CHANDRAKANTARAJ, J. ( 1 ) THIS matter has come before us on account of the reference made under Section 9 of the karnataka High Court Act by the learned Single judge. ( 2 ) THE petitioner is the owner of motor vehicle bearing registration No. TMY 7776. That vehicle was checked on 25-11-80 at Bangalore city. It was a contract carriage vehicle covered by a special permit issued under Section 63 (6) of the Motor Vehicles Act, 1939. That special permission was issued by the Regional transport Officer of Dharmapuri District, tamilnadu. The charterer of the bus for the purpose of carrying tourists was the person by name ramachandran of Madras. Vehicle was registered and stationed at Krishnagiri. It was under the special permit issued to travel to madras (empty) from Krishnagiri and there pick up the tourist party under the leadership of ramachandran who was the charterer and thereafter to proceed to various places lying in tamilnadu and State of Karnataka. The places as per permit were all of tourist interest or of religious interest. When checked at Bangalore on the date mentioned about it was found that the 4 adult passengers were being carried for individual fares who apparently could not have been members of the tourist party. They were permitted to alight at Salem, Madurai, Tanjore and Pudukotai. It was on that basis the vehicle was detained and tax was demanded inasmuch as the exemption available to tourist bus covered under the special permit issued by the government of Karnataka in exercise of its power under section 16 (1) of the Karnataka Motor Vehicles taxation Act (hereinafter referred to as 'the taxation Act') bearing No. HT/72/tmt, dated 2nd November, 1962, ceased to be available. It was in that circumstance the petitioner approached this Court for relief for having failed to have the demand notice set aside by the appellate Authority, namely the Deputy Commissioner for Transport, Bangalore, - first respondent herein. That order is under challenge. ( 3 ) BEFORE us Mr. Venkata narasimhachar, learned Counsel for the petitioner, pleaded that the question of levying tax for violation of conditions of permit would not arise as held by the supreme Court in the case of M. Narasimhaiah v Deputy Commissioner for Transport, Bangalore, air 1988 SC page 240. I do not think the reliance placed on the decision is well founded. Venkata narasimhachar, learned Counsel for the petitioner, pleaded that the question of levying tax for violation of conditions of permit would not arise as held by the supreme Court in the case of M. Narasimhaiah v Deputy Commissioner for Transport, Bangalore, air 1988 SC page 240. I do not think the reliance placed on the decision is well founded. In that case the stage carriage registered in the state of Karnataka and operated as stage carriage, when checked was found carrying more passengers than the permit provided for. In other words the bus was overloaded when checked. In that circumstance additional tax was demanded. In the context the Supreme Court observed that liability to pay tax on a stage carriage was on the seating capacity at the rate specified in the schedules. Merely because more passengers on a given route were carried than was permitted under the special permit would at best amount to violation of the terms and conditions of the permit but would not attract additional tax under Section 8. The reasoning followed by the Supreme Court was that on all buses such thing does not happen and the scheme of the Taxation Act is such that on a bus when less number of passengers than the permit provided for are carried, no refund of tax is made for the period i. e. for the quarter, for which the tax is paid or leviable under the Act. It was in that circumstance it was said that the levy of additional tax under Section 8 was unjustified and set aside the order of this Court which the operator had suffered. ( 4 ) WE certainly cannot do anything more than follow the decision of the Supreme Court. But the question is whether it has any application to the facts of the case before us. ( 4 ) WE certainly cannot do anything more than follow the decision of the Supreme Court. But the question is whether it has any application to the facts of the case before us. As we see from the order of the appellate Authority the only explanation offered by owner if the bus was not even a denial that there were passengers paying fares to go for specified destination but certain section of the tourist party had gone to see the national Park at Bannerghatta which the leader of the tour had not allowed as the permit did not provide for a trip to the National Park and the vehicle was only awaiting the return of those passengers to proceed further on its journey in accordance with the special permit issued under section 63 (6) of the Motor Vehicles Act. In the absence of specific denial that there were fare paying passengers, the exemption available under the relevant notification of November, 1962 to tourist buses plied in Karnataka, though not registered in Karnataka, disappeared if the vehicle in question was found to have been operated as stage carriage. Therefore we do not see any error in the demand. ( 5 ) THE argument that the conditions of permit are violated and therefore the authorities i. e. , rcspondents-1 and 2 cannot do anything but only the authority who issued the permit may take action for violation of the permit is not a sound argument inasmuch as permit is granted under the Motor Vehicles Act, 1939, is since repealed. It was a regulatory measure and fell within the competence of the Union Government having been included in the Lisl-I of the VII Schedule. But collection of any tax on motor vehicles is a power conferred on the State and it is in exercise of that power in accordance with entry 57 of List-II of the VII Schedule of the Constitution. The two laws must be allowed to operate in their respective field and there is no scope for overlapping. What action the R. T. O. may take for violation of the conditions of the permit is not the concern of the Taxing Authority in karnataka. If it is not denied that there were passengers, outside of the tourist party, found in the bus at the time of check. What action the R. T. O. may take for violation of the conditions of the permit is not the concern of the Taxing Authority in karnataka. If it is not denied that there were passengers, outside of the tourist party, found in the bus at the time of check. If it is used as a stage carriage, the only relief that we can give is that the vehicle was a stage carriage in the Karnataka state, and as such the minimum period for which tax is leviable for a stage carriage is one week under Schedule Part-B under Item 6 (b ). ( 6 ) IN that view of the matter we sustain the order of the Appellate Authority subject to the modification that the tax levied for the minimum period for which the tax is attracted by the vehicle for having been used as a stage carriage and the taxation amount shall be determined by the second respondent in accordance with the provision of law to which we have adverted to. ( 7 ) THEREFORE the writ petition is allowed to the extent indicated above. In other respects it stands dismissed. ( 8 ) AT the time of issuing rule this Court granted interim prayer subject to the condition that a Bank guarantee be furnished by the petitioner in the sum of Rs. 7,800/ -. The bank guarantee shall be enforced to the extent necessary after determining the amount of tax in the light of the direction we have given. ( 9 ) THE determination will take place after notice to the petitioner within 2 months from the date of receipt of a copy of this order. Writ Petition partly allowed. --- *** --- .