JUDGMENT : Kurian Joseph, C.J. The complexity of compensatory tax has been the subject matter of several litigations, mainly in the constitutional context of Articles 301 and 304 of the Constitution of India. Its subtle nicety in contradistinction to tax has been dealt with in the celebrated decision in Jindal Stainleess Ltd. (2) and another v. State of Haryana and others, reported in (2006) 7 SCC 241 . It has been held that in the case of tax, it is the principle of ability which is the guiding and relevant factor whereas in the case of compensatory tax, it is the principle of equivalence. In tax where there is no identification of a specified benefit and even if there is such identification, the same is not capable of direct measurement and the benefit if any is only incidental to the States action. But, in the case of compensatory tax, the quantifiable benefit is represented by the cost incurred in availing the facility or service and that cost in turn becomes the basis of the recompense for the service provided. Tax is for revenue whereas in compensatory tax, it is only the reimbursement or recompense to the service provider, a tax on recompense and thus it is in the shape of a fee for any particular service. Still further, it has been held that the guiding principle in compensatory tax is pay for the value and it is a sub class of a fee; it is a charge for offering trading facilities and adds to the value of trade and commerce which is not available and which is an irrelevant factor as far as the tax is concerned. It will be profitable to refer to the relevant paragraphs at 40, 41 & 42, which read as follows: "40. Tax is levied as a part of common burden. The basis of a tax is the ability or the capacity of the tax payer to pay. The principle behind the levy of a tax is the principle of ability or capacity. In the case of a tax, there is no identification of a specific benefit and even if such identification is there, it is not capable of direct measurement. In the case of a tax, a particular advantage, if it exists at all, is incidental to the States action. In the case of a tax, there is no identification of a specific benefit and even if such identification is there, it is not capable of direct measurement. In the case of a tax, a particular advantage, if it exists at all, is incidental to the States action. It is assessed on certain elements of business, such as, manufacture, purchase, sale, consumption, use, capital, etc. but its payment is not a condition precedent. It is not a term or condition of a licence. A fee is generally a term of a licence. A tax is a payment where the special benefit, if any, is converted into common burden. 41. On the other hand, a fee is based on the "principle of equivalence". This principle is the converse of the "principle of ability" to pay. In the case of a fee or compensatory tax, the "principle of equivalence" applies. The basis of a fee or a compensatory tax is the same. The main basis of a fee or a compensatory tax is the quantifiable and measurable benefit. In the case of a tax, even if there is any benefit, the same is incidental to the government action and even if such benefit results from the government action, the same is not measurable. Under the principle of equivalence, as applicable to a fee or a compensatory tax, there is an indication of a quantifiable data, namely, a benefit which is measurable. 42. A tax can be progressive. However, a fee or a compensatory tax has to be broadly proportional and not progressive. In the principle of equivalence, which is the foundation of a compensatory tax as well as a fee, the value of the quantifiable benefit is represented by the costs incurred in procuring the facility/services, which costs in turn become the basis of reimbursement/recompense for the provider of the services/facilities. Compensatory tax is based on the principle of "pay for the value". It is a sub-class of "a fee". From the point of view of the Government, a compensatory tax is a charge for offering trading facilities. It adds to the value of trade and commerce which does not happen in the case of a tax as such. A tax may be progressive or proportional to income, property, expenditure or any other test of ability or capacity (principle of ability). Taxes may be progressive rather than proportional. It adds to the value of trade and commerce which does not happen in the case of a tax as such. A tax may be progressive or proportional to income, property, expenditure or any other test of ability or capacity (principle of ability). Taxes may be progressive rather than proportional. Compensatory taxes, like fees, are always proportional to benefits. They are based on the principle of equivalence. However, a compensatory tax is levied on an individual as a member of a class, whereas a fee is levied on an individual as a member of a class, whereas a fee is levied on an individual as such. If one keeps in mind the "principle of ability" vis-à-vis the "principle of equivalence", then the difference between a tax on one hand and a fee or a compensatory tax on the other hand can be easily spelt out. Ability or capacity to pay is measurable by property or rental value. Local rates are often charged according to the ability to pay. Reimbursement or recompense are the closest equivalence to the cost incurred by the provider of the services/facilities. The theory of compensatory tax is that it rests upon the principle that if the Government by some positive action confers upon individual(s), a particular measurable advantage, it is only fair to the community at large that the beneficiary shall pay for it. The basic difference between a tax on one hand and a fee/compensatory tax on the other hand is that the former is based on the concept of burden whereas compensatory tax/fee is based on the concept of recompense/reimbursement. For a tax to be compensatory, there must be some link between the quantum of tax and the facility/services. Every benefit is measured in terms of cost which has to be reimbursed by compensatory tax or in the form of compensatory tax. In other words, compensatory tax is a recompense/reimbursement." 