The main legal point established in the judgment is that the requirement of producing a letter of authorization for goods imported for immediate exportation is not ultra vires Rule 5 and does not prejudice the business of the petitioners.

(Dr. Chandrachud, J.)

Leave to amend in terms of the draft tendered and taken on record. The amendment may be carried out during the course of the week. Verification dispensed with.

2. The First Petitioner is a Company which is engaged in the express package distribution business, more popularly described as a courier service. The Petitioners accept consignments on behalf of consignors for delivery at various destinations within and outside the country. Section 194A of the Mumbai Municipal Corporation Act, 1888 provides for an exemption from octroi of articles which are meant for immediate exportation. Octroi is imposed on goods which are imported into the limits of the Municipal Corporation for consumption, use or sale.

3. Section 194A is in the following terms:

“194A. Exemption of articles imported for immediate exportation.- Subject to such rules, not inconsistent with this Act, as the Commissioner, with the approval of the Standing Committee, shall from time to time frame in this behalf, any article imported into Brihan Mumbai for the purpose of immediate exportation shall be exempted from the levy of octroi, if such article is conveyed direct from the place of import to the place of export under such supervision and on payment of such fees therefor as shall be determined in the said rules: provided that no rule framed as aforesaid shall have effect unless and until it is confirmed by the State Government.”

In exercise of the power conferred by Section 194A, the Municipal Corporation has framed Rules. These rules are titled as the Rules In Respect of Exemption From Octroi (Immediate Exportation) Rules, 1965. Under Rule 5 an application for exemption under Section 194A has to be supported by an application in Form N annexed to the Rules. The Rules envisage the tendering and registration of an application for exemption (Rule 6); permission for escorting articles to the place of export (Rule 7); escorting of articles (Rule 8); receipt and examination of articles at the place of export (Rule 9); and export of articles (Rule 10). The object and purpose of the rules is to ensure that goods which are imported into Municipal limits for immediate exportation and which are exempt from the levy of octroi are actually exported and are not diverted for consumption, use or sale within Municipal limits.

Rule 5 of the Rules provides as follows:

“5. Preparation of application for exemption

Every claim to exemption from Octroi under Section 194A of the Act must be supported by an application for exemption in triplicate in form 'N' annexed to these rules and duly filled in and signed by the importer or on his behalf by his duly constituted attorney and no such application shall be entertained unless it fulfills the following conditions:-

-(1) It shall relate to articles which are to be conveyed direct from the place of import to the place of export.

-(2) It shall be accompanied by the documents of import and export viz.:-

(a) Custom's Export Shipping Bill, Railway Receipt or Parcel Weigh Bill, Air Consignment Note or Goods Consignment Note in the case of import by Sea, Rail, Air or Road, respectively, and

-(b) Custom Export Shipping Bill, Railway forwarding note, Air Forwarding Note or Goods Forwarding Note in the case of export by sea, Rail, Air or Road respectively as the case may be.

Provided that before a Customs Export Shipping Bills so tendered such Port Trust Fees as may be leviable in respect the articles referred to therein shall be paid and the endorsement 'Fees paid' shall be made thereon by an officer for the time being deputed in that behalf by the Port Trust and provided also that in the case of articles which are transshipped under Customs Tranship permit these rules shall not apply and exemption from Octroi shall be allowed without referring to them”

4. On 12 September 2001, a communication was addressed to the Petitioners by the Deputy Assessor and Collector (Octroi) stating that while availing of the 'N'