JUDGMENT Gulab C. Gupta, C.J.— The petitioners are manufacturers and producers of various goods, which they export outside the State of Himachal Pradesh. They were earlier covered under the Himachal Pradesh Taxation (On Certain Goods Carried by Road) Act, 1976, (hereinafter referred to as the 1976 Act) and have paid tax under the said Act. Since the said Act was declared ultra vires by a Division Bench of this Court in Yash Pal Garg and others v. State of Himachal Pradesh, 1991 (2) Sim LC 110. They claim to have become entitled to refund of the tax already paid. The Himachal Pradesh Legislature has, however, re-enacted the said Act as Himachal Pradesh Taxation.(On Certain Goods Carried by Road) Act, 1991 (hereinafter referred as the 1991 Act), which has the effect of legalising levy, imposition and collection of tax after 1976 and thereby deny benefit to them of this courts judgment aforesaid. The constitutional validity of 1991 Act is under challenge in these writ petitions. 2. It appears that fruit growing is the major industrial activity of this State and hence it was proposed to levy a tax on fruits carried by road in order to mobilise additional resources and for that reason Himachal Pradesh Taxation (On Certain Goods Carried by Road) Ordinance, 1976 was promulgated, exercising powers under Article 231 of the Constitution. The said Ordinance was subsequently replaced by 1976 Act. It appears that in 1978, the State Legislature amended the aforesaid Act by Act No. 16 of 1978 and extended its application to other goods like potatoes, timber and other forest produce carried by road Lateron, yet by another amendment in 1985 (Amendment Act No 8 of 1985), the Act was made applicable to as many as 19 items. The 1976 Act, as amended aforesaid, was challenged on a number of grounds, including the ground that it puts immediate and direct restriction on freedom of trade and commerce guaranteed under Article 301 of the Constitution, without following the procedure under Article 304 (b) thereof. 3. The Division Bench of this High Court in Yash Pal Gargs case (supra), considered the same in the context of various decisions of the Supreme Court and held that the levy of tax under the Act amounts to restricting free flow of trade and commerce under Article 301 of the Constitution of India. 3. The Division Bench of this High Court in Yash Pal Gargs case (supra), considered the same in the context of various decisions of the Supreme Court and held that the levy of tax under the Act amounts to restricting free flow of trade and commerce under Article 301 of the Constitution of India. The levy, according to the court, could only have been saved in case the restriction brought about by it purported to be in public interest and that too if the assent of the President had been obtained either by way of previous sanction or even by obtaining his assent to the Act subsequently to bring it within the four corners of Article 255 of the Constitution. The final judgment of the court is stated in para 22, which reads as under : "On the averments made in the petition, noticed by us earlier, which have not been effectively denied on behalf of the State, there is hardly any scope for saying that the levy does not amount restriction within the meaning of Article 301 of the Constitution of India. The levy could only have been saved, in case the restriction brought about by it purported to be in public interest and that too if the assent of the President had been obtained either by way of previous sanction or even by obtaining his assent to the Act subsequently to bring it within the four corners of Article 255. Admittedly, there is no sanction of the President at any stage. Consequently, the provisions of the Himachal Pradesh Taxation (On Certain Goods Carried by Road) Act, 1976 (Act No. 34 of 1976), as amended from time to time, are declared to be constitutionally invalid." The court further directed that "the amount deposited towards the tax by the petitioners, in terms of the interim orders passed by this court, be refunded to them by the State of Himachal Pradesh in accordance therewith". While reaching the aforesaid conclusion, the court had also observed that the levy was a direct levy upon the carriage of goods by road and waterways. It was not the case of the respondent-State that the levy was compensatory or regulatory in character. The court therefore observed that "we do not find any mention in the reply filed by the State of any facts which may bring the levy in either of the two categories". It was not the case of the respondent-State that the levy was compensatory or regulatory in character. The court therefore observed that "we do not find any mention in the reply filed by the State of any facts which may bring the levy in either of the two categories". The aforesaid judgment was delivered on 10th December, 1990 and entitled the petitioners therein to claim refund of the tax already paid by them. It appears that the respondent State became concerned about the said decision and filed petitions for Special Leave to Appeal, against the same in the Supreme Court, which were the subject-matter of SLP (C) Nos. 7711-28 of 1991., The said court by its order dated 11th September, 1991, granted Special Leave to the respondent State and stayed the operation of the order of this court, in so far as refund of the amount is concerned We have been informed by the learned Counsel for the parties that the appeals filed by the respondent-State consequent to the aforesaid order are still pending in the Supreme Court. 4. It is somewhat surprising that earlier to the aforesaid order of the Supreme Court, the respondents had on 22nd March, 1991, published a Bill known as Himachal Pradesh Taxation (On Certain Goods Carried by Road) Bill 1991 and presented the same for consideration of the State Legislature. Thereupon, the Legislature passed the 1991 Act, which was published in the Rajpatra dated 22nd April, 1991. Section 3 of the said Act, which is relevant for our purpose and covers not only the future levy but also provides that the levy of tax would have retrospective effect from 17th July, 1976, which is the date from which the levy under 1976 Act had been imposed and collected. Section 18 of this Act validated the levy under 1976 Act, by providing that the same shall be deemed to be as valid and effective as if it was made under the provisions of this Act. Section 19 of this Act repealed the 1976 Act and provided that notwithstanding the aforesaid repeal, anything done would be deemed to have been done under this Act, which would be considered as having become effective from 17th July, 1976. Since these provisions are relevant for our consideration, they are reproduced hereunder for ready reference :— "3. Section 19 of this Act repealed the 1976 Act and provided that notwithstanding the