2. Still further, at paragraph 45, it has been held that the compensatory tax is hybrid by nature and it is closer to fee than tax. We may also extract paragraphs 44 & 45, which would be relevant in the instant case: "44. Since compensatory tax is a judicially evolved concept, understanding of the concept, as discussed above, indicates its parameters. 45. To sum up, the basis of every levy is the controlling factor. We may also extract paragraphs 44 & 45, which would be relevant in the instant case: "44. Since compensatory tax is a judicially evolved concept, understanding of the concept, as discussed above, indicates its parameters. 45. To sum up, the basis of every levy is the controlling factor. In the case of "a tax", the levy is a part of common burden based on the principle of ability or capacity to pay. In the case of "a fee", the basis is the special benefit to the payer (individual as such) based on the principle of equivalence. When the tax is imposed as a part of regulation or as a part of regulatory measure, its basis shifts from the concept of "burden" to the concept of measurable/quantifiable benefit and then it becomes " a compensatory tax" and its payment is then not for revenue but as reimbursement/recompense to the service/facility provider. It is then a tax on recompense. Compensatory tax is by nature hybrid but it is more closer to fees than to tax as both fees and compensatory taxes are based on the principle of equivalence and on the basis of reimbursement/recompense. If the impugned law chooses an activity like trade and commerce as the criterion of its operation and if the effect of the operation of the enactment is to impede trade and commerce then Article 301 is violated." 3. The tax levied under the Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1999, has been held to be a compensatory tax by the Apex Court in State of Himachal Pradesh v. Yash Pal Garg, reported in (2003) 9 SCC 92 . To quote from paragraph 23: "23. For a hilly area having heavy downpour every year, the roads require more expenditure for maintenance. For trade, commerce and intercourse, laying down of additional roads is also a necessity. The aforesaid facts were pointed out to the High Court, but the Court surprisingly arrived at the conclusion that as the State Government recovers only a part of the expenses incurred in construction and maintenance of roads and bridges, levy is not compensatory. As stated above, this reasoning cannot be sustained. The aforesaid facts were pointed out to the High Court, but the Court surprisingly arrived at the conclusion that as the State Government recovers only a part of the expenses incurred in construction and maintenance of roads and bridges, levy is not compensatory. As stated above, this reasoning cannot be sustained. In the present case, it is required to be held that the tax is compensatory in nature for giving better facilities to the passengers and traders, therefore, it would not come within the purview of restrictions contemplated under Article 301." 4. The question arising for consideration in this case is simple. Whether the industrial unit of the first petitioner engaged in the manufacture of clinker and cement is entitled to the benefit of exemption from payment of the tax under the Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1999 (hereinafter called the 1999 Act), in terms of Rule 19 of the Rules Regarding Grant of Incentives, Concessions & Facilities to Industrial Units in Himachal Pradesh, 2004 (hereinafter called 2004 Rules). The learned Single Judge has held in favour of the writ petitioner and thus aggrieved, the State has come up in appeal. It will be profitable to extract paragraph 20 of the judgment, which has summed up the conclusions: "20. The following aspects which emerge from the above analysis are as below:- (i) Section 3 (1) and 3 (2) of Act 1999 clearly establishes that it is a tax on goods specified in Column-2 of Schedule-I which are carried by road by means of mechanical vehicle or Cart except by Railways or Airways. (ii) The tax is either to be paid by the person incharge of goods or person in-charge of the mechanical vehicle or cart in or on which goods are being carried; (iii) The mode of transportation and distance up to which the goods are carried is only for the purposes of calculation of tax which is imposed on the goods specified in Column-2 of Schedule-I. (iv) In reference to Act 1999 the tax is paid by the petitioner who is the owner as well as incharge of the goods and even in the other case the incidence of tax is to be borne by the petitioner who is to reimburse the same to the transporter who at that time is the incharge of the mechanical vehicles. Thus, in both the cases the incidence of tax is on the petitioner. (v) The mode of collection cannot determine the nature of the tax and the liability. (vi) In the present case, for all intents and purpose, the liability to pay tax is of the petitioner who is the owner/incharge of the goods. (vii) Admittedly, the goods which are being manufactured by new Industrial Unit of the petitioner situated in the Tax Free Zone of backward Panchayat Mangal are the goods which cannot be subjected to state taxes for a period of ten years from the date of its commercial production and hence no tax under Act 1999 can be realised from the petitioner." 