JUDGMENT Ms. Kamlesh Sharma, J.—These two writ petitions (C.W.P. No. 1266 of 1993 and C.W.P. No. 1305 of 1993) are being disposed of by a common judgment as these involve similar questions of fact and law. 2. In C.W.P. No. 1266 of 1993, petitioner No. 1 is a Co-operative Society of Truck Operators whereas Petitioner No. 2 is its Member and General Secretary. Similarly, in C.W.P. No. 1305 of 1993, the petitioner is a society registered under the Societies Registration Act of Tempo Operators. In C.W.P. No. 1266 of 1993, the petitioners have prayed for quashing Annexures P-D, P-E, P-G and P-H. A similar prayer has been made in the other C.W.P. No. 1305 of 1993 for quashing Annexures P-5 and P-6, which are the same as Annexures P-E and P-F. Therefore, we will refer to the Annexures in C.W.P. No. 1266 of 1993 in this judgment. Annexures P-D and P-E are the telex message from Ministry of Surface Transport, New Delhi, to the State Governments, including the State of Himachal Pradesh that as decided in the meeting of the Transport Development Council held on 18.8.1993, it is confirmed that the State Governments/Union Territories may now charge Rs. 5,000/- and Rs. 2,500/-, respectively, a composite fee in respect of National Permits with effect from 1.9.1993. By Annexures P-F and P-G, the State Government of Himachal Pradesh has further conveyed decision of enhancement of composite fee as contained in Annexures P-D and P-E to the Director, Department of Transport, Government of Himachal Pradesh, and the Pradhans of Truck Operators Unions. 3. The case set up by the petitioners is that the enhancement of composite fee of National Permits from 1,500/- for each State and Rs. 750/- for each Union Territory to Rs. 5,000/- and Rs. 2,500/ - respectively is without authority of law and is violative of Article 265 of the Constitution of India. The second ground for challenge is that it is violative of Sections 211 and 212 of Motor Vehicles Act, 1988 (hereinafter called "the Act"). The third ground is that by enhancing composite fee for National Permit, unreasonable restriction on the freedon of Trade has been imposed which is violative of Article 301 of the Constitution of India. 4. The second ground for challenge is that it is violative of Sections 211 and 212 of Motor Vehicles Act, 1988 (hereinafter called "the Act"). The third ground is that by enhancing composite fee for National Permit, unreasonable restriction on the freedon of Trade has been imposed which is violative of Article 301 of the Constitution of India. 4. Initially, only the State of Himachal Pradesh, the Regional Transport Authority and the State Transport Authority were impleaded as party respondents No. 1 to 3 besides Union of India as respondent No. 4. During the pendency of the writ petition, by interim order dated 14.9.1993, the operation of Annexures P-D to P-G was suspended which order was confirmed later on. The State of Punjab, the State of Haryana and the State of Rajasthan on their individual applications were impleaded as party respondents No. 5 to 7 respectively, who have also filed their seperate reply affidavits. In their affidavits dated 23.11.1993 and 15.11.1994, respondents No. 1 to 3 have raised preliminary objection that since the State of Himachal Pradesh gets only authorization fee of Rs. 500/- per annum per permit per truck having National Permit and the composite fee which has now been raised from Rs. 1,500/- to Rs. 5,000/- for each State is collected by its Transport authorities by Bank drafts payable to opted States and Union Territories, the other States and Union Territories are necessary parties who have a right of hearing in the present writ petition. On merits, the case of these respondents is that under the Scheme of National Permits, the holder of National Permit of goods carriage is required to pay the composite fee prescribed in accordance with the decision of the Transport Development Council, which is the highest advisory body of Ministry of Transport whose recommendations are accepted by the State Governments. According to these respondents Sections 212 and 213 of the Act are not attracted as composite fee for National Permit being in lieu of taxes is levied under the State Taxation Acts and Rules. These respondents have also placed on record the copies of Notifications issued by the States of Rajasthan, Uttar Pradesh, Madhya Pradesh, Karnataka, Kerala and Nagaland on record, issued under their respective Motor Vehicles Taxation Statutes as Annexures R-2 to R-7, fixing the composite fee for National Permit at the enhanced rate. 5. These respondents have also placed on record the copies of Notifications issued by the States of Rajasthan, Uttar Pradesh, Madhya Pradesh, Karnataka, Kerala and Nagaland on record, issued under their respective Motor Vehicles Taxation Statutes as Annexures R-2 to R-7, fixing the composite fee for National Permit at the enhanced rate. 5. The State of Rajasthan in its affidavit dated 28.10.1998 has taken the preliminary objection that the writ petition is bad for non joinder of necessary parties and deserves to be dismissed on this ground alone. It is alleged that the application for grant of authorization for issuance of National Permit to the Himachal Pradesh State Regional Transport Authority is made under the provisions of Section 88(12) of the Act and the Rules framed by the Central Government in that behalf on the prescribed form for that purpose, specifically stating the name of the State through which the vehicle under the National Permit is intended to be plied. The Himachal Pradesh State Regional Transport Authority while issuing the National Permit through the opted State is obliged to collect the amount of taxes or fee, if any, levied by the said States. Since the State of Rajasthan has levied tax of Rs. 5,000/- as per the Notification dated 27.8.1993, the H.P. State Regional Transport Authority is duty bound to collect the same before granting authorization for plying the vehicle through the State of Rajasthan under the National Permit. In these facts and circumstances, it is alleged that the State of Rajasthan is a necessary party. It is further explained that the Notification dated 27.8.1993 has been issued in exercise of the powers under Section 3 1 of the Rajasthan Motor Vehicles Act, 1951. It has also been averred that power of levying taxes by the State Government has been provided in Entry 56 and 57 of the State List in the Constitution of India. The stand taken by the States of Punjab and States of Haryana is also on similar lines. They have also placed on record their respective Notifications Annexures R-5 and R-III pertaining to Composite fee for National Permit issued in exercise of the powers derived from State Motor Vehicles taxation statutes applicable to them and sub-rule (2) of Rule 87 of the Central Motor Vehicles Rules, 1989 (hereinafter called "the Rules"). 6. They have also placed on record their respective Notifications Annexures R-5 and R-III pertaining to Composite fee for National Permit issued in exercise of the powers derived from State Motor Vehicles taxation statutes applicable to them and sub-rule (2) of Rule 87 of the Central Motor Vehicles Rules, 1989 (hereinafter called "the Rules"). 6. The Union of India, respondent No.4, has also filed reply affidavit dated 28.10.1993 stating that the composite fee for National Permit is not prescribed or fixed by it. The enhanced composite fee for National permit is recommended by the Transport Development Council which is the highest advisory body of the Ministry of Transport, whose recommendations are accepted by the State Governments and incorporated in their taxation statutes and rules. It has justified the increase in the composite fee for the National Permit in view of over all increase in prices, other taxes and also the rate charged by the Operators since 1986 when the fee of Rs. 1,500/- for each State and Rs. 750/- for Union Territories was fixed. As per its stand, even otherwise, the State Governments are fully competent to increase the rates of taxes from time to time to meet their requirements. 7. In order to appreciate the respective contentions of the parties, we may refer to the relevant provisions of law under which the National Permit is issued and composite fee or taxes in relation to grant of National Permit are levied. 8. The general provision as to application for permits is under Section 69 of the Act. 7. In order to appreciate the respective contentions of the parties, we may refer to the relevant provisions of law under which the National Permit is issued and composite fee or taxes in relation to grant of National Permit are levied. 8. The general provision as to application for permits is under Section 69 of the Act. It is: "(1) Every application for a permit shall be made to the Regional Transport Authority of the region in which it is proposed to use the vehicle or vehicles : Provided that if it is proposed to use the vehicle or vehicles in two or more regions lying within the same State, the application shall be made to the Regional Transport Authority of the region in which the major portion of the proposed route or area lies, and in case the portion of the proposed route or area in each of the regions is approximately equal, to the Regional Transport Authority of the region in which it is proposed to keep the vehicle or vehicles: Provided further that if it is proposed to use the vehicle or vehicles in two or more regions lying in different States, the application shall be made to the Regional Transport Authority of the region in which the applicant resides or has his principal place of business. (2) Notwithstanding anything contained in sub-section (1), the State Government may, by Notification in the official Gazette, direct that in the case of any vehicle or vehicles proposed to be used in two or more regions lying in different States, the application under that sub-section shall be made to the State Transport Authority of the region in which the applicant resides or has his principal place of business.” 8. National Permits are granted under sub-section( 12) of Section 88, which is as under:— "(12) Notwithstanding anything contained in sub-section (1) but subject to the rules that may be made by the Central Government under sub-section (14), the appropriate authority may, for the purpose of encouraging long distance inter-State road transport, grant in a State, national permits in respect of goods carriages and the provisions of Sections 69, 77, 79, 80, 81, 82, 83, 84, 85, 86, clause (d) of subsection (1) of Section 87 and Section 89 shall, as far as may be, apply to or in relation to the grant of national permits." 9. Sub-section (14) of Section 88 provides for making rules by the Central Government for carrying out the provisions of Section 88. The definition of words "appropriate authority", "authorization fee" and "national permit" is given in the Explanation to Section 88, as follows: "Appropriate authority" in relation to a national permit, means the authority which is authorized under this Act to grant a goods carriage permit; "Authorisation fee" means the annual fee, not exceeding one thousand rupees, which may be charged by the appropriate authority of a State to enable a motor vehicle, covered by the permit referred to in sub-section (9) and (12) to be issued in other States subject to the payment of taxes or fees, if any, levied by the States concerned. "National Permit" means a permit granted by the appropriate authority to goods carriages to operate throughout the Territory of India or in such contiguous States not being less than four in number, including the State in which the permit is issued as may be specified in such permit in accordance with the choice indicated in the application. 10. From the definition of "authorization fee", it is clear that it is charged by the appropriate authority of the State to enable the motor vehicle registered within its territory and covered by the permit referred to in sub-sections (9) and (12) of Section 88 to be used in other States subject to the payment of taxes or fee, if any, levied by the States concerned. Reference to the provisions of Rule 87(1) and (2) of Central Motor Vehicles Rules, 1989 (hereinafter called "the Rules") further makes it clear that in addition to "authorization fee" which is fixed at Rs. 500/- per annum, authorization for other States or National Permit is granted subject to payment of taxes or the fees levied by the States concerned. Rules 87(1) and 87(2) of the Rules read as follows: "87. Form contents and duration of authorization.—(1) An application for the grant of an authorization for a national permit shall be accompanied by a fee of rupees five hundred per annum in the form of a bank draft. (2) Every authorization shall be granted in form 47 subject to the payment of the taxes or fees, if any, levied by the concerned States." 11. (2) Every authorization shall be granted in form 47 subject to the payment of the taxes or fees, if any, levied by the concerned States." 11. The Rules have been made in exercise of the powers conferred by Sections 12,27,64, sub-section (14) of Section 88, Sections 110, 137, 164 and 208 read with Section 211 of the Act by the Central Government. Therefore, it is clear that besides the authorization fee of Rs. 500/- fixed under sub-rule (1) of Rule 87, taxes or fees levied by the concerned States for which authorization for the National permit is granted, are liable to be paid as provided under sub-rule (2) Rule 87 of the Rules. Since most of the States, except the State of Himachal Pradesh, have placed on record the Notifications issued in exercise of the powers under their respective Motor Vehicles Taxation statutes read with sub-rue (2) of Rule 87 of the Rules, which have not been challenged by the petitioners, we have no hesitation to hold that the composite fee as per the said Notifications is liable to be collected by the appropriate authorities of the State of Himachal Pradesh at the time of issuing National Permit for the opted State (s) besides its authorization fee of Rs. 500/-. There cannot be any doubt that the State Legislatures are competent to legislate regarding taxes on goods and passengers carried by road or on inland water ways as well as on vehicles, whether mechanically propelled or not, suitable for use on road including tram cars as provided under Entry 56 and 57 in List II appended to the Constitution of India and accordingly Motor Vehicles Taxation Acts have been passed by different States. 12. In this view of the matter, the decision contained in Annexure P-D and P-E by the Transport Development Authority is only of recommendatory nature on the basis of which most of the State Governments, except the Himachal Pradesh Government, have issued Notifications enhancing the Composite fee on National permit, which is in the nature of a tax levied in exercise of the powers under their respective Motor Vehicles Taxation statutes read with sub-rule (2) of Rule 87 of the Rules. Therefore, the directions issued by the Himachal Pradesh Government vide Annexures P-F and P-G for charging composite fee for National Permit on the recommendations of the Transport Development Council are wrong, illegal and liable to be quashed. However, it is made clear that the composite fee/taxes on National permit will be charged by the appropriate authorities for granting National Permit as per the Notification(s) issued by the opted State (s) concerned, which will be legal and in consonance with Sections 211 and 212 of the Act. The other contention is also misconceived that the Composite fee so charged will impose an unreasonable restriction on freedom of trade as it is compulsory exaction having been imposed under the provisions of law, the validity of which has not been challenged. 13. In the result, these writ petitions are disposed of with the following directions : (1) Annexures P-D and P-E are of recommendatory nature; (2) Annexures P-F and P-G have no force of law to charge composite fee as stated therein. Hence are quashed; (3) The appropriate authority of the State of Himachal Pradesh will grant National Permit by charging authorization fee of Rs. 500/- as well as Composite fee/taxes in accordance with Notifications issued by opted States under their respective Motor Vehicles Taxation Statutes and Rules as discussed above. In view of these directions, the interim order dated 14.9.1993 is vacated. No order as to costs. Petition allowed.