RAJASEKHARA MURTHY, J. ( 1 ) PETITIONER is a resident of Goa and was operating a stage carriage under a permit issued by the transport Authority of Goa Administration on the inter-state route between Sadashivagad in karnataka and Marmagao in Goa. The petitioner was operating on this inter-state route for over 18 years prior to the date of filing of this Writ Petition. A part of the route that lies in Karnataka state is about 8 Kms. from the State border of Goa upto Sadashivagad. ( 2 ) THE said permit had been countersigned by the Transport Authority of Karnataka up to 14-6-76 after the merger of the Portugese Territory with India. By virtue of an arrangement entered into between the two Governments, the petitioner was exempted from payment of tax to the State of Karnataka. ( 3 ) WHILE the petitioner continued to operate on the said inter-state route, it was noticed by the secretary of the Karnataka State Transport Authority that the petitioner had operated on the route without obtaining the counter-signature of the State Transport Authority between 14-6-76 and 11-6-1981. His request for counter-signing the permit from 11-6-1981 onwards was therefore withheld since he was found operating without obtaining the counter-signature during the earlier period. ( 4 ) HOWEVER, by an order of this Court made in the Writ Petition on 29-10-1981 the order of the d. T. C. , Belgaum (Annexure-F) was stayed subject to furnishing security for the sum demanded as per Annexure-A. ( 5 ) IT appears, the permit was counter-signed for the subsequent period 11-6-81 to 30-8-82. It is relevant to notice that from 30-8-82 all the private operators were eliminated and the inter-state routes were taken over by the State Transport undertaking of both the States as per a reciprocal agreement entered into between them. ( 6 ) THE subject-matter of this Writ Petition is the demand made by the R. T. O. , Karwar, calling upon the petitioner to pay a sum of Rs. 1,41,589 00/- due to the Slate of Karnataka for the period 14-3-76 to 23-5-81 during which period the Petitioner had operated on the inter-state route without obtaining the counter-signature from the STA of this State. ( 7 ) AGAINST the said demand, the petitioner filed an appeal before the D. T. C. , Belgaum. 1,41,589 00/- due to the Slate of Karnataka for the period 14-3-76 to 23-5-81 during which period the Petitioner had operated on the inter-state route without obtaining the counter-signature from the STA of this State. ( 7 ) AGAINST the said demand, the petitioner filed an appeal before the D. T. C. , Belgaum. By his order dated 17-10-1981 the appeal was dismissed and the demand as per Annexure-A was confirmed with some modifications. ( 8 ) IN this Writ Petition the order of the D. T. C. , and the tax demand notice are challenged by the petitioner on several grounds. ( 9 ) THE sole ground on which the petitioner is called upon to pay the tax to the State of Karnataka is that he had operated on the inter-state route without obtaining the counter-signature from the sta of this State. After the merger of Portugese Territory with the Union of India, for the first time, an agreement was entered into between the two States on 10th October, 1974. The said agreement was published by the State Government in Karnataka Gazette dated 10-10-1974 as required under Sub-section (3b) of Section 63 of the Motor Vehicles Act, 1939. ( 10 ) THIS agreement provided for grant of new permits, continuance of old permits, exemption regarding tax and all other related matters. The operators who plied their vehicles in the inter-state routes were governed by the terms of the said agreement. All the stage carriages which were being operated on the existing inter-state routes as on the date of the agreement, were permitted to operate under the agreement, subject to certain conditions contained in the said agreement. The route from Goa to Sadashivagad was one of the inter-state routes on which the goa operators were permitted to continue and the petitioner was one among them. ( 11 ) SRI M. R. V. Achar, the learned Counsel for the petitioner, placing reliance on the several clauses of the agreement of 1974, has opposed the demand made as per Annexure-A. In particular, he relies on Clause 10 of the agreement under which the Petitioner and other similarly placed, namely, the old operators, have been exempted from payment of tax to the State of karnataka. The said Clause 10 reads :- "10. The said Clause 10 reads :- "10. It is agreed to grant exemption of the tax payable under the Motor Vehicles Taxation Act to all stage carriages, public carriers, private carriers and contract carriages (Taxi Cabs only) of either State operated on pucca permits issued under this agreement subject to the following conditions viz. (i) that the vehicles shall be registered in either of the States and operated on routes or areas as the case may be lying partly in the State of Karnataka and partly in the State of Goa ; (ii) that the permits (other than temporary permits) shall be duly countersigned in either State by the