5. It is the contention of the State that the tax under the 1999 Act, is compensatory in nature and being one in the shape of a fee, the industrial unit is not entitled to exemption. It is further contended that the exemption is to the industrial unit qua its activity of commercial production. Yet another contention is that in any case, the taxable event is not production but the transport of goods by road and the liability is on the person in charge of the vehicle in which the goods are carried or the person in charge of the goods. Still further, it is contended that the goods carried being clinker is covered by the negative list under the Incentive Rules and hence the writ petitioner is not entitled to exemption. It is also the contention that there is no provision for exemption under the 1999 Act. 6. On the other hand, on behalf of the writ petitioners, it is contended that the Incentive Rules covers all State taxes in respect of units established in the tax free zone for the stipulated period. The liability is essentially on the manufacturer or owner and not the transporter. The 3rd contention is that the tax under 1999 Act is not a fee and hence the exemption being only for fee, the writ petitioner is not liable to pay the tax. There is also a contention that based only on the industrial policy of the State 2004 regarding the exemption of tax for a period of 10 years, the petitioner set up the unit and it will be unviable for the unit, but for the exemption even to function. There is also a contention that based only on the industrial policy of the State 2004 regarding the exemption of tax for a period of 10 years, the petitioner set up the unit and it will be unviable for the unit, but for the exemption even to function. Yet another contention is that the only ground taken for denial of exemption is that the liability is of the transporter and not of the owner and hence order passed by the Commissioner cannot be supported by supplementing other reasons. Still further, it is contended that the Incentive Rules having not expressly excluded 1999 Act, the presumption should go in favour of the writ petitioner. Lastly, it is contended that merely because there is no provision under the 1999 Act to exempt any unit the benefit of the tax exemption otherwise available to the writ petitioner cannot be taken away and the provisions of Section 15 of the Act has to be read and understood as enabling the exemption. 7. Before analysing the various contentions, it would be profitable to refer to some of the relevant provisions, for the purpose of easy reference. We may also note in this context that the taxation of goods carried by road was a levy originally imposed in Himachal Pradesh right from 1976. The first Act being Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1976, which was followed by Himachal Pradesh Taxation (on Certain Goods Carried by Road) Act, 1991. The two predecessor Acts contained provisions in pari materia. The 1999 Act is also to "provide for the levy of tax on certain goods carried by road in the State of Himachal Pradesh" and to validate the collection made in that regard. Section 3 provides for the levy and rate of tax. Section 4 provides for the mode of payment of tax and Section 4-A provides for mode of collection of tax. Section 15 provides for power to amend Schedule. The provisions read as follows: 3. Levy and rate of tax.- (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 [or cart] except railways and airways. The provisions read as follows: 3. Levy and rate of tax.- (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 [or cart] except railways and airways. [(2)] Such tax levied on the goods specified in Schedule-I, shall be payable for a distance of every two hundred and fifty kilometers 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 exceeds 250 Kilometres At the rates as specified in column (3) of Schedule I; and b) where the distance covered or being covered exceeds 250 kilometers. At twice the rates as 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 kilometers, 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 kilimetres. At the rates as specified in column (4) of Schedule-II; (b) Where the distance covered exceeds 150 kilimetres 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 (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. (4) Mode of payment of tax. 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 (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. (4) Mode of payment of tax. - The tax payable under this Act shall be paid by every person-in-charge of the mechanical vehicle [or cart] in or on which the goods are carried or the person-incharge of the goods, as the case may be, in the prescribed manner, into the Government treasury or State Bank of India or to the taxing authority of the district through which the goods are carried subject to the condition that such authority shall issue him a receipt in the prescribed form, in token of having received the amount specified therein. [4-A. collection of tax by a person selling or causing or authorising to cause dispatch of goods for carriage by road.