aforesaid repeal, anything done would be deemed to have been done under this Act, which would be considered as having become effective from 17th July, 1976. Since these provisions are relevant for our consideration, they are reproduced hereunder for ready reference :— "3. (1) Subject to the provisions of this Act, there shall be levied and paid to the State Government a tax on every kind of goods specified in Column (2) of Schedule I, carried by road by means of a mechanical vehicle, cart, animal and human agency or any other means, except railways and airways. (2) Such tax levied on the goods specified in Schedule I, shall be payable for a distance of every one hundred and fifty kilometres or part thereof covered or being covered within the State and at the following rates, namely : — (a) where the distance covered or being covered does not exceed 150 kilometres, at the rates as specified in Column (3) of Schedule I; (b) where the distance covered or being covered exceeds 150 kilometres but does not exceed 300 kilometres, at twice the rates specified in Column (3) of Schedule I; and (c) where the distance covered or being covered exceeds 300 kilometres. at thrice the rates specified in Column (3) of Schedule I. (3) On every kind of goods, specified in Column (2) of Schedule II, carried by road by means of a mechanical vehicle, cart, animal and human agency or any other means, except railways and airways, at any time, on or after the 17th day of July, 1976 but before the appointed day, there shall be deemed and always deemed to have been levied and paid to the State Government a tax for a distance of every one hundred and fifty kilometres, or part thereof, covered within the State, and for the period mentioned in Column (3) thereof and at the following rates, namely :— (a) where the distance covered does not exceed 150 kilometres, at the rates as specified in Column (4) of Schedule II; (b) where the distance covered exceeds 150 kilometres but does not exceed 300 kilometres, at twice the rates specified in Column (4) of Schedule II ; and (c) where the distance covered exceeds 300 kilometres. at thrice the rates specified in Column (4) of Schedule II. at thrice the rates specified in Column (4) of Schedule II. (4) The net weight, value, volume and species of the goods for the purpose of assessment of tax shall be determined in the manner prescribed. Explanation.—The tax levied under this Act shall be in addition to any tax levied or leviable under the Himachal Pradesh Passengers and Goods Taxation Act, 1955. X X X X X X X X 18. (1) Notwithstanding anything contained in any judgment, decree, or order of any court or other authority to the contrary, any assessment levy or collection of any tax, on certain goods carried by road within the State (hereafter in this section referred to as aforesaid tax), made or purporting to have been made or any action taken or anything done under the provisions of the Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1976 (hereafter in this section referred to as the said Act), at any time, on or after the 17th day of July, 1976 but before the commencement of this Act, shall be deemed to be as valid and effective as if such assessment, levy or collection or action or thing had been made, taken or done under the provisions of this Act and accordingly— (i) the aforesaid tax assessed, levied or collected or purporting to have been assessed, levied or collected under the provisions of the said Act before the commencement of this Act shall be deemed to be and always deemed to have been validly assessed, levied or collected in accordance with law ; (ii) no suit or other proceeding shall be maintained or continued in any court or before any authority for the refund of. and no enforcement shall be made by any court or authority of any decree or order, directing the refund of any such aforesaid tax which has been collected ; (iii) recoveries, if any, shall be made in accordance with the provisions of the said Act of all amounts which would have been collected thereunder as such aforesaid tax if this Act have been in force at all material times ; and (iv) anything done or any action taken (including any rule or order made, notification issued or direction given or exemption granted or penalty imposed) under the said Act before the commencement of" this Act shall be deemed always to have been validly done or taken in accordance with this Act. (2) Notwithstanding anything contained in sub-section (1), any goods specified in Column (2) of the Schedule appended to the said Act shall be exempt from the aforesaid tax where, such goods have been carried by road, at any time, on or after the commencement of the said Act but before the commencement of this Act and the aforesaid tax has not been collected on such goods on the grounds that no such tax could have been levied or collected at that time. (3) For the removal of doubts, it is hereby declared that— (a) nothing in sub-section (1) shall be construed as preventing any person— (i) from questioning, in accordance with the provisions of this Act, the assessment, levy or collection of the aforesaid tax ; or (ii) from claiming refund of the aforesaid tax paid by him in excess of the amount due from him under this Act ; and (b) no act or omission on the part of any person, before the commencement of this Act, shall be punishable as an offence which would not have been so punishable as if this Act had not come into force. 19. (1) The Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1976, is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken under the said repealed Act shall be deemed to have been done or taken under this Act as if this Act had come into force on the 17th day of July, 1976." 5. 19. (1) The Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1976, is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken under the said repealed Act shall be deemed to have been done or taken under this Act as if this Act had come into force on the 17th day of July, 1976." 