State Transport Authority or by the Regional Transport Authority of the region as the case may be, or in the case of permits having been countersigned, prior to the date of coming into force of this agreement, by the Regional Transport Authority concerned or by the State Transport authority of either State ; (iii) that the vehicles so operating shall be in pursuance of the reciprocal agreement entered into between the two States ;(iv) the tax leviable in respect of every such motor vehicle under any law for the time being in force in either State has been paid in full in that State ; and (v) that the single point tax concession does not apply or extend to the Karnataka Motor Vehicles taxation on Passengers and Goods Act, 1961 or the corresponding taxes payable under any law as in force in Goa. " ( 12 ) ON a proper construction of Sub-clause (ii) of Clause 10, according to Petitioner's Counsel, there was no need to obtain the counter-signature of the permits which had been issued by the goa Government prior to the agreement of 1974. ( 13 ) HIS alternative contention is that even in the absence of such counter-signature for the interregnum period between 1976-1981 it is not competent for the State Authorities to demand tax under the Karnataka Motor Vehicles Taxation Act in view of the reciprocal agreement providing for exemption from payment of tax. The learned counsel has also relied upon a division Bench decision of this Court in D. Vengaiah Setty -v.- Commissioner of Transport, ILR 1985 Karnataka 3327 in support of this submission. The learned counsel has also relied upon a division Bench decision of this Court in D. Vengaiah Setty -v.- Commissioner of Transport, ILR 1985 Karnataka 3327 in support of this submission. ( 14 ) DRAWING sustenance from the ratio of the said decision, Sri Achar contends that though the failure to obtain the counter-signature the Petitioner would be liable for prosecution or may be exposed to other penalties under the M. V. Act, he cannot be denied the benefit of exemption from payment of tax which flows from the reciprocal agreement between the two States. ( 15 ) IN Vengaiah Setty's case, this Court was interpreting a notification issued by the Government of Karnataka on 20th March 1959 in exercise of its powers conferred by Sub-section (1) of section 16 of the Motor Vehicles Taxation Act, 1957 (Notification No. HD 128 (2) MVA 5 ). The said Notification reads :- "whereas the Government of Karnataka are of opinion that it is necessary in public interest to exempt the tax payable under the Karnataka Motor Vehicles Taxation Act, 1957 in respect of transport vehicles registered in the State of Andhra Pradesh and plying in the State of Karnataka as specified hereinafter :- now, therefore, in exercise of the powers conferred by Sub-section (1) of Section 16 of the karnataka Motor Vehicles Taxation Act, 1957 (Karnataka Act 35 of 1957) and in pursuance of the reciprocal arrangement entered into with the Government of Andhra Pradesh, under Section 3 (3) of the said Act in regard to taxation of transport vehicles plying on inter-state routes between Karnataka and Andhra Pradesh, the Government of Karnataka hereby direct that the transport vehicles registered in the State of Andhra Pradesh and plying regularly on Inter-State routes between Karnataka and Andhra Pradesh under the reciprocal arrangement agreed to between the two States be exempt from payment of tax in this State under the said Act, provided that tax for the period has been paid in the State of Andhra Pradesh. Explanation.-For the purpose of this notification stage carriages plying under temporary permits issued under Section 62 (d) of the Motor Vehicles Act 1939 (Central Act IV of 1939) on such inter-state routes shall be deemed to be plying regularly. Explanation.-For the purpose of this notification stage carriages plying under temporary permits issued under Section 62 (d) of the Motor Vehicles Act 1939 (Central Act IV of 1939) on such inter-state routes shall be deemed to be plying regularly. " ( 16 ) UNDER the said notification the Government of Karnataka had exempted from payment of tax to this State in respect of transport vehicles registered in the State of Andhra Pradesh and plying 'regularly' on the inter-state routes between Karnataka and Andhra Pradesh under the reciprocal arrangement arrived at between the two States. ( 17 ) IT so happened that the petitioner therein-Vengaiah Setty1-had not obtained the counter-signature for the period between 4-3-64 and 18-12-64 though he continued to operate his stage carriage during that period on the portion of the inter-state route lying in Karnataka without obtaining counter-signature form the STA, Karnataka. However, the petitioner had applied for the renewal of the counter-signature in the meanwhile and continued to operate in anticipation of the counter-signature. But the counter-signature was granted only from the date of renewal and did not cover earlier period. For this reason the R. T. O. , Kolar made a demand that the petitioner should pay tax to the State