- (1) Notwithstanding anything to the contrary contained in section 4, [a person] selling or causing or authorising to cause dispatch of goods for carriage by road [duly authorised by the State Government, by notification] shall, in the prescribed manner, collect the amount of tax payable under section 3 from the person incharge of the mechanical vehicle or cart in or on which the goods are to be carried or the person-in-charge of the goods, as the case may be, and the person making such collection shall, in the prescribed manner, make payment of the same into the Government Treasury. (2) The person making such collection shall issue a certificate, in the prescribed manner, to the person-in-charge of the mechanical vehicle or cart in or on which the goods are carried or the person-in-charge of the goods, as the case may be, and, on the production of the certificate, no tax shall be payable under section 4 of the Act. (3) If any person contravenes any or all of the provisions of subsections (1) and (2), the Taxing Authority shall, after giving an opportunity of being heard, by an order, in writing, direct that such person shall pay by way of penalty not exceeding twice the amount of tax payable under sub-section (1). (3) If any person contravenes any or all of the provisions of subsections (1) and (2), the Taxing Authority shall, after giving an opportunity of being heard, by an order, in writing, direct that such person shall pay by way of penalty not exceeding twice the amount of tax payable under sub-section (1). (4) The provisions of section 11 shall mutatis mutandis apply for recovery of any amount of tax payable and/or any penalty imposed but not deposited under this section]. 15. Power to amend Schedule-I.- (1) The State Government may, by notification add to or delete any goods specified in column (2) of Schedule-I and amend the rate of tax specified in column (3) thereof and thereupon the said Schedule-I shall stand amended accordingly. Provided that the rate of tax shall not be increased at any one time by more than 50% of the rate specified in Schedule-I. (2) Every notification issued under sub-section (1) shall, as soon as may be, after it is issued, be laid on the Table of the Legislative Assembly. 8. The "Rules Regarding Grant of Incentives, Concessions and Facilities to Industrial Units in Himachal Pradesh, 2004" has provided for the following objectives. "2*. Objectives: The objectives of the incentives, concessions and facilities being provided under these Rules are:- i) To achieve the aims and objectives announced by the Government in the Industrial Policy Guidelines from time to time. ii) To spell out the extent to which the State Government proposes to provide benefits, incentives, concessions and facilities to industrial enterprises to be set up in the State, on or after the appointed day. iii) To supplement and support the Special Package of Incentives and Concessions announced by the Government of India on 7th of January 2003 for industrial enterprises to be set up in Himachal Pradesh. iv) To encourage investment and optimum utilisation of the resources of the State namely power, land, capital, manpower and raw material in terms of revenue generation and generation of employment opportunities for local populace within the physical and environmental carrying capacities of the State. v) To facilitate the ease of doing business by simplifying the Rules and to promote transparency of procedures governing the establishment of Industrial Enterprises in the State. vi) To encourage the maximum gainful employment of bona fide Himachalis in the Industrial Enterprises set up in the State." 9. v) To facilitate the ease of doing business by simplifying the Rules and to promote transparency of procedures governing the establishment of Industrial Enterprises in the State. vi) To encourage the maximum gainful employment of bona fide Himachalis in the Industrial Enterprises set up in the State." 9. After providing for the benefits available to the entrepreneurs on allotment of land etc., Rule 8 provides for subsidy towards the cost of preparation of feasibility report. Rule 9 provides for power concessions, Rule 10 provides for Sales Tax Concessions and Rule 11 provides for additional incentives to special category of entrepreneurs. Rule 19 provides for tax incentives and Annexure III is the Negative List. In the Negative List is the cement, clinker and asbestos raw including fibre. It would be relevant to read Rule 10 dealing with sales tax concessions and Rule 19 providing for incentives. Rules 10 and 19 read as under: "10. Sales Tax Concessions: 10.1. The following Sales Tax Incentives would be provided subject to their fulfilling the eligibility conditions as laid down elsewhere under these Rules: 1) Sales Tax incentives, that is, exemption from payment of C.S.T/G.S.T. for 10 years from the date of their commencement of production in the Tax Free Zone (now classified as Category C areas under these Rules) shall be continued, as provided for under the 1999 Incentive Rules. This incentive will be admissible to New Industrial Units and or existing industrial units as on 7/01/2003 (for the purpose of this incentive only) which undertake substantial expansion after 7/01/2003. This incentive will be available to all eligible units listed in the negative List (annexure-III) also. In other words no Negative List will be applicable in Tax Free Zones for the purpose of this incentive. 