Judgment :- This writ petition has been filed challenging the order of the Transport Commissioner, Chennai in Memo No.6491 I/E4/86 dated 4.7.1996. The petitioner is the owner of the stage carriage plying on the inter-State route Bangalore to Kelamangalam. The Permit of the above route was issued by State Transport Authority of Karnataka State and it is covered by the inter-State agreement entered into between the States of Mysore and Tamil Nadu in the year 1973. 2. The case of the petitioner is that the permit was originally given to the petitioner's father Chuddappah whereby he was entitled to entry of vehicle into Tamil Nadu State free of tax and was liable only for payment of tax to the primary State. Subsequently, the petitioner applied for variation of the route up to Royacottah and the primary Authority in Karnataka State granted the variation. However, the State Transport Authority of Tamil Nadu refused to counter sign the variation. The petitioner therefore filed an appeal before the State Transport Appellate Tribunal, Chennai, to direct the authority to counter sign the variation which was allowed and the State transport authority made the counter signature for the variation subject to payment of tax to Tamil Nadu. 3. The State Transport Authority demanded tax to be paid by the permit holder for the State of Tamil Nadu in respect of the variation. The petitioner therefore filed W.P.No.743 8 of.1986 before this Court and challenged the demand of tax. While admitting the write petition Court by way of an order in W.M.P.No.1 of 1986 granted interim stay. However, the order was vacated on 14.7.1987 and as a the same, the petitioner filed W.A.No.127 of 1987. The Division Bench of this Hon'ble in C.M.P.No.12961 of 1987 dated 17.9.1987 disposed of the writ appeal directing the appellant/petitioner herein to furnish a bank guarantee of Rs.20,000 (Rupees Twenty Thousand only) and the appellant/petitioner accordingly furnished the bank guarantee. One other condition passed by the Bench as extracted in the impugned proceedings is that the appellant petitioner should furnish security for the balance by an undertaking not to alienate the vehicle and with further direction that the petitioner should not ply the vehicle on the extended route from 1.9.1987. One other condition passed by the Bench as extracted in the impugned proceedings is that the appellant petitioner should furnish security for the balance by an undertaking not to alienate the vehicle and with further direction that the petitioner should not ply the vehicle on the extended route from 1.9.1987. It is relevant to point out that the demand for tax is for the period August 1986 to August 1987, as stated in Annexure 1 and Annexure 2 of the impugned proceedings. 4. Subsequently, the W.P.No.7438 of 1986 came to be dismissed on 3.1.1996 by the common order based on the judgment of the Supreme Court of India in C.A.Nos.2454-55 of 1980 dated 26.9.1991 and the liability for payment of tax was directed to be decided by the Government of Tamil Nadu. 5. In the meanwhile, the impugned proceedings of the Transport Commissioner came to be passed on 4.7.1996, demanding tax and penalty as follows: (a) According to the Clause 1 (a) of the Inter State Agreement published in G.O.Ms.No.1178 Home dt.30.4.1973 the routes mentioned in Appendix I to IV only are to be operated by the operators of both the States with the route specified therein. As the variation of permit involving extension of the route from Kelamangalam to Royacottah was outside the scope of Inter-State Agreement it was granted on a condition that the operator should pay separate tax to Tamil Nadu. (b) Further according to notification No. 11(2) Ho/1871 (U) 74 issued in G.O.Ms.No.817 Home dt.1.4.1974 Under Sec.20 of Tamil Nadu Motor Vehicles Taxation Act, 1974 the Motor Vehicles which ply in accordance with the agreement entered into with other States and published under Sec.63(3-B) of the Motor Vehicles Act, 1939 (repealed) alone are exempted from payment of tax in this State. The Motor Vehicle Act, 1939 and the Taxation Act, 1974 are two different enactments. The notification under Taxation Act, referred to above is the basis to decide whether or not the vehicle in question is entitled for exemption. As the counter signature of permit granted in this case is outside the scope of Inter-State Agreement the operator is not entitled for the benefit of single point tax. The notification under Taxation Act, referred to above is the basis to decide whether or not the vehicle in question is entitled for exemption. As the counter signature of permit granted in this case is outside the scope of Inter-State Agreement the operator is not entitled for the benefit of single point tax. (c) In view of this, the single point tax concession cannot be conceded until the varied route Kelamangalam to Royacottah is included in the supplemental reciprocal agreement if any arrived at under Sec.88(6) of the Motor Vehicles Act, 1988. (d) Therefore the operator is bound to pay tax due to Tamil Nadu under the provisions of Tamil Nadu Motor Vehicles Taxation Act, 1974 and the notification made thereunder in respect of the vehicle. The amount of tax and penalty thereon in respect of stage carriage CAA 1467 lastly replaced by KA 05/6318 worked out to Rs.1,74,003 less to the bank guarantee for Rs.20,000 produced by the permit holder works out to Rs.1,54,003 for the period from 18.8.1986 to 31.8.1987 and in respect of spare bus CAM 1584 for the period from 18.8.1986 to 31.3.1987 works out to Rs.76,440 as shown in Annexure I and II has to be paid by the permit holder & Aggrieved by the said order the petitioner has filed this writ petition. The writ petition was admitted on 24.4.1997 and by order dated 20.6.1997, interim stay was granted for a period of four weeks. The interim order was made absolute on 26.8.2003. A counter has been filed refuting all the issues raised in the writ petition. Though several contentions were raised by the writ petitioner in his challenge to the impugned proceedings, the counsel for the writ petitioner while arguing the matter at the time of final disposal fairly conceded that the writ petitioner is willing to pay the tax as determined in the Annexure 1 and Annexure 2 of the impugned proceedings without any demur. 