to persons resulting from whether the provision is read one way or the other, the relation of the particular provision to other provisions dealing with the same subject and other considerations which may arise on the facts of a particular case including the language of the provision, nave all to be taken into account in arriving at the conclusion whether a particular provision is mandatory or directory." Maxwell in the 12th edn. of the Interpretation of Statutes, at page 314, summarised thus: "It is impossible to lay down any rule for determining whether a provision is imperative or directory. of the Interpretation of Statutes, at page 314, summarised thus: "It is impossible to lay down any rule for determining whether a provision is imperative or directory. 'No universal rule', said Lord Campbell, L. C., can be laid down for the construction of statutes, as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed And Lord Penance said: 'I believe as far as any rule is concerned, you cannot safely go further than that in each case you must look to the subject matter; consider the importance of the provision that has been disregarded, and the relation of the provision to the general object intended to be secured by the Act; and upon a review of the case in that aspect decide whether the matter is what is called imperative or only directory." 14. On the second aspect as to whether the rule of construction, whether a provision is mandatory or not, applies to a taxing statute. The entire argument is based on the classical statement of Rowlatt, J. in Cape Branday Syndicate v. Inland Revenue Commissioner, (1921) I K. B. 64, 71, thus: "In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." 15. The contention is therefore advanced that a taxing statute has to be construed only according to the words used or the language employed and not with reference to any intent of the legislature and thus a rule of construction whether a provision in a taxing statute is mandatory or not is foreign to the scope of a taxing statute. But this contention also has to fail in the light of the clear pronouncement by the Supreme Court on the exact question. 16. But this contention also has to fail in the light of the clear pronouncement by the Supreme Court on the exact question. 16. The object of this rule enunciated by Rowlatt, J in Cape Branday Syndicate v. Inland Revenue Commissioner, (1921) I K. B. 64, 71, was explained by the Supreme Court in A. V. Fernandez v. State of Kerala, AIR. 1957 SC. 657 thus: "If the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter." It was further elaborated in Gursahai v. L.T.Commr., AIR 1963 SC 1062,1064 thus: "9. Now it is well recognised that the rule of construction on which the assessee relies applies only to a taxing provisions and has no application to all provisions in a taxing statute. It does not, for example, apply' to a provision not creating a charge for the tax but laying down the machinery for its calculation or procedure for its collection. The provisions in a taxing statute dealing with machinery for assessment have to be construed by the ordinary rules of construction that is to say, in accordance with the clear intention of the legislature which is to make a charge levied effective " Their Lordships of the Supreme Court referred to the decision of the Privy Council in Commr. of I. T. v. Mahaliram Ramjidas, AIR 1940 PC 124,126,127 where interpreting certain provisions of the Income-tax Act it was held thus: "The Section, although it is part of a taxing Act, imposes no charge on the subject, and deals merely with the machinery of assessment. In interpreting provisions of this kind the rule is that that construction should be preferred which makes the machinery workable, ut res valeat potius quant pereat" In the said decision the Supreme Court also referred with approval to the dictum in Allen v. Trehearne. In interpreting provisions of this kind the rule is that that construction should be preferred which makes the machinery workable, ut res valeat potius quant pereat" In the said decision the Supreme Court also referred with approval to the dictum in Allen v. Trehearne. (1938) 22 Tax Cas.15, where it was observed thus: "'the rules to S.45, sub-sections (5) and (6), are rules affecting assessment and collection, and that if there is any difficulty in the precise applicability of the language of those sub-sections, it should be interpreted largely and generously in order not to defeat the main object of liability laid down by R.1 of Schedule E.' " In Associated Cement v. C.T.O., (1982) 1 S.C.R.563, 596, it has been held thus: "It is settled law that a distinction has to be made by court while interpreting the provisions of a taxing statute between charging provisions which impose the charge to tax and machinery provisions which provide the machinery for the quantification of the tax and the levying and collection of the tax so imposed. While charging provisions are construed strictly, machinery sections are not generally subject to a rigorous construction. The courts are expected to construe the machinery sections in such a manner that a charge to tax is not defeated..." 