5. While introducing the aforesaid Bill, the Legislature was informed that though the 1976 Act imposed tax with reference to weight or volume of goods carried by road and was not a direct levy upon the goods carried by road. The High Court held that it was a direct levy upon the goods carried by road and hence constitutionally invalid. According to the respondent-State Government, the judgment of the High Court went against the basic intention underlying the 1976 Act, namely, compensation for huge expenditure incurred each year by the Government on construction, development, repair, upkeep and maintenance of roads and bridges within the State. The invalidation of the Act, according to the respondent-State, is attributable principally to the unclear statement of objectives appended to its Bill and inadequate or feeble defence to prove that it was, infact, a compensatory taxation measure. The State Government felt that in the absence of effective reply the High Court does not have the occasion to consider the compensatory character of this enactment. The Statement of Objects and Reasons, therefore, clarified that the levy is being rationalised by making it chargeable on the slabs of mileage of roads actually used for carrying of goods. Since the Statement of Objects and Reasons has also been referred to by the learned Counsel for the parties, during the course of their submissions, it is necessary to reproduce the same as under :— "The Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1976, was enacted under Entry 56, List II of the Seventh Schedule to the Constitution of India to levy a tax on certain goods which are carried by road within the State of Himachal Pradesh. The charging section 3 of this Act categorically declared the levy of tax to be in addition to the tax levied or leviable under the Himachal Pradesh Passengers and Goods Taxation Act, 1955. The charging section 3 of this Act categorically declared the levy of tax to be in addition to the tax levied or leviable under the Himachal Pradesh Passengers and Goods Taxation Act, 1955. The conspicuous distinction between the taxes imposed by the Act of 1955 and Act of 1976 is that while under the former Act the tax is calculated with reference to the fare or freight charged or chargeable, whereas under the Act of 1976, it is calculated with reference to weight or volume of goods carried by road. Nevertheless, in both these enactments there exist identity of inextricable nexus with the carriage of goods by road. 2. In various writ petitions, the Hon’ble High Court of Himachal Pradesh has held that the tax levied under the aforesaid Act is a direct levy upon the carriage of goods by road and waterways and it is constitutionally invalid being violative of Article 301 read with Article 304 (b) of the Constitution of India. The High Court has further ordered that the State Government shall refund, alongwith interest, the amount of tax deposited towards tax by the petitioners. This judgment, therefore, went against the basic intention underlying the enactment of the H. P. Taxation (on Certain Goods Carried by Road) Act, 1976, namely, a compensation for the huge expenditure incurred each year by the Government on construction, development and maintenance of roads and bridges within the State. 3. The Honble Supreme Court in its various judgments has held that measures imposing compensatory taxes, do not come within the purview of restrictions contemplated by Article 301 and such measures need not comply with the requirements of the proviso to Article 304 (b) of the Constitution. The Court has also clearly declared that the tax imposed under Entry 56, ibid, is of a regulatory and compensatory character. The power to levy taxes on goods and passengers carried by road or inland waterways belongs exclusively to the State Legislature. 4. The invalidation of the Act is attributable principally to the unclear statement of objectives appended to its Bill and inadequate or feeble defence to prove that it was, in fact, a compensatory taxation measure. In the absence of effective reply the Honble Court did not have the occasion to go to the compensatory character of this enactment. 4. The invalidation of the Act is attributable principally to the unclear statement of objectives appended to its Bill and inadequate or feeble defence to prove that it was, in fact, a compensatory taxation measure. In the absence of effective reply the Honble Court did not have the occasion to go to the compensatory character of this enactment. In the proposed Bill, the levy has been rationalised by making it chargeable on the slabs of mileage of roads actually used for carrying of goods within the State and the method or machinery of collection has also been suitably modified, to remove the defects existing in the Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1976. 5. It is well known that the roads and bridges are life line in the hilly terrain of Himachal Pradesh and every year the State Government has to devote a sizeable chunk of its budget exclusively to the construction, development, repair, upkeep and maintenance of roads and bridges, without which any development is unthinkable. Beside loss of a recurring income of revenue of nearly Rs 9 crores each year, to the State Exchequer, the impending refund of tax will drain out not less than Rs. 42 crores from the State exchequer, which will mean absolute halt to the construction, maintenance and development of roads and bridges for many years to come for want of funds. Hence, in order to ensure availability of sufficient funds for construction, development, upkeep and maintenance of roads and bridges in the State, it has become necessary to levy the tax on certain goods carried by road within the State. It is also essential to validate the tax imposed and collected by the State Government right from the date of commencement of the aforesaid Act. The Bill seeks to achieve the aforesaid objectives." 6. A comparative study of section 3 of the 1976 Act and 1991 Act would indicate that the provisions in 1976 Act authorised the State Government to levy and collect, on every kind of goods specified in Schedule to the Act, carried by road by means of a mechanical vehicle, cart, animal and human agency or by any other means except railways and airways, a tax at the rate specified against such goods in the Schedule. This provision, as interpreted by this court in Yash Pal Gargs case, provided for a direct levy upon the goods carried by road. The provision in section 3 of 1991 Act is almost identical, except that it makes the amount of tax dependent on the distance covered. Sub-section (1) of this section is almost identical with sub-section (1) of section 3 of 1976 Act. The only difference between the two provisions is that the tax under the 1976 Act was payable at the flat rate irrespective of the distance covered. The rate of tax relevant under sub-section (3) of this provision for the period from 17th July, 1976, upto this enactment is really the same as the tax under 1976 Act. It is, therefore, clear that though the tax under both the provisions remains basically a tax on goods carried by mechanical vehicle, cart, animal and human agency or any other means, except railways and airways, the amount of tax under 1991 Act is made dependent on the distance covered by the mechanical vehicle, cart, animal and human agency. It is also clear that though 1991 Act has been applied retrospectively from 17th July, 1976, the rate of levy for the past period is not the same as for the future. The levy for the past period is the same as under 1976 Act. Under the circumstances, the 1991 Act claims to provide legitimacy to the levy under the 1976 Act and thereby avoid the impact of the High Court decision in Yash Pal Gargs case (supra). This, according to the learned Counsel for the petitioners, amounts to legislative overruling of a judicial decision and is contrary to the Constitution, 7. Section 18 of 1991 Act provides for validation of assessment, levy and collection of tax under 1976 Act, by providing that the same was assessed, levied and collected under the provisions of this Act Since, the defect pointed out in 1976 Act by the Division Bench of this Court in Yash Pal Gargs case have not been removed so far and the operation of the said judgment not having been stayed by the Supreme Court so far, this provision seems to be holding that 1976 Act was not covered under Article 301 of the Constitution and the decision of this court in Yash Pal Gargs case does not lay down the correct law. This is the principal submission of the learned Counsel for the petitioners, though the learned Advocate General does not accept the same and submits that the levy under this Act is retrospective and has nothing to do with this courts judgment or the appeals of the State pending in the Supreme Court. 8. It must, at this stage, be noticed that the respondent-State had filed the appeals in the Supreme Court, after enacting 1991 Act and repealing 1976 Act The effect of this courts judgment holding 1976 Act constitutionally invalid was to obliterate the same from the statute book and hence there was nothing to be repealed by the State Legislature Normally, a provision like section 19 of the impugned Act is made when the Legislature intends to repeal the earlier Act and re-enact the same in a modified form. Repeal of a non-existing law is something, which has yet to be recognised in our constitutional law. 9. Since, the claim of the respondent-State is that the impugned law is not covered under Article 301 of the Constitution and is really compensatory in nature, the said claim deserves to be examined first. In this connection, Statement of Objects and Reasons, relatable to the impugned law, quoted above, may be referred to. Para 2 of the aforesaid clarifies that the intention underlying 1976 Act was to compensate the State for the huge expenditure incurred each year on construction, development and maintenance of roads and bridges within the State. In para 5 thereof, it is mentioned that the State spends a sizeable chunk of its budget exclusively to the construction, development, repair, upkeep and maintenance of roads and bridges, without which any development is unthinkable. The learned Advocate General has also filed additional affidavit in this court indicating the amount spent by the respondent-State in construction and maintenance of roads and bridges. It is stated in the aforesaid affidavit that a sum of Rs. 20,11,34,322 was spent on the maintenance of roads and bridges and Rs. 40,87,80,510 on construction of roads and bridges during 1990-91 whereas only an amount of Rs, 6,51,82,000 was collected as levy under the Act. It would therefore, appear that though the respondent-State had spent about 61 crores of rupees in construction and maintenance of roads and bridges, it recovered only a sum of 6-1/2 crores from the levy under the Act. 40,87,80,510 on construction of roads and bridges during 1990-91 whereas only an amount of Rs, 6,51,82,000 was collected as levy under the Act. It would therefore, appear that though the respondent-State had spent about 61 crores of rupees in construction and maintenance of roads and bridges, it recovered only a sum of 6-1/2 crores from the levy under the Act. Apparently, the levy is not compensatory in the sense stated by the learned Advocate General. It seeks to recover only a part of the expenses incurred in construction and maintenance of roads and bridges. This position has been, more or less, the same from the year 1976 onwards. In the context of these figures, it is submitted that the levy has been compensatory from 1976 and hence it is wrong to hold that it is directly affecting free flow of trade or commerce throughout the territory of India, as guaranteed under Article 301 of the Constitution. In other words, the submission appears to be that the decision of this court in Yash Pal Gargs case is not correct. 10. The powers of the respondent-State to comment upon a judgment passed by the court of competent jurisdiction are not unlimited Indeed, a judgment binds the State as much as it binds anyone else. It is well settled that though the Legislature can change the basis on which a judicial decision is given by the court and thus change the law in general, which may affect a class of persons or events at large. It cannot set aside an individual decision inter parties and affect their rights and liabilities alone. The Legislature in our constitutional scheme cannot exercise judicial power or function as an appellate Court or Tribunal. [See In the matter of Cauvery Water Disputes Tribunal. AIR 1992 SC 522 p. 17] Clearly, therefore, this court would not accept the proposition that the decision of this court in Yash Pal Gargs case does not correctly decide the law on the subject. This is more so when the matter is pending decision of the apex Court and the said court has not stayed the operation of the said judgment. 11. The submission of the respondent-State is really based on a decision of the Supreme Court in M/s. International Tourist Corporation etc. This is more so when the matter is pending decision of the apex Court and the said court has not stayed the operation of the said judgment. 11. The submission of the respondent-State is really based on a decision of the Supreme Court in M/s. International Tourist Corporation etc. v. State of Haryana and others, AIR 1981 SC 774, which, according to the learned Advocate General, lays down that a law imposing tax on goods carried by road and waterways is basically regulatory and compensatory in nature and does not attract cither Article 301 or Article 304 of the Constitution. The Supreme Court in this case was considering the constitutional validity of Haryana Passengers and Goods Taxation Act, 1952, which empowered the levy of tax to be paid to the State Government at such rates not exceeding 60% of the value of the fare or freight, as the case may be, on all passengers and goods carried by a motor vehicle, other than a private carrier. The court was of the opinion that the tax so levied falls directly and squarely within Entry 56 of List II and hence the State Government had the necessary legislative competence in the matter. Having so held, the court relying upon the decision in Atibari Tea Co. Ltd. v. State of Assam, AIR 1961 SC 232 ; Automobile Transport (Rajasthan) Ltd. etc. v. State of Rajasthan and others, AIR 1962 SC 1406 and Bolani Ores Ltd. v. State of Orissa, AIR 1975 SC 17, observed that "the power exercisable under Entry 56 of List II is the power to impose taxes which are in the nature of compensatory and regulatory measures". Dealing with the compensatory and regularly character of a levy, the court held as under: "While in the case of a fee it may be possible to precisely identify and measure the benefits received from the Government and levy the fee according to the benefits received and the expenditure incurred, in the case of a regulatory and compensatory tax it would ordinarily be well nigh impossible to identify and measure, with any exactitude, the benefits received and the expenditure incurred and levy the tax according to the benefits received and the expenditure incurred. What is necessary to uphold a regulatory and compensatory tax is the existence of a specific identifiable object behind the levy and a nexus between the subject and object of the levy. If the object behind the levy is identifiable and if there is sufficient nexus between the subject and the object of the levy, it is not necessary that the money realised by the levy should be put into a separate fund or that the levy should be proportionate to the expenditure. There can be no bar to an intermingling of the revenue realised from regulatory and compensatory taxes and from other taxes of a general nature nor can there be any objection to more or less expenditure being incurred on the object behind the compensatory and regulatory levy than the realisation from the levy. In Automobile Transport (Rajasthan) Ltd v. State of Rajasthan, (1963) 1 SCR 491 : AIR 1962 SC 1406, this Court observed (at p. 536-537) : Whether a tax is compensatory or not cannot be made to depend on the preamble of the statute imposing it. Nor do we think that it would be right to say that a tax is not compensatory because the precise or specific amount collected is not actually used to providing any facilities........actual user would often be unknown to tradesmen and such user may at some time be compensatory and at others not so. It seems to us that a working test for deciding whether a tax is compensatory or not is to enquire whether the trades people are having the use of certain facilities for the better conduct of their business and paying not patently much more than what is required for providing the facilities It would be impossible to judge the compensatory nature of a tax by a meticulous test, and in the nature of things that cannot be done. Nor do we think that it will make any difference that the money collected from the tax is not put into a separate fund so long as facilities for the trades people who pay the tax are provided and the expenses incurred in providing them are borne by the State out of whatever source it may be....................We were addressed at some length on the distinction between a tax, a fee and an excise duty It was also pointed out to us that the taxes raised under the Act were not specially earmarked for the building or maintenance of roads. We do not think that these considerations necessarily determine whether the taxes are compensatory taxes or not. W« must consider the substance of the matter. There cannot be the slightest doubt that the State of Haryana incurs considerable expenditure for the maintenance of roads and providing facilities for the transport of goods and passengers within the State of Haryana. The maintenance of highways other than the National Highways is exclusively the responsibility of the State Government. While the maintenance of the National Highways is the responsibility of the Union Government, under section 5 of the National Highways Act, that very provision empowers the Central Government to direct that any function in relation to the development and maintenance of a National Highway shall also be exercisable by the concerned State Government. Section 6 further empowers the Central Government to give directions to the State Government as to the carrying out of the provisions of the Act and section 8 authorises the Central Government to enter into an agreement with the State Government in relation to the development and maintenance of the whole or part of a National Highway situated within the State including a provision for sharing of expenditure. Therefore, the State Government is not altogether devoid of responsibility in the matter of development and maintenance of a national highway, though the primary responsibility is that of the Union Government, It is under a statutory obligation to obey the directions given by the Central Government with respect to the development and maintenance of national highways and may enter into an agreement to share the expenditure. That part of the highway which is within a municipal area is excluded from the definition of a national highway and therefore, the responsibility for the development and maintenance of that part of the highway is certainly on the State Government and the Municipal Committee concerned. Since the development and maintenance of that part of the highway which is within a municipal area is equally important for the smooth flow of passengers and goods along the national highway it has to be said that in developing and maintaining the highway which is within a municipal area, the State Government is surely facilitating the flow of passengers and goods along the national highway. Apart from this, other facilities provided by the State Government along all highways including national highways, such as lighting, traffic control, amenities for passengers, halting places for buses and trucks are available for use by everyone including those travelling along the national highways. It cannot therefore be said that the State Government confers no benefits and renders no service in connection with traffic moving along national highways and is, therefore, not entitled to levy a compensatory and regulatory tax on passengers and goods carried on national highways. We are satisfied that there is sufficient nexus between the tax and passengers and goods carried on national highways to justify the imposition." In view of the aforesaid, the court came to the conclusion that provisions of Articles 301 and 304 are not attracted in the instant case. Since the aforesaid judgment is based on earlier judgments of the Supreme Court in Atibari Tea Companys case and Automobile Transports ease, which have also been relied upon by the Division Bench of this Court, it is considered necessary to once again refer to them. 12. Atibari Tea Companys case considered the constitutional validity of Assam Taxation (on Goods Carried by Roads or Inland Waterways) Act, 1954, which is really pari materia with the Act under consideration. The majority decision of the court is that Art. 301 applies only to a case where restrictions directly and immediately restrict or impede the free flow or movement of trade. According to the court, taxes may and do amount to restrictions ; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301. According to the court, taxes may and do amount to restrictions ; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301. Having so defined the ambit and scope of the aforesaid Article, the court considered whether the provisions of the Assam Act were directly and immediately restricting or impeding the free flow or movement of trade". On examination of its various provisions, the court held that "this Act has been passed by the Assam Legislature under Entry 56 in List II and naturally it purports to levy a tax on goods carried by roads or by inland waterways. It is thus obvious that the purpose and object of the Act is to collect taxes on goods solely on the ground that they are carried by road or by inland waterways within the area of the State. That being so the restriction placed by the Act on the free movement of the goods is writ large on its face". The court further observed that "it may be that one of the objects in passing the Act was to enable the State Government to raise money to keep its roads and waterways in repairs ; but that object may and can be effectively achieved by adopting another course of legislation ; if the said object is on the carriage of goods, it can be so done only by satisfying the requirement of Article 304 (b)". The court, therefore, held that "since the previous sanction of the President has not been obtained before introducing the Bill in the State Legislature, nor has the said infirmity been cured by recourse to Article 255 of the Constitution, we do not see how the validity of the tax can be sustained". Honble Shah, J., as he then was, who wrote his own opinion, also reached the same conclusion. According to him, the Assam Taxation (on Goods Carried by Roads or Inland Waterways) Act, 1954, must be regarded as infringing the guarantee of freedom of trade and commerce under Article 301, because the Bill moved in the Assembly had not received the assent of the President as required under Article 304 (b) of the Constitution and the proviso of the Act has not been validated by the assent of the President under Article 255 (c) of the Constitution. This decision does not lay down that the law made by the State Legislature under Item 56 of list II of the Seventh Schedule is regulatory or compensatory in nature. Indeed, the point was neither submitted for consideration nor decided by the court. Since the Assam law was almost identical to the impugned law, this decision must be deemed to be finally deciding the controversy in question. 13. Automobile Transport Limited case is a judgment of seven Judges Bench and considered (he constitutional validity of Rajasthan Moto Vehicles Taxation Act, 1951. The majority view was that the tax imposed under the said Act are compensatory in nature and do not hinder the freedom of trade and commerce or intercourse assured by Article 301 of the Constitution According to the court, regulatory measures or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restriction ns contemplated under Article 301 and hence such measures need not comply with the requirements of the proviso to Article 304 (b) of the Constitution. While so holding, the court approved the majority view in Atibari Ted Companys case, as correct but explained that such regulatory measures as do not impede the freedom of trade, commerce and intercourse and compensatory taxes for the use of trading facilities are not hit by the freedom declared by Article 301 of the Constitution The court then explained the nature of compensatory taxes by holding (hat the taxes are compensatory taxes which instead of hindering the trade, commerce or intercourse facilitate them by providing roads and maintaining the roads in a good state of affairs. Whether a tax is compensatory or not cannot be made to depend on the preamble of the law imposing it nor it would be right to say that the tax is not compensatory because the precise or specific amount collected is not actually used for providing any facilities. The working test for deciding whether a tax is compensatory or not, according to the court, is to enquire whether the trade people are having the use of certain facilities for the better conduct of their business and paying not patently much more than what is required for providing the facilities. The working test for deciding whether a tax is compensatory or not, according to the court, is to enquire whether the trade people are having the use of certain facilities for the better conduct of their business and paying not patently much more than what is required for providing the facilities. Application of these tests to the provisions of the Act led the court to hold that the same: did not violate the provisions of Article 301 of the Constitution and the taxes imposed under the Act were compensatory in nature, which do not hinder the freedom of trade, commerce and intercourse assured by the said Article. There is also nothing in this judgment to hold that every law made in exercise of powers under Entry 56 of State List will be regulatory or compensatory in nature. Indeed, the legal principles enunciated in Atibari Tea Companys case were held to be correct and it was only the application of those principles to the particular law that lead the court to hold that the Act was not hit by Article 301 of the Constitution. This was not a case where the tax was charged for carriage of goods by road, as in Atibari Tea Companys case. The Act under consideration dealt with the imposition of tax on use of motor vehicle in a public place or kept for use in Rajasthan, The provisions of this Act are not identical to the Act under consideration and hence this decision would not be sufficient to hold that the provisions of Article 301 would not be attracted in the instant case. 14. Yet another case not referred to in International Tourist Corporations case, but relevant for our purpose is the decision in Khyerbari Tea Co. Ltd and another y. State of Assam and others, AIR 1964 SC 925, which dealt with the constitutional validity of Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961. It may be recalled that the Supreme Court in Atibari Tea Companys case had held that the Assam Taxation (on Goods Carried by Roads or Inland Waterways) Act, 1954, was unconstitutional being violative of Article 301 of the Constitution. Following the aforesaid judgment, the Assam Legislature enacted the Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961. The Act also received the assent of the President subsequently. Following the aforesaid judgment, the Assam Legislature enacted the Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961. The Act also received the assent of the President subsequently. The constitutional validity of the Act was challenged by filing writ petitions in the Assam High Court, which held that the Act was unconstitutional. Since, in the meantime, the decision in Automobile Transport Limiteds case had been rendered, the matter was given further detailed consideration. The court, on a detailed consideration once again held that the Act was referable to Entry 56 of the State list and hence the Assam Legislature had the legislative competence to enact the same. Since the Act had received the assent of the President and had satisfied the requirement of Article 304 (b), the court was required to consider whether a validating taxation statute can, also operate retrospectively. According . to the court, though there are some provisions in the Constitution which prohibit retrospective legislation, such as Articles 20 (1) and (2). But Article 304 (b) cannot be construed to mean that a law passed under it must in every case be prospective. The law under it, according to the i court, can also be retrospective. If a statute, under this provision, is passed retrospectively, its reasonableness may require consideration on merits but that is not to say that a validating tax law passed under Article 304 (b) would be invalidated solely because it operates retrospectively. The court, therefore, undertook the exercise to ascertain whether the restrictions imposed by the Assam Act were in public interest and reasonable. Considering the fact that the purpose of the taxation was to raise revenue for keeping the waterways and roads in good condition in the State it was held to be in public interest and a reasonable restriction on the freedom under Article 301. The court in ultimate analysis, therefore, held that the Act was valid. This case, inspite of the decision in Automobile Transport Limited case, holds that tax on goods carried by road is a restriction on freedom of trade and commerce guaranteed under Article 301 of the Constitution and hence such a tax can be accepted as valid only if the provisions of Article 304 (b) of the Constitution were complied with. This case, inspite of the decision in Automobile Transport Limited case, holds that tax on goods carried by road is a restriction on freedom of trade and commerce guaranteed under Article 301 of the Constitution and hence such a tax can be accepted as valid only if the provisions of Article 304 (b) of the Constitution were complied with. This case is also not the authority for the proposition that the Act covered under Entry 56 of the State list is necessarily compensatory or regulatory. This case and the Atibari Tea Companys case, on the contrary, hold that the Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961. imposed restrictions on trade and commerce covered under Article 301 and hence it was necessary to comply with the requirements of Article 30\ (b) of the Constitution. It may also be mentioned that in Atibari Tea Companys case, the Supreme Court had struck down the earlier Assam Act on the ground that it did not had the assent of the President, as required under Article 304 (b) of the Constitution. The subsequent Act of 1961 was held valid only because the same had received the assent of the President and thus complied with the requirements of Article 304 (b) of the Constitution. These cases, therefore, are sufficient to hold that Acts like Assam Act would attract application of Article 301 and require compliance of Article 304 (b) of the Constitution. 15. Since the Act under consideration in these writ petitions is substantially similar to the Assam Act, there is no reason why these decisions should not govern the present case In this view of the matter, the observations of the Supreme Court in International Tourist Corporations case cannot really be accepted as laying down any law different than the law laid down in the aforesaid cases. In this connection, it may be noticed that Atibari Tea Companys case continues to be accepted as laying down the law on the subject as would be clear from the recent decision in State of Tamil Nadu and others v. M/s. Sanjeetha Trading Co. and others, (1993) 1 SCC 236. The Haryana Passengers and Goods Tax Act, which was under consideration in the said judgment is not similar to the Act under consideration in these writ petitions. and others, (1993) 1 SCC 236. The Haryana Passengers and Goods Tax Act, which was under consideration in the said judgment is not similar to the Act under consideration in these writ petitions. The mere fact that the said Act and the Act under consideration in these writ petitions are referable to Entry 56 of State list in the Constitution would, by itself, not be sufficient to hold that the impugned Act is regulatory or compensatory in nature. Under the circumstances, the only way to save the constitutionality of the impugned Act was to secure compliance of Article 304 (b) of the Constitution. Admittedly, this has not been done and hence the impugned Act must be held to be violative of Article 301 of the Constitution. This was also the view of the earlier Bench of this court in Yash Pal Gargs case. Though, we are not entitled to doubt the correctness thereof and reconsider the same, we have undertaken this exercise only to re-enforce the correctness of the aforesaid judgment. This exercise, in our opinion, would also settle the controversy. The nature of the law is not what its preamble states it to be. The nature of the law will have to be determined on the totality of the provisions of the particular Act, examined, in the context of law, on the subject. 16. In this view of the matter, it is not possible to accept the opinion of the respondent-State Government expressed in the Statement of Objects and Reasons that this court had not earlier considered the true nature of the levy. Thus, it would have been appropriate for the respondent-State to either secure compliance of Article 304 (b) of the Constitution, in case they wanted to re-enact the law on the subject or await the decision of the Supreme Court, which has been approached by them. 17. Though the aforesaid is sufficient to allow these writ petitions, it is considered necessary to deal with yet another controversy fully argued by the learned Counsel for the parties. It is the case of the petitioners that the impugned Act has been passed with a view to over-rule the judgment of the High Court in Yash Pal Gargs case and that too during the pendency of the matter in the Supreme Court and hence the exercise of legislative power is colourable. It is the case of the petitioners that the impugned Act has been passed with a view to over-rule the judgment of the High Court in Yash Pal Gargs case and that too during the pendency of the matter in the Supreme Court and hence the exercise of legislative power is colourable. The facts, as have been noticed earlier, would clearly indicate that the amount of tax collected under 1976 Act has been validated under the impugned Act. It has also been noticed that though an appeal has been filed in the Supreme Court, against the judgment of this court in Yash Pal Gargs case, the Supreme Court has not stayed the operation of the judgment but has only stayed the direction for refund of tax collected. It has also been noticed that by the aforesaid process, the decision of this court in Yash Pal Gargs case has been over-ruled and the pending appeal in the Supreme Court rendered infructuous. There cannot be any dispute that the State Legislature has the competence to enact laws within its allotted spheres under the Constitution It is also well settled that the Legislature in exercise of the aforesaid legislative power can legislate retrospectively. It is, at the same time, equally well settled that the Legislature does not have any judicial power and hence it can over-rule a judgment passed by a competent court. In this connection, a recent decision of the Supreme Court in the matter of Cauvery Water Disputes Tribunal, AIR 1992 SC 522, para 17, may be looked into. It is well known by now that the said Cauvery Water Disputes Tribunal was constituted by the Central Government under the Inter-State Water Disputes Act, 1956. The said Tribunal had passed an interim order on 25th June, 1991. In order to avoid the effect of the aforesaid interim order, the Governor of Karnataka passed, in exercise of power under Article 231 of the Constitution, the Karnataka Cauvery Basin Irrigation Protection Ordinance, 1991. The provisions of the said Ordinance were given over-riding effect on the order of the Tribunal It was in that context that the Supreme Court was required to decide whether the Ordinance making power can be exercised so as to nullify the order passed by a statutory Tribunal in accordance with law. The provisions of the said Ordinance were given over-riding effect on the order of the Tribunal It was in that context that the Supreme Court was required to decide whether the Ordinance making power can be exercised so as to nullify the order passed by a statutory Tribunal in accordance with law. The court referred to its earlier decision in Municipal Corporation of the City of Ahmedabad v. New Shorock Spg. and Wvg. Co. Ltd., AIR 1970 SC 1292, and held that the legislatures under the Constitution have, within the prescribed limits, power to make laws prospectively as well as retrospectively By exercise of those powers a legislature can remove the basis of a decision rendered by a competent court thereby rendering the decision ineffective. But no legislature in the country has power to ask the instrumentalities of the State to disregard or disobey the decisions given by the courts. The court also referred to its earlier decisions in Madam Mohan Pathak v. Union of India, AIR 1978 SC 803 and P. Sambamurthy v. State of Andhra Pradesh, AIR 1987 SC 663, and held that : "It is a basic principle of the rule of law that the exercise of power by the executive or any other authority must not only be conditioned by the Constitution but must also be in accordance with law, and the power of judicial review is conferred by the Constitution with a view to ensuring that the law is observed and there is compliance with the requirement of the law on the part of the executive and other authorities. It is through the power of judicial review conferred on an independent institutional authority such as the High Court that the rule of law is maintained and every organ of the State is kept within the limits of the law. If the exercise of the power of judicial review can be set at naught by the State Government by overriding the decision given against it, it would sound the death-knell of the rule of law. The rule of law would be meaningless as it would be open to the State Government to defy the law and yet get away with it." The court, therefore, held that the legislature does not have any right to set aside any particular decision. The rule of law would be meaningless as it would be open to the State Government to defy the law and yet get away with it." The court, therefore, held that the legislature does not have any right to set aside any particular decision. In this connection, it is also necessary to refer to the decision in the State of Haryana and others v. The Karnal Cooperative Farmers Society Limited etc. etc , 1993 (1) Scale 812, wherein it has been emphasised, once again, that under our Constitution no Legislature has the power to abrogate civil courts decrees or orders or judicial adjudications by merely declaring under a law made by it that such decrees or orders or adjudications are no longer valid or binding on the parties, for such power of declaration would be a judicial function which cannot be encroached upon by a Legislature and the only way by which a competent Legislature can make the judicial adjudications, decrees or orders ineffective is by fundamentally altering the law on which they are based, is well settled. The court has, in this decision, referred to its earlier decisions in Shri Prithvi Cotton Mills Ltd and another v. Broach Borough Municipality and others, 1970 (1) SCR 388 ; Government of Andhra Pradesh and Kutubullahpur Gram Panchayat v. Hindustan Machine Tools Ltd, 1975 (Supp) SCR 394 ; Smt. Indira Nehru Gandhi v. Shri Raj Narain, 1976 (2) SCR 347 ; Misrilal Jain etc. v. State of Orissa and another, 1977 (3) SCR 714 and N. Saksena v. The State of Madhya Pradesh, 1976 (3) SCR 237, to reach the aforesaid conclusion. Under the circumstances, there should be no doubt in the mind of anyone that though the basis for the decision of this court can be altered by enacting a law in accordance with the Constitution, the decision by itself cannot be over-ruled. The distinction between making a decision "ineffective" by amending the law on which it is based and "over-ruling" the decision must, therefore, be clearly understood. In the instant case, no principle of law involved in 1976 Act has been changed by the impugned Act. The impugned Act only seeks to over-rule the decision of this court and hence must for that reason held to be invalid. 18. The writ petitions consequently succeed and are allowed. In the instant case, no principle of law involved in 1976 Act has been changed by the impugned Act. The impugned Act only seeks to over-rule the decision of this court and hence must for that reason held to be invalid. 18. The writ petitions consequently succeed and are allowed. The Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1991 (Act No. 10 of 1991) is declared ultra vires and void ab initio. Under the circumstances, the respondent-State is directed to stop forthwith collection of tax under the aforesaid law and also refund the tax already collected. The petitioners would also be entitled to costs of these petitions. Counsel fee Rs. 500 in each case.