6. The learned counsel for the writ petitioner however pleaded that so far as the penalty is concerned he is not liable to pay the penalty, and the levy is not sustainable. Learned counsel submitted that, in view of the fact that there was already an Inter-State Agreement in force and the Primary Authority had granted the variation and confirmed by the Appellate Tribunal, the Tamil Nadu State Transport Authority should have approved the same. Learned counsel submitted that, in view of the fact that there was already an Inter-State Agreement in force and the Primary Authority had granted the variation and confirmed by the Appellate Tribunal, the Tamil Nadu State Transport Authority should have approved the same. The Tamil Nadu State Transport Department did not grant the variation at the first instance however the tax was demanded. That petitioner filed W.M.P.No.10772 of 1986 in W.P.No.7438 of 1986 and obtained an order of stay and which was subsequently vacated and in view of the order of the Division Bench, a sum of Rs.20,000 (Rupees Twenty Thousand only) was paid by way of bank guarantee at the earliest point of time and security was furnished for the balance. 7. The counsel for the petitioner further pointed out that in the impugned order itself it is observed that for the period for which the tax is demanded, there was an interim order passed by this Hon'ble Court. Further, petitioner submits that as directed by the Division Bench, writ petitioner did not ply the vehicle on the extended route from 1.9.1987. The petitioner has complied with all the conditions imposed by the Court and therefore the demand for penalty is liable to be set aside. The learned counsel for the petitioner refers to the order of this Court passed in W.P.No.13028 of 1995 dated 3.7.2002 in similar circumstances where tax and penalty was demanded and the Court granted interim orders subject to payment of arrears of tax in installments. In so far as penalty is concerned learned counsel for the petitioner referred to para.3 of the judgment which reads as follows: "The learned counsel has also relied upon an unreported judgment dated 9.2.1999 in WP.No.1901 of 1999 passed by the learned Single Judge of this Court, holding that if stay is granted as against the demand of tax, the operator is not liable to pay penalty for the period covered by the stay as the late payment of tax was due to intervention of the Court. Relying on the said decision, the learned counsel submitted that the petitioner is not liable to pay the Penalty of Rs.13,10,695. I agree with the said order and hold that the petitioner is not liable to pay the penalty demanded by the respondent. " 8. Relying on the said decision, the learned counsel submitted that the petitioner is not liable to pay the Penalty of Rs.13,10,695. I agree with the said order and hold that the petitioner is not liable to pay the penalty demanded by the respondent. " 8. In the above mentioned case the admitted tax was paid in installments as directed by the Court and in respect of the disputed tax the matter was relegated to the State Transport Authority to decide the petitioner's tax liability. As far as the penalty is concerned, the Court held that the operator was not liable to pay the penalty for the period covered by order of stay passed by the Court, as late payment of tax was due to intervention of Court. In the present case, pursuant to the order of the Division Bench of this High Court, the petitioner submitted a Bank Guarantee for Rs.20,000 Which has been given due credit in Annexure 1 of impugned order and for the balance, was given. The total tax due was not paid the first instance and the learned counsel the petitioner has undertaken to pay the at the time of the final hearing. There is there fore no challenge to the demand of tax is concerned. Further, the plea of the petitioner the tax demanded and payable by the petitioner during the relevant period was subject matter of writ proceedings in W.P.No.7438 of 19 and W.A.No.1278 of 1987 and pursuant to these proceedings, a portion of the amount was de posited as a Bank Guarantee and for the balance, security was given has also to be considered. The plea of the petitioner that the petitioner was granted variation by the primary Authority and Appellate Tribunal and therefore the petitioner was under the impression that o tax is due to the State of Tamil Nadu has some force. The petitioner was under the bonafide impression that no tax is payable for the variation to the State of Tamil Nadu. Hence, there is justification in the plea seeking relief in respect of penalty. 9. The petitioner was under the bonafide impression that no tax is payable for the variation to the State of Tamil Nadu. Hence, there is justification in the plea seeking relief in respect of penalty. 9. Taking into consideration the facts and circumstances of the case and the fact that there is no discussion on the issue regarding levy of penalty in the impugned proceedings, this Court feels that the levy of 200% penalty has been made without appreciation of relevant factors but merely incorporated in the annexure to the impugned order. Before levying penalty on petitioner there is no finding as to why penalty is being imposed. 10. In view of the above, the respondent is directed to consider the matter relating to levy of penalty afresh taking into consideration the interim order of this Court and various Court proceedings referred to in paras.3 and 4 of the impugned order dated 4.7.1996 and the observations of this Court passed in W.P.No. 13028 of 1995 dated 3.7.2002 referred to above and pass speaking order on merits. 11. The petitioner undertakes to deposit the tax liability within a period of four weeks from the date of receipt of a copy of this order. On payment as aforesaid the respondent is directed to consider the issue of penalty after affording a reasonable opportunity to the petitioner and pass an order in accordance with law. 12. The writ petition is ordered accordingly. No costs.