2) Village Industry, as defined under these Rules, set up in the State, falling within the definition of Khadi and Village Industries Board and which are so notified by the State Government in consultation with the Department of Excise and Taxation will be exempted from the payment of Sales Tax, as was the position prior to 10/03/1999. This incentive however, will not be available to such units manufacturing products, which are listed in Annexure III (Negative List) of these Rules. This incentive however, will not be available to such units manufacturing products, which are listed in Annexure III (Negative List) of these Rules. 3) i) Except for industries listed in the Negative List (Annexure-III of these Rules), New Industrial units set up after the appointed day as specified under these Rules shall be entitled to the incentive of deferment of 100% General Sales Tax for a period of 8 years in Category B areas and for a period of 5 years for such units in category A areas. ii) Existing industrial units, except for industries listed in the Negative List (annexure-III of these Rules), which have been set up (i.e. commenced commercial production) before 7/01/2003 and which after the approval of Director of Industries or any other officer so authorised by him, undertake substantial expansion only after 7/01/2003, as defined under these Rules, shall be entitled to the incentive of deferment of 75% General Sales Tax for a period of 8 years in category B areas and for a period of 5 years for such units in category A areas, iii) The benefit as at para (i) and (ii) above will however be subject to furnishing of security/bank guarantee to the satisfaction of the Excise & Taxation Department of Government of Himachal Pradesh. The General sales Tax so deferred for 8 years or 5 years as the case may be shall become due for payment after a period of 5 years from its collection. This means that the tax collected in the Ist year shall be payable in the 6th year, second year in the 7th year and so on. 25% of the G.S.T. liability as and when due in case of existing units undertaking substantial expansion (as at para (ii) above) will however continue to be deposited with the State Government as prescribed by relevant law/statute. 10.2. The G.S.T. on the raw material, processing and packaging material except timber, shale and limestone used by the existing and new industrial units (as defined under these Rules) unless provided otherwise elsewhere under these Rules, for captive manufacturing within the State shall be leviable at a concessional rate of 1% upto 31-03-2013. 10.3. Central Sales Tax at a concessional rate of 1% shall be leviable on the goods manufactured by new and existing industrial units (as defined under these Rules) unless provided otherwise elsewhere under these Rules, upto 31-03-2013. 10.3. Central Sales Tax at a concessional rate of 1% shall be leviable on the goods manufactured by new and existing industrial units (as defined under these Rules) unless provided otherwise elsewhere under these Rules, upto 31-03-2013. This incentive will not be provided to industrial unit engaged in the production of breweries, distilleries, non-fruit based wineries and bottling plants (both for country liquor and Indian made foreign Liquor). 10.4. The concessions provided under this rule will commence from the date of commencement of commercial production or from the date of notification issued by the Department of Excise and Taxation (wherever required), whichever is later. 19. Tax Incentives Available To Units In Category "c" Blocks (Tax Free Zone). All new industrial unit(s) set up in the Category "C" areas of the State, as notified from time to time, shall be exempted from payment of any State taxes and duties (excluding levies in the shape of cess, fees, royalties etc.) for a period of 10 years from the date of commencement of commercial production or the date of notification by the concerned Department(s), whichever is later." 10. At the outset, it has to be seen that the Incentive Rules were introduced, as can be seen from the objectives to spell out to the extent to which the government proposed to provide the benefits, incentives, concessions and facilities to industrial enterprises. The Rules have been framed pursuant to the Government of Himachal Pradesh Department of Industries Industrial Policy- 2004. The objectives and aims of the policy are spelt out at paragraph 2, which reads as follows: "2. Objectives And Aims Of The Policy: 2.1 This policy intends to: Serve as a guideline for achieving the objective of uniform growth of industry and service sector throughout the State. Disperse industries and service sector activities. Cull together ingredients of a Industrial Policy so as to facilitate generation of employment opportunities for local resource owners and stakeholders. Clearly state Governments commitment and approach to the development of key infrastructural sectors like Power, Housing, Social Infrastructure Development, Human resource Development and Vocational Education so as to create a congenