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2002 DIGILAW 192 (PAT)

Manoj Sahay v. State Of Bihar

2002-02-08

NAGENDRA RAI, P.N.YADAV

body2002
Judgment 1. In all the twenty writ applications, since common questions of law are involved, they have been heard together and are being disposed by this order. 2. The writ petitioners in all the cases are owners of the motor vehicles, namely, trucks, mini-bus, tanker etc. They are aggrieved by the seizure of their vehicles by the authorities of the State of Bihar on the ground of non-payment of taxes under the Bihar Motor Vehicle Taxation Act (for short the Act) as well as for violation of the provisions of the Motor Vehicles Act (hereinafter referred to as the M. V. Act for not possessing ownerbook, route permit, insurance certificate etc. 3. The petitioners of C.W.J.C. Nos. 14613 of 2001, 15014/1991, 15543/2001, 15614/2001, 15633/2001, 15825/2001, 15859/2001, 15920/2001, 129/2002, 131/2002, 225/2002, 415/2002 and 503/2002 have the permits granted by the Transport Authorities of the erstwhile State of Bihar and they are still valid. 4. The petitioners of C.W.J.C. Nos. 14981/2001 and 15730/2001 have been granted permits by the Transport Authorities of the Jharkhand State after bifurcation of the State and the petitioners of C.W.J.C. Nos. 15111/2001, 16012/2001 and 428/2002 have not made any statement with regard to the grant of permits. 5. So far as the payment of tax under the provisions of the Act is concerned, in all the cases taxes have been paid before the concerned authority of the Jharkhand State after the bifurcation of the erstwhile State of Bihar for a period of three months. The case of the petitioners is that the permits have been granted by the concerned Transport Authority of the erstwhile State of Bihar before the bifurcation and they are still valid and they will remain valid for both the States of Bihar and Jharkhand even after bifurcation in view of the provisions contained under Sec. 67(2) of the Bihar Reorganisation Act, 2000 , and as such the authorities cannot seize the vehicle for not holding a valid permit. Their further case is that their vehicles also cannot be seized for non-payment of tax under the Act for the reasons that the payment of tax in the Jharkhand State will be also valid for the State of Bihar for the simple reason that the Act has application to the entire territorial jurisdiction of the erstwhile State of Bihar in view of the provisions contained in Sec. 84 of the Bihar Reorganisation Act and as such the authorities of the State of Bihar cannot, therefore, seize the vehicles for non-payment of tax in the State of Bihar under the provisions of the Act. Their alternative stand is that even if the petitioners will be held liable to pay tax under the Act for use of roads in the State of Bihar, they will be levied to pay tax only when the amount of tax is redetermined with reference to the remaining roads in the State of Bihar after bifurcation. In other words, their stand is that the tax was being levied for the use of the roads in the erstwhile State of Bihar and once the State having been bifurcated into two States, tax liability will be reduced to the extent of the length of the road remaining in the State of Bihar and as such the State authority cannot demand the same amount of tax. 6. In some cases the vehicles have also been seized for violation of the other provisions of the M.V. Act but we are not concerned with the same in the case for the reason that no submission has been made with regard to the same. This apart, there is adequate remedy under the provisions of the M. V. Act for agitating the matter. 7. The stand of the State is that the Act is a regulatory measure imposing compensatory taxes on the owner of the registered motor vehicle for the use of the public roads and the said tax is imposed for the purpose of raising revenue to meet the expenditure for providing and maintaining roads as well for facilitating the movement and regulation of traffic. Thus, the tax is collected for the service provided by the State for safe, easy and smooth movement of the vehicle and no motor vehicle can ply or be kept for plying in the State of Bihar without paying tax as provided under Secs. Thus, the tax is collected for the service provided by the State for safe, easy and smooth movement of the vehicle and no motor vehicle can ply or be kept for plying in the State of Bihar without paying tax as provided under Secs. 5 and 14 of the Act. If the transport vehicle registered outside the State of Bihar is used or kept for use in the State of Bihar, it is liable to pay tax under Sec. 14 of the Act at the rates specified under the Act. It is further stated that so far as the permits, which have been granted by the authorities of the erstwhile State of Bihar, prior to 15-11-2000 are concerned, the same will be valid for the remainder period in both the successor States under the provisions of Sec. 67(1) of the Bihar Re-organisation Act. So far as the payment of tax under the Act is concerned, it is not covered by Sec. 67(2), which provides that no tolls, entrance fee or other charges of like nature shall be levied after the appointed day on a transport vehicle playing under such permit, that is to say the permit granted prior to 15-11-2000 by either of the States. The imposition of tax under the Act is not a toll and as such the payment of liability of tax is not saved by the aforesaid provision. It is further stated that the permit granted prior to the bifurcation of the State is valid up to the remainder of the period in both the States but it will also become invalid under Sec. 25 of the Act for non-payment of tax within the prescribed period under the said provision. It is further stated that to prevent the evasion of tax under the Act, special checking squads have been deployed with adequate powers under the M. V. Act at the major entry points of National and State Highways. They have powers to realise tax and issue tax token at the checking point itself. The provision has also been made to pay tax to the District Transport Officers under the Act. They have also been given power to compound offences or to release vehicle on payment of tax etc. They have powers to realise tax and issue tax token at the checking point itself. The provision has also been made to pay tax to the District Transport Officers under the Act. They have also been given power to compound offences or to release vehicle on payment of tax etc. only when the vehicle owner has failed to pay tax due to the State of Bihar and the vehicles were seized under the provisions of Sec. 22 of the Act or other provisions of the M.V. Act. The further case of the State is that the rate of tax under the Act was last fixed in 1994 and there has been substantial increase in the price index. The cost of maintenance of roads and administration of transport has increased. The length of National Highway and State Highways has also increased in the existing State of Bihar. The length of the National Highway is about 3500 K.Ms. and that of the State Highways is 13500 K.Ms. and for the maintenance of which a sum of minimum of Rs. 365 crores is annually required, whereas, the total tax revenue from the transport section is not more than 200 crores, which is grossly inadequate even for maintenance of roads what to talk of expansion and the cost of administration of transport and as such there was no question of reducing the tax on the ground that the length of the road has decreased due to the bifurcation of the State. 8. It is to be stated that the learned counsel appearing for the State of Jharkhand has produced a copy of the notification dated 18-1-2002, whereby the State of Jharkhand has adopted the provisions of the Bihar Motor Vehicle Taxation Act with only modification in its name and has named the same as Jharkhand Motor Vehicle Taxation Act, 2001. The Act has come into force from 15-11-2000. 9. Learned counsel appearing for the petitioners in all the writ applications have confined their challenge only with regard to the seizure of the vehicles on the ground of not keeping valid permits as well as for not paying the tax under the provisions of the Act. The Act has come into force from 15-11-2000. 9. Learned counsel appearing for the petitioners in all the writ applications have confined their challenge only with regard to the seizure of the vehicles on the ground of not keeping valid permits as well as for not paying the tax under the provisions of the Act. Their contention is that the Act was enacted by the erstwhile State of Bihar and it will remain in force to the territorial jurisdiction of Jharkhand State also in view of the provisions contained in Sec. 84 of the Bihar Re-organisation Act and as such the tax paid under the aforesaid provisions in the State of Jharkhand will be also valid for the entire State of Bihar and the concerned authority under the Act cannot seize a vehicle for non-payment of tax in the State of Bihar. In this connection, they have also made reference to the provisions of Sec. 67(2) of the Bihar Re-organisation Act. It was also contended that even if it is assumed that the Act is applicable and once the owners of the vehicles used the road inside the State of Bihar, they are liable to pay tax but the levy of tax under the Act at the old rate is invalid as it will lose the character of compensatory nature and will become tax impeding the trade, commerce etc. and violative of Article 301 of the Constitution of India unless the rate of tax is reduced by the State of Bihar keeping in view the reduction of the length of the road after bifurcation. The tax as leviable by the erstwhile State of Bihar cannot be demanded from them and for non-payment of the same, their vehicle cannot be seized. They further submitted that the permits, which were granted by the Regional Transport Authorities or the State Transport Authority of the erstwhile State of Bihar will be valid for both the successor States in terms of the provisions of Sec. 67(2) of the Bihar Re-organisation Act and as such the vehicle cannot be seized on the ground of not holding a fresh valid permit by the authorities of the State of Bihar for playing the vehicle in this State. 10. 10. Learned counsel appearing for the State, on the other hand, fairly conceded that so far as the permits granted by the Regional Transport Authorities or the authorities of the erstwhile State of Bihar prior to appointed day are concerned, if they have been granted for a period after the appointed day and are still valid then the permit-holders can ply their vehicle in both the successor States of Bihar and Jharkhand till the validity of the period unless the permits are cancelled in accordance with law before expiry of the period. He further submitted that so far as the payment of the tax under the Act is concerned, none of the petitioners has paid tax after the appointed day in the State of Bihar. They have paid tax in the Jharkhand State. The Jharkhand State has already enacted the Jharkhand Motor Vehicle Taxation Act, which became operative with effect from 15-11-2000 and as such all the taxes paid will be deemed to be the taxes paid under the Jharkhand Motor Vehicle Taxation Act for the use of the motor vehicles in the State of Jharkhand. Any owner of the vehicle using the roads in the State of Bihar is liable to pay tax under the provisions of the Act once he uses the road inside the territory of the State of Bihar. It was further submitted that there is no question of revising the tax under the Act on the ground of reduction in the length of the roads after bifurcation. The tax determined in 1994 is itself very low taking into consideration the amount required for the construction and maintenance of roads as well as for providing other facilities. The State Government has taken steps to revise the tax also and as such there is no question of reducing the tax as provided under the act. 11. Before considering the rival contentions, it is necessary to state the relevant provisions having bearing on the question in controversy. The Parliament in exercise of the power under Art. 3 of the Constitution of India enacted the Bihar Re-organisation Act, 2000, according to which on 15-11-2000 out of the erstwhile State of Bihar, two States came into being, namely, State of Bihar and the State of Jharkhand. The Parliament has also made provision with regard to supplemental, incidental and consequential matters. The Parliament has also made provision with regard to supplemental, incidental and consequential matters. Part VII of the Bihar Re-organisation Act contains provisions to certain Corporations. Sec. 67 falling under the aforesaid Part contains temporary provisions as to continuance of certain existing road transport permits, which runs as follows :- "67. Temporary provisions as to continuance of certain existing road transport (1) Notwithstanding anything contained in Sec. 88 of the Motor Vehicles Act, 1988, a permit granted by the State Transport Authority of the existing State of Bihar or any Regional Transport Authority in the State shall, if such permit was, immediately before the appointed day, valid and effective in any area in the transferred territory, be deemed to continue to be valid and effective in that area after that day subject to the provisions of that Act as for the time being in force in that area; and it shall not be necessary for any such permit to be countersigned by the State Transport Authority of Jharkhand or any Regional Transport Authority therein for the purpose of validating it for use in such area : Provided that the Central Government may, after consultation with the successor State Government or Governments concerned add to, amend or vary the conditions attached to the permit by the Authority by which the permit was granted. (2) No tolls, entrance fees or other charges of a like nature shall be levied after the appointed day in respect of any transport vehicle for its operations in any of the successor States under any such permit, if such vehicle was, immediately before that day, exempt from the payment of any such toll, entrance fees or other charges for its operations in the transferred territory : Provided that the Central Government may, after consultation with the State Government or Governments concerned, authorise the levy of any such toll, entrance fees or other charges, as the case may be." 12. Sec. 67(1) of the Bihar Re-organisation Act provides that if the permit granted by the concerned authority of the erstwhile State of Bihar under the M. V. Act prior to appointed day was operative and effective into any area falling under the transferred territory (which means the territory transferred to Jharkhand State in terms of definition of Clause 2(k)) then that permit will be also valid in that area for the remainder period and there is no requirement of a counter-signature by the concerned authority of Jharkhand State for the purpose of validating it for use in such area. In other words, the permit granted by the erstwhile State of Bihar will be valid for State of Bihar as well as for the State of Jharkhand after bifurcation for the remainder period without any counter-signature as required by Sec. 88 of the M. V. Act. Sub-sec. (2) of S. 67 of the Act provides that no tolls, entrance fees or other charges will be charged after the appointed day for any transport vehicle for its operations in any of the successor States under such permits as mentioned in Sub-sec. (1) if the vehicle before the appointed day was not liable to pay tolls, entrance fee or other charges for its operation in the transferred territory (Jharkhand State). 13. Part X contains provisions with regard to Legal and Miscellaneous Provisions. Sec. 84, which falls in this Part, deals with the territorial extent of laws and Sec. 85 deals with the power to adapt laws, which are as follows :- "84. Territorial extent of law - The provisions of Part II of this Act shall not be deemed to have effected any change in the territories to which any law in force immediately before the appointed day extends or applies, and territorial references in any such law to the State of Bihar shall, until otherwise provided by a competent Legislature or other competent authority be construed as meaning the territories within the existing State of Bihar before the appointed day. 85. 85. Power to adopt laws - For the purpose of facilitating the application in relation to the State of Bihar or Jharkhand of any law made before the appointed day, the appropriate Government may, before the expiration of two years from that day, by order, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent Legislature or other competent authority" 14. A conjoint reading of the aforesaid sections shows that even the bifurcation of the erstwhile State in two successor States will not result in the abrogation or repeal of the laws, which were immediately in force before the appointed day in those territories and the territorial reference in such law to the State of Bihar shall be construed as meaning the territories within the existing State of Bihar before the appointed day. In other words, the laws which were in force prior to the appointed day will continue with regard to the entire territories after bifurcation unless a competent Legislature or the competent authority of the successor State effects any change in those laws. Sec. 85 of the Bihar Re-organisation Act empowers the appropriate Government before expiry of two years to adapt the existing law of the erstwhile State of Bihar, with or without modification. 15. Under the provisions of the M. V. Act, the owner of a motor vehicle or a person driving any motor vehicle is required to obtain registration for driving the vehicle in a public place. The registration done in one State will be valid throughout the country. Chapter V of this Act deals with the control of transport vehicles and Sec. 66 falling under the said Chapter requires necessity of permit, according to which the owner of a motor vehicle is required to obtain a permit in case of use of the vehicle as transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods. The procedure for grant of permit has been provided under the aforesaid Chapter. The State Transport Authority and the Regional Transport Authority are to be appointed by the State Government under Sec. 68 to exercise power to grant permits for the area as specified in the notification. The procedure for grant of permit has been provided under the aforesaid Chapter. The State Transport Authority and the Regional Transport Authority are to be appointed by the State Government under Sec. 68 to exercise power to grant permits for the area as specified in the notification. Sec. 88 deals with the validation of permits for use outside region in which granted and the permit granted by the Regional Transport Authority of any one region shall not be valid in any other region unless the permit has been countersigned by the Regional Transport Authority of that other region. Similarly, a permit granted in any one State shall not be valid in any other State unless countersigned by the State Transport Authority of that other State or by the Regional Transport Authority concerned. There is provision of an agreement between the two States also as contained in Sec. 88(5) but it is an enabling provision. There is also a provision for grant of national permit under Sec. 88(12) for which a composite fee is to be charged. 16. Thus, under the provisions of the M. V. Act, the permit granted by the authority of one State will be valid only in that State and to make it valid in other State, the counter-signature of that concerned authority is required or there should be a mutual agreement between the two States. 17. The State Government is competent to enact the Act. Imposition of tax is being made for raising the revenue to meet the expenses being incurred over the construction and maintenance of the roads as well as for facilitating the movement and regulation of traffic. An elaborate provision has been made for levy of tax under the Act. In case of default in payment of tax, there is a provision under the Act for prosecution, imposition of penalty etc. Sec. 5 of the Act is a charging section and it provides that every owner of the vehicle, who is using or kept for use of his vehicle in the State of Bihar, has to pay tax. Sec. 14 of the Act provides that even if vehicle is registered with the other State but in case it is being used or kept for use in the State of Bihar, the tax has to be paid under the provisions of the Act. Sec. 14 of the Act provides that even if vehicle is registered with the other State but in case it is being used or kept for use in the State of Bihar, the tax has to be paid under the provisions of the Act. Thus, according to the provisions of the Act, once the motor vehicle is used or kept for use in the State of Bihar, whether the permit is granted by the competent authority of the other State, tax has to be levied under the Act at the rate specified therein. 18. Sec. 67(1) of he Bihar Organisation Act as quoted above clearly provides that if a permit was granted under the provisions of the M. V. Act prior to the appointed day, even with regard to an area which now falls within the transferred territory (Jharkhand State), the permit will be valid for the remainder period and there is no requirement of a counter-signature by the authorities of the State of Jharkhand. As such, in cases where the permits have been granted by the concerned authority of the erstwhile State of Bihar, which are valid even after appointed day, such permits are valid in the State of Jharkhand as well as in the State of Bihar and the permit-holder can ply the vehicle in the State of Bihar as well as the State of Jharkhand and neither the concerned authority of Jharkhand not that of the State of Bihar can take any action for not holding a valid permit for the remainder period of the validity of the permit and as such any action taken on the ground that after the appointed day such permit holders have not obtained a fresh permit either from the State of Jharkhand or from the State of Bihar for the remainder period will be invalid in law unless for violation of any other law, the said permit becomes invalid in the eye of law. 19. So far as the question of payment of tax under the Act is concerned, at stated above, the State of Jharkhand has already adopted the Act and has named the same as Jharkhand Motor Vehicle Taxation Act, which has come into force with effect from 15-11-2000 though the notification was issued on 18-1-2002. 19. So far as the question of payment of tax under the Act is concerned, at stated above, the State of Jharkhand has already adopted the Act and has named the same as Jharkhand Motor Vehicle Taxation Act, which has come into force with effect from 15-11-2000 though the notification was issued on 18-1-2002. It is well-settled that the State Legislature has plenary power of legislation with regard to the fields occupied by it and they can legislate prospectively as well as retrospectively subject to certain constitutional restrictions. The notification of the State Government of Jharkhand adopting the Act in question clearly provides that it is applicable from 15-11-2000, meaning thereby that any tax paid by the owner of the vehicle even under the provisions of the Act will be treated to have been paid under the new Act. Nothing has been pointed out to show that there is any legal bar in making retrospective operation of the Act. Thus, in view of the aforesaid adaptation of the Act, Jharkhand Motor Vehicle Taxation Act became operative from 15-11-2000 and any amount deposited as a tax in the Jharkhand State will be deemed to be a deposit made under Jharkhand Motor Vehicle Taxation Act. No doubt, in terms of Sec. 84 of the Bihar Reorganisation Act, after creation of two successor States, the Act, which was in force prior to the bifurcation, will not stand abrogated and the territorial reference under the Act to the erstwhile State of Bihar will continue to mean the territories within that State Immediately before the appointed day, meaning thereby it will apply throughout the territory of the State of Bihar unless it is otherwise provided by a competent Legislature or the competent authority. The competent authority of the Jharkhand State has otherwise provided by enacting Jharkhand Motor Vehicle Taxation Act by adaptation, which has come into force from 15-11-2000 and as such the Act will cease to operate with regard to the territories falling within the Jharkhand State from the appointed day i.e. 15-11-2000. Thus, the petitioners cannot claim that once the tax has been paid in the successor State of Jharkhand after the appointed day, the same will be treated to be the payment of tax in the State of Bihar under the Act. Thus, the petitioners cannot claim that once the tax has been paid in the successor State of Jharkhand after the appointed day, the same will be treated to be the payment of tax in the State of Bihar under the Act. The tax under the Act is payable by owner for using or kept for using the roads in the State of Bihar and once the erstwhile State has been bifurcated, the transport vehicles of other States are used or kept for use on the roads of State of Bihar, the vehicle owner is liable to pay tax in terms of Sec. 14 of the Act as extracted above. Even assuming that the permits granted prior to appointed day are valid for the State of Bihar after the appointed day for the remaining period, then in that case also the liability of tax under the Act is not wiped out as the person, who has been granted permit by the authority of the State of Bihar is liable to pay tax under the Act in case of use of the transport-vehicle in the roads of State of Bihar. 