of Karnataka for the period during which he operated the stage carriage without the counter-signature. This demand made by the R. T. O. Kolar was challenged by the petitioner before this Court in the Writ Petition. ( 18 ) IT was held in the said case, since the petitioner was operating regularly on the interstate route in pursuance to the reciprocal arrangement between the two States, the petitioner would be entitled to the exemption from payment of tax to this State by virtue of the notification issued under Section 16 (1) of the Act. ( 19 ) THIS Court further held that notwithstanding the failure to obtain the counter-signature the operator would not lose the benefit of exemption extended under the notification. Therefore, the petitioner places strong reliance on this decision and has prayed for a similar relief, on the facts of this case also. ( 20 ) IT is vehemently argued on behalf of the State by Sr. Therefore, the petitioner places strong reliance on this decision and has prayed for a similar relief, on the facts of this case also. ( 20 ) IT is vehemently argued on behalf of the State by Sr. Dattu, the learned High Court government Pleader that the petitioner had operated on the inter-state route without a valid permit during the period in dispute and that therefore he is liable to pay tax to this State, He relies upon a Full Bench decision of this Court in T Narayanaswamy -v.- R. T. A. and Ors. , 1971 mys. L. J. 276, and an earlier decision of this Court in M. R. Revanna and Ors.-v.- M. R. A. T. , 1970 mys. L. J. 219. Sri Dattu's contention relying on these two decisions is, under the provisions of section 63 of M. V. Act a permit granted by the Regional Transport Authority of any one region shall not be valid in any other region/state unless the permit has been countersigned by the r. T. A/s. T. A. of the other region or State and that such a requirement is mandatory under the m. V. Act, Developing his argument on this premise he strenuously contended that the failure to obtain the counter-signature as required under the provisions of the M. V. Act cannot be condoned, with the result the petitioner will be liable to pay tax to the State of Karnataka and the demand made is in accordance with law and has to be upheld as valid. ( 21 ) SRI Dattu has also strongly relied upon Clause 10 (ii) of the agreement of 1974 under which every operator had to obtain counter-signature. ( 22 ) SRI Achar in reply to the arguments of the learned Government Pleader has distinguished the ratio of the two decisions relied upon by him. He has argued that this Court was interpreting as to what is a 'valid permit' for purposes of exemption from the application of the scheme to the operators who were the 'existing permit holders' on the day the scheme to take over the interstate routes was published. Therefore the two decisions, according to Sri Achar, have no bearing on the question arising in this case which should depend upon the interpretation of the terms of the agreement of 1974. Therefore the two decisions, according to Sri Achar, have no bearing on the question arising in this case which should depend upon the interpretation of the terms of the agreement of 1974. ( 23 ) SRI Achar has also relied upon the latest decision of the Supreme Court in K. M. C. Swamy -v.- State of Andhra Pradesh, AIR1985 SC 956 , 1985 (1 )SCALE1186 , (1985 )3 SCC387 , [1985 ]3 SCR890 , 1985 (17 )UJ961 (SC ). The terms of agreement entered into between the State of Andhra Pradesh and the State of Karnataka under Section 63 (3) came up for interpretation in the said case. It was laid down by Justice Sri Venkataramaiah on behalf of the Bench that in a case where the two States enter into an agreement under Section 63 (3), they are governed by the terms of the said agreement and further their Lordships held that the terms of the said agreement would be binding, on both the State? once it is published as required to be done under Sub-section (3a) of Section 63 of the M. V. Act. ( 24 ) RELYING on this enunciation of the law, Sri Achar submits that by virtue of the reciprocal ageement published on 10th October 1974 to which both the States were parties, the petitioner would be entitled to claim exemption from payment of tax for the entire period during which the said agreement is in force and until it is superseded or reviewed by another agreement. ( 25 ) THE question therefore that arises for determination in this case is whether the petitioner is liable to pay tax and surcharge of Rs. 1,41,589/- to the State of Karnataka solely on the ground that he failed to obtain counter-signature during the relevant period? ( 26 ) THE petitioner had been operating his stage carriage on the inter-state route between sadashivghad and Marmagoa for over 18 years even prior to the reciprocal agreement between the two States was entered into in the year 1974. 1,41,589/- to the State of Karnataka solely on the ground that he failed to obtain counter-signature during the relevant period? ( 26 ) THE petitioner had been operating his stage carriage on the inter-state route between sadashivghad and Marmagoa for over 18 years even prior to the reciprocal agreement between the two States was entered into in the year 1974. The private operators of Goa who were plying their vehicles on he inter-state routes prior to the said agreement were allowed to operate subject to the exemption which they enjoyed on and after 9-10-1974, both the Governments were governed by the terms of the agreement and they held good and remained in force till they were reviewed and a new agreement came into existence as a result of the review. It was agreed under the terms of the said agreement that all 'existing operators' and the operators who were granted fresh permits on the inter-state routes referred to in Annexure-A to the said agreement, should be exempted from payment of tax by the reciprocating States. The petitioner continued to operate on the inter-State route after the agreement come into force as an 'existing operator'. It is also relevant to note that the petitioners had obtained counter-signature from 22-6-71 to 14-6-76 and also for the further period from 11-6-81 to 30-8-82. From 30-8-82 onwards, the private operators were eliminated and all the inter-state routes were taken over by the State Transport undertakings of the two Governments. ( 27 ) THE further question that arises is: whether under Clause 10 (ii) of the agreement, the petitioner was required to obtain the counter-signature from the S. T. A. of Karnataka and as a consequence of his failure to do so whether the petitioner should be penalised to pay the tax due to the State of Karnataka for the period between 1976 and 1981. ( 28 ) THE argument of the petitioner in this regard is, that there was no need or compulsion to obtain the counter-signature from the S. T. A. of Karnataka under Clause 10 (ii) of the agreement. Even if it is interpreted as mandatory under the agreement, Sri Achar submits, as laid down by this Court in D. Vengaiah Setty's case1 that he need not pay tax to this State and claims exemption under the reciprocal agreement. Even if it is interpreted as mandatory under the agreement, Sri Achar submits, as laid down by this Court in D. Vengaiah Setty's case1 that he need not pay tax to this State and claims exemption under the reciprocal agreement. The petitioner had plied the stage carriage for over six years without the counter-signature and it was detected only on 23-5-1981 by the Motor vehicles Inspector at Majali checkpost. The Secretary S. T. A. also intimated the R. T. O. Karwar that the petitioner had operated the vehicle without the counter-signature since 14-3-1976. ( 29 ) AS per this endorsement dated 22-6-71 produced by the petitioner the permit was counter-signed for the period 22-7-71 to 14-3-76. Before the agreement of 1974 was entered into the counter-signatures were done as per the reciprocal arrangement between the two governments In the meanwhile, the agreement of 1974 was published by the respective governments as required under sub-section. (3a) of Section 63 of the M. V. Act. ( 30 ) I am, therefore, of the opinion that applying the ratio of the decision in Vengaiah Setty's case1, no demand for payment of tax for the period 1976-81 can be made notwithstanding the failure to obtain counter-signature for the intervening period. The decision in Vengaiah Setty's case1 is accepted by the State and that is the law that should govern this case also. The validity of the permit is to be judged in the light of the terms of the agreement between the two governments and not solely by applying the provisions of the Motor Vehicles Act. ( 31 ) IN the result, the Writ Petition is allowed and the order of the R. T. O. (Annex-4), and the order of the Appellate Authority, (Annex-F), are quashed. It is declared that the petitioner is entitled to the exemption from payment of tax in view of the reciprocal agreement dated 9-10-1974 for the period 14-3-1976 to 23-5-1981. ( 32 ) IN the light of my order made in W. P. 24872/81, Writ Petition No. 6714/84 does not survive. ( 33 ) THE petitioner has prayed for issue of a Mandamus to the State Government to cause a notification to be issued under Section 16 (1) of the Motor Vehicles Taxation Act in pursuance to agreement published on 10-10-1974. ( 33 ) THE petitioner has prayed for issue of a Mandamus to the State Government to cause a notification to be issued under Section 16 (1) of the Motor Vehicles Taxation Act in pursuance to agreement published on 10-10-1974. ( 34 ) THE learned Government Pleader rightly submits that no such notification under Section 16 (ii) is necessary since all matters including exemption from payment of tax, are governed by the inter-state agreement of 9-10-1974 which has been published in Government Gazette as required to be done under Sub-section (3a) of Section 63 of the M. V. Act. This according to him, is sufficient compliance with the requirement of Section 63. That is also the ratio of the decision of the Supreme Court in K. M. C. Swamy -v.- State of Andhra Pradesh4. Hence the Writ petition is dismissed.