17. A provision in a statute or notification is mandatory or directory dependent on the intent of the legislature. This intention can be gathered from the object of the statute, the purpose for which the provision has been inserted, the setting in which it appears, and the consequences which would follow by adopting a construction one way or the other. This is thus an ordinary rule of construction which, without doing violence to the language used, achieves the object sought to be realised. 18. A distinction, for the purpose of interpretation, has to be made between the charging provisions in a taxing statute and the provisions relating to the machinery for quantification and collection of tax. The charging section has to be construed with reference only to the language employed in the statute, for "there is no room for intendment; there is no equity about a tax; there is no presumption as to a tax" and "nothing is to be read in; and nothing is to be implied". The charging section has to be construed with reference only to the language employed in the statute, for "there is no room for intendment; there is no equity about a tax; there is no presumption as to a tax" and "nothing is to be read in; and nothing is to be implied". Different considerations however arise when the machinery provisions in a taxing measure have to be construed, when the court is not bound to adopt a strict interpretation confining the application of the provision to the letter of the law, but can traverse beyond the language used and ascertain whether the machinery is workable to effectuate the enforcement of the charge created under the Act. The ordinary rules of construction apply to the machinery provisions in a taxing statute and it is open to the court to consider whether any or all the provisions relating to the procedure and the machinery for collection of tax are mandatory or directory. The concessional rate of excise duty under the notification is thus for liquor exported by distilleries to other States and not reimported into this State. The object of the notification was to fix the rate of excise duty on liquor exported and to prescribe the machinery for collection of the duty payable in this State. The excise duty on liquor exported can be fixed only if (a) the liquor has been actually exported; and, (b) the exact quantity which has been exported is known. The notification provides a machinery for this purpose, and prescribes that there should be a verification certificate issued by the Excise authorities of the importing State. The production of verification certificate is absolutely necessary both in the interest of the State and also in the interest of the exporter, for it conclusively proves both the factum of export and the quantum of export. The provision regarding the production of the verification certificate is thus mandatory, for it it necessary to achieve the object of the legislature to realise the entire excise duty and prevent evasion of duty on the liquor exported. 19. The structure and setting of the particulars in the notification or the context and sequence in which they are placed can also be considered. 19. The structure and setting of the particulars in the notification or the context and sequence in which they are placed can also be considered. Four conditions have to be satisfied before export, namely, the export has to be by air, rail, road, or ship, a bond has to be executed, a no objection certificate from the importing State has to be obtained and the duty at the rate of fifty paise per proof litre has to be paid in advance. The export can be effected only on the strength of the export permit issued under the Rules. When once the liquor is exported, it is the duty of the State to ascertain the quantity that has been exported. This is the accounting part in the process of quantification. First, the verification certificate produced will show the quantity received by the importing State. If the quantity tallies with the quantity allowed to be exported, there is no problem. If not, the exporter has to explain for this difference. If the shortage is unaccounted, the notification insists that the duty at the rate of Rs. 14/- per proof litre should be paid in respect of that unaccounted quantity. This is the effect of item 1 (v) in the notification. Thus the quantity allowed to be exported is accounted with reference to the particulars in the verification certificate and the payment of the entire duty in respect of the unaccounted quantity. The time limit fixed for production of the verification certificate is thus a step-in-aid in the process of accounting of the liquor exported. The question as to whether the entire quantity allowed to be exported has been exported, whether the entire quantity has reached the importing State, whether the exporter has paid the full rate of excise duty for the unaccounted quantity, are matters to be decided when the demand for a higher duty, over the fifty paise per proof litre fixed for the exported liquor, is sought to be made. The particulars required for the purpose are thus geared to the time when the demand is made. If before that, the particulars are available, including the verification certificate, the object of the Act and the purpose of the notification aimed to collect the entire excise duty are achieved. The particulars required for the purpose are thus geared to the time when the demand is made. If before that, the particulars are available, including the verification certificate, the object of the Act and the purpose of the notification aimed to collect the entire excise duty are achieved. The production of the verification certificate before demand should be sufficient for the purpose and the time limit fixed for production of the verification certificate requires only substantial compliance, not strict compliance according to the letter of the law. This provision can be construed only as directory. 20. There are also other circumstances to conclude that the time limit for production of the verification certificate could not be treated and was not treated as a rigid rule admitting of no relaxation or extension. Eventhough fifteen days' time was originally fixed when export of liquor to Goa alone was allowed and when export was generally allowed in 1977, the department had granted 21 days time for production of the verification certificate, and in October, 1977, within a month of the statutory fixation of fifteen days, on 27th October, 1977, the Government itself directed that the period can be extended by forty two days. This administrative instruction was gives statutory sanction in 1987. Meanwhile in 1980, the notification was amended giving power to the Excise Commissioner to grant extension of time. Therefore the time factor for the production of the verification certificate did not remain constant even according to the department, and it was a variable factor being changed from time to time depending on several circumstances. The period of 15 days/42 days fixed by the notification for production of the verification certificate was not inflexible and inelastic requiring rigid and strict application. Substantial compliance alone is contemplated. 21. A construction that the verification certificate should, in any ease, be produced within forty two days of the verification may, invariably, be impossible of performance on many occasions where the import is to far off places, as has been reported to the Government even as early as 1977 and the Board recommended that the time limit should be ninety days. Postal delays cannot be ruled out. 22. The fulfilment of this condition does not depend on any act on the part of the exporter, but is dependent on the speed and efficiency of third parties or outside agencies. Postal delays cannot be ruled out. 22. The fulfilment of this condition does not depend on any act on the part of the exporter, but is dependent on the speed and efficiency of third parties or outside agencies. A strict enforcement of the provision regarding the time limit for producing the verification certificate makes the provision unworkable leading to unjust results. The production of the verification certificate is only for proof of export and the quantity exported. If therefore it is unmistakably shown that liquor has been exported, to invalidate the export factor, because proof, though "indubitable" was adduced "a few days later than that prescribed in the notification or in a manner not mentioned therein", is to "make procedure not the handmaid but the mistress and form not as subservient to substance but as superior to the essence": Charles K. Sakria v. C. Mathew, AIR 1980 SC 1230. 23. We have no hesitation in holding that the provision in the notification regarding the time limit fixed for the production of the verification certificate is only directory and not mandatory. It is therefore unnecessary for us to consider whether the forty two days time limit allowed by the Department from 1977-1987 can be permitted only when the notification was statutorily amended on 25-7-1987, whether the amendment was only declaratory or clarificatory in nature; and whether the power to extend the period conferred by the amendment on 5-2-1980 can be exercised for the period 1977-1980 also. 24. On the facts now placed before us it is admitted that all the 839 cages of liquor were exported by the petitioner on the strength of permits/ licenses issued by the State during the years 1977-1983. Before demands were made in 1983, the Excise authorities had before them the verification certificates showing the exact quantity of liquor that has been imported in the other States. If so, the petitioner was therefore liable to pay only at the rate of 50 paise per proof litre. No further demand for excise duty was sustainable under the Act or the notification. The demands were clearly illegal and opposed to Art.265 of the Constitution of India as well, as there is no law which supports these demands. 25. If so, the petitioner was therefore liable to pay only at the rate of 50 paise per proof litre. No further demand for excise duty was sustainable under the Act or the notification. The demands were clearly illegal and opposed to Art.265 of the Constitution of India as well, as there is no law which supports these demands. 25. It was contended that if the provision relating to the time limit for the production of verification certificate is only directory, the provision which enables the Excise Commissioner to grant extension of time for* sufficient cause becomes redundant. As stated already, the verification certificates should have been produced before the demand for excise duty. If they were not produced then, and if there were good reasons for not producing them, it is necessary for the exporter to move the Excise Commissioner for extension of time and it is left to the Commissioner to decide whether there was any sufficient cause shown for extension of time. In the circumstances it cannot be said that the provision which gives the Commissioner jurisdiction to extend the time has become redundant. Occasions my arise when the Commissioner may have to exercise his jurisdiction and condone the delay in producing the certificate. 26. Before we close however we have to deal with some of the preliminary objections raised regarding the maintainability of the Writ Petition by the learned Advocate-General. In this Writ Appeal the Government have filed an affidavit on 13-1-1989 in which all the facts have been stated. Those facts have been admitted by the petitioner. There is no dispute regarding the quantity that is exported by the petitioner during the period 1977-1983 and also the period during which the verification certificates were produced. When those statements made by the Government themselves were accepted by the petitioner, when arguments have proceeded on the admitted facts placed before us by the State itself there is no disputed question of fact on which we can reject the claim of the petitioner. 27. It is next contended that there is considerable delay in filing the Writ Petition, for the demands related to the period from 1977 to 1983 and the Writ Petition filed in 1984 should have been dismissed on that short ground. 27. It is next contended that there is considerable delay in filing the Writ Petition, for the demands related to the period from 1977 to 1983 and the Writ Petition filed in 1984 should have been dismissed on that short ground. The question as to whether relief should be granted or not on the ground of delay or laches is essentially a question of discretion to be exercised by this Court under Art.226 of the Constitution of India. In the present case the learned judge exercised bis jurisdiction in favour of the petitioner, and the learned judge did not find any delay which merited refusal of the exercise of the extra-ordinary jurisdiction. It is also brought to our notice by counsel for the petitioner that in the counter affidavit filed by the State there is no ground taken that the Original Petition was not maintainable on the ground of delay. Moreover it is seen that the first demand was made on 26-12-1978 (Ext. P17 (1)) and the last demand was made on 3-11-1982 (Ext. PI7 (48)). When the first demand was made on 26-12-1978 there was a reply objecting to the same on 30-12-1978 itself. Some of the replies have been produced as Ext. P35 to P 71. Representations were made to the State Government and the Minister as evidenced by Exts. P12 and P14 respectively. There was no response or reply from any of the authorities as to whether the petitioner's explanation as to why it did not produce the verification certificates should be accepted or not. The authorities proceeded on the wrong footing that the verification certificates should be produced within fifteen days "of the date of export" or "during the currency of the export permit". The revenue recovery proceedings were initiated on 28-12-1983, and when coercive steps were thus taken by the authorities on 5-1-1984, the Writ Petition was filed on 24-1-1984. There was thus no delay in the filing of the Writ Petition. Ext. P13 rejecting the petitioner's case was passed without giving any reason and without any application of the mind. 28. The learned Advocate-General submitted that while the challenge is against several demands, none of them was produced, and no relief should have been granted. The demands were produced by the petitioner in an additional affidavit on 20-8-1984, even before the counter affidavit in the Original Petition was filed. 28. The learned Advocate-General submitted that while the challenge is against several demands, none of them was produced, and no relief should have been granted. The demands were produced by the petitioner in an additional affidavit on 20-8-1984, even before the counter affidavit in the Original Petition was filed. The counter affidavit was filed only a year later on 1-11-1985. This ground also cannot be sustained. 29. The last ground urged that the petitioner has an alternative remedy under R.42 of the Kerala Distillery & Warehouse Rules, 1968. R.42 relates to filing of appeal only from the orders issued under those Rules. The order now challenged does not state that it was issued under any of these Rules. These rules do not contemplate the issuance of any such order. The order now challenged is thus not an appealable order under R.42. It has to be noted that the Act and the Rules do not provide for any assessment order, issue of pre-assessment notice, etc., before demanding excise duty. The liquor is manufactured in bonded distillery. The liquor can be/transported/exported only under excise supervision and to another bonded distillery or warehouse. The shortage of liquor, if any, during transport/ export beyond the permissible limits is treated as unaccounted liquor under the Rules, liable to excise duty as on the date of manufacture. In the present case the revenue recovery proceedings were initiated for the realisation of Rs. 4,12,415.07 as demanded in Ext. P17. When the demand was challenged in the Writ Petition, the counter affidavit of the State on 1st November, 1985 admitted "it is however submitted that there has been discrepancies resulting from clerical errors and duplicate demands made by inadvertence " It is also admitted that there has been some mistake in placing the demand at higher rates than the applicable rates in certain cases and the net amount due was Rs. 3,76,54,677.90 and not Rs. 4,12,415.07. Under such circumstances, the plea of an alternative remedy to bar the exercise of the jurisdiction under Art.226 of the Constitution of India cannot stand. The demands now made are clearly illegal and against the provisions of the Kerala Abkari Act, Rules and the relevant notification and violate Art.265 of the Constitution. The correct duty is admittedly paid in respect of the entire 839 cases. There is no further duty payable. The demands now made are clearly illegal and against the provisions of the Kerala Abkari Act, Rules and the relevant notification and violate Art.265 of the Constitution. The correct duty is admittedly paid in respect of the entire 839 cases. There is no further duty payable. There is no merit in this appeal and it has therefore to be dismissed. 30. While the Writ Petition was pending, when the petitioner moved for stay of further proceedings, this Court by its order dated 14-2-1984 in C.M.P. No. 29101 of 1984 directed the petitioner to deposit Rs.1 crore in the Government treasury. The petitioner deposited the amount on 24-2-1984. The learned judge while disposing of the Writ Petition has directed refund of that amount. After this Appeal was admitted, when the Government moved for stay, we directed thus in C.M.P. No. 27192 of 1988: "After hearing the learned counsel for both sides, we make an interim order staying refund of the amount deposited by the respondents in pursuance of the interim order made by the learned Single judge during the pendency of the Writ Petition, subject to the condition that the appellants pay Interest at the rate of 16% per annum, the current Bank rate on the amount of Rs.1 crore deposited by the respondents from 24tb February, 1984 till the amount is returned to the respondents in the event of the appellants failing in this appeal. We further direct that this appeal be listed for final bearing on the 16th January, 1989 at the top of the list subject to part-heard cases". As this appeal is dismissed, the Government is liable to return Rs.1 crore deposited by the petitioner. The question of interest alone remains. 31. The learned judge did not grant any interest when the Writ Petition was disposed of on 6-10-1988, eventhough the claim for interest was pressed. The petitioner has not filed any appeal against this judgment. When we passed the interim order in C. M. P. No. 27192 of 1988 our attention was not pointedly drawn to the fact that the learned judge did not grant any interest. Moreover, we cannot help noticing that when the Original Petition was filed and beard, most of the facts were disputed. When we passed the interim order in C. M. P. No. 27192 of 1988 our attention was not pointedly drawn to the fact that the learned judge did not grant any interest. Moreover, we cannot help noticing that when the Original Petition was filed and beard, most of the facts were disputed. In fairness to the State Government and to the Advocate-General, it has to be pointed out that it is only in this Appeal, after the State filed an affidavit, that the facts became clear and remained undisputed. The petitioner did not also clearly and categorically state in the Writ Petition that the relevant provisions in the notification were only directory. We think that the interim order passed by us in C. M. P. No. 27192 of 1988 in this Appeal requires to be modified and orders have to be passed in the Appeal itself regarding interest. We direct the State Government to return to the petitioner, or adjust in the petitioner's account, the sum of Rs. one crore paid by the petitioner pursuant to the order passed by this Court in C. M. P. No. 29101 of 1984, with interest at the rate of 16 per cent from the date of this judgment, namely, 23-2-1989. This Writ Appeal is dismissed, but in the circumstances of this case without costs.