20. Sec. 67(2) of the Bihar Re-Organisation Act has no application at all with regard to the payment of tax under the Act. It speaks of tolls, entrance fee and other charges and it further provides that no tolls, entrance fee etc. shall be levied after the appointed day in respect of any transport vehicle for its operation in any of the successor States if it has permit as referred to in Sub-sec. (1) of Sec. 67, provided the said vehicle was exempted from payment of tolls etc. for its operation in the transferred territory (territory falling in the State of Jharkhand). The tax is not covered by the aforesaid provision. There is a difference between the tax and toll. The tax under the Act, as stated above, is a compensatory tax. The toll means the payment realised for some benefits, such as for use of the market, bridge, temporary use of land etc. In case of Tolls the fee is levied according to the benefits taken which is not the case in the case of compensatory tax where it is difficult to measure the benefit with reference to collection of tax. The toll means the payment realised for some benefits, such as for use of the market, bridge, temporary use of land etc. In case of Tolls the fee is levied according to the benefits taken which is not the case in the case of compensatory tax where it is difficult to measure the benefit with reference to collection of tax. This part, even assuming that the tax is covered under Sec. 67(2) of the Bihar Reorganization Act, the petitioners cannot take benefit of the said provision. Sec. 67(2) of the said Act does not say that once the tax has been paid in the State of Jharkhand, the permit holder is exempted from paying the tax in the State of Bihar, on the other hand, it says that no tolls, entrance fees or other charges of like nature shall be levied after the appointed day in any of the successor States with regard to the motor vehicle having such permit as mentioned under Sec. 67(1), provided there was exemption from the payment of the same within the transferred territory i.e. the territory falling within the State of Jharkhand. 21. So far as the grievance of the petitioners that once the length of the road has been reduced after bifurcation of the erstwhile State of Bihar, the demand of the tax at the same rate as provided under the Act will not be a compensatory tax but will become a confiscatory tax or a tax not permissible under Art. 301 of the Constitution of India, is concerned, the same is also devoid of substance. The tax under the Act is a compensatory tax and it is levied upon those, who avail themselves of the services or convenience or advantage of the use of the roads in the State of Bihar. It does not hinder freedom of trade, commerce and intercourse assured by Article 301 of the Constitution and as such does not violate the provision of that Article. It is not necessary that the amount realised by levy of tax should be put either in a separate fund or levy of tax should be proportionate to the extent of rendered services nor is there any requirement that the collection of the amount should be to the extent of the expenditure incurred for providing benefit. It is not necessary that the amount realised by levy of tax should be put either in a separate fund or levy of tax should be proportionate to the extent of rendered services nor is there any requirement that the collection of the amount should be to the extent of the expenditure incurred for providing benefit. In this connection, it is relevant to refer to a Constitution Bench judgment of the Apex Court in the case of Automobile Transport (Rajasthan) Ltd. V/s. State of Rajasthan, reported in AIR 1962 SC 1406 as well as a decision of the Apex Court in the case of International Tourist Corporation V/s. State of Haryana, reported in AIR 1981 SC 774 . 22. In the case of Automobile Transport (Rajasthan) Ltd. (supra), the provision of the Rajasthan Motor Vehicles Taxation Act was under consideration and it was held that the tax imposed under the Act is compensatory tax, which facilitates the trade and commerce and is not a restriction and as such it does not violate Article 301 of the Constitution of India. It was observed in the said case as follows :- "19........Whether a tax is compensatory or not cannot be made to depend on the preamble of the statue 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 in providing any facilities. It is obvious that if the preamble decided the matter, then the mercantile community would be helpless and it would be the easiest thing for the Legislature to defeat the freedom assured by Art. 301 by stating in the preamble that it is meant to provide facilities to the tradesmen. Likewise, 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. 20. 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. 20. 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 expenses incurred in providing them are borne by the State out of whatever source it may be. In the cases under our consideration, the tax is based on passenger capacity of commercial buses and loading capacity of goods vehicles; both have some relation to the wear and tear caused to the roads used by the buses in basing the taxes on passenger capacity or loading capacity, the Legislature has merely evolved a method and measure of compensation demanded by the State, but the taxes are still compensation and charge for regulation. 22. We have, therefore, come to the conclusion that the Act does not violate the provisions of Article 301 of the Constitution and the taxes imposed under the Act are compensatory taxes which do not hinder the freedom of trade, commerce and intercourse assured by that Article. The taxes imposed were, therefore, legal and the High Court rightly dismissed the writ petitions by the appellants. In the result, the appeals fail and are dismissed with costs; one hearing fee." 23. After relying upon the aforesaid observation in the case of Automobile Transport Ltd. (supra), the Apex Court, at paragraph 1, in the case of International Tourist Corporation (supra), held as follows :- "10. 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. 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. 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........" 24. Thus, in a case of fee, it is possible to precisely identify and measure the benefits received from the Government and levy the fee according to the benefits received. It may be collected after taking into consideration the benefits and the expenditure incurred. But in the case of regulatory and compensatory tax, it is difficult to identify and measure with certainty the benefits received and the expenditure incurred and levy the tax according to the benefits received and the expenditure incurred. What is important to uphold a regulatory and compensatory tax is that there should be a specified and identifiable object and if the object behind the levy is identifiable and there is sufficient nexus between the subject and object of levy. It is not necessary that it should be proportionate to the expenditure. It is also not necessary at all in such a case to prove that the total amount of tax is spent for conferring the benefits. 25. In that view of the matter, only on the ground that the length of the road has been reduced after bifurcation, the petitioners cannot challenge the levy of tax collected under the Act by asking the Court to apply the standard/principle which governs the levy of fee. 25. In that view of the matter, only on the ground that the length of the road has been reduced after bifurcation, the petitioners cannot challenge the levy of tax collected under the Act by asking the Court to apply the standard/principle which governs the levy of fee. This apart, as stated above, the counter-affidavit filed on behalf of the State clearly shows that there is a proposal to enhance the rate of tax in view of the requirement of money for repair and maintenance of roads as the total tax revenue from the Transport section is not more than 200 crores, whereas, the annual expenditure for maintenance, repair of roads etc. is 365 crores. Thus, there is no merit in the submission advanced on behalf of the petitioners. 26. In some of the cases, as mentioned above, it is not stated that they have been granted permits by the authority of the erstwhile State of Bihar and that they are valid even after the appointed day. In some of the cases, the permits have been granted by the authority of the Jharkhand State after bifurcation and in some of the cases they have no valid permits at all. So far as those cases are concerned, the owners of the vehicle cannot claim any benefit of the provisions as contained in Sec. 67(1) of the Bihar Reorganisation Act and the action taken by the authorities under the provisions of the M. V. Act for not holding a valid permit etc. cannot be faulted and such petitioners may move the authorities concerned and the authorities are free to take action as provided under the provisions of the M. V. Act. 27. Thus, our conclusions are that where the transport permits are valid for remainder period by virtue of the provisions contained under Sec. 67(1) of the Bihar Reorganisation Act, no action can be taken against the permit holders for not holding permits granted by the authorities of this State after bifurcation as permits granted by the erstwhile State of Bihar are valid permits for the remainder period for both the States. The owners of the vehicles are liable to pay tax under the Act once the transport vehicles are used or kept for use on the roads of the State of Bihar as stated above. The owners of the vehicles are liable to pay tax under the Act once the transport vehicles are used or kept for use on the roads of the State of Bihar as stated above. Even if the permits are valid under the provisions of Sec. 67(1) of the Bihar Reorganisation Act, the permits will become invalid for certain period in view of the provisions contained under Sec. 25 of the Act, which provides that notwithstanding anything contained in M. V. Act, if the tax due in respect of a transport vehicle is not paid within the prescribed period under the Act, the permit shall be invalid from the date of expiry of the period till the tax is actually paid. Thus, even if the permit is valid but the tax is not paid, the provision of Sec. 25 of the Act will be attracted. 28. In the result, the writ applications are allowed in part subject to the directions as mentioned above. The authorities are free to take action in terms of the directions issued above and the provisions of the M.V. Act as well as the provisions of the Act according to law. The interim orders stand revoked. There shall be no order as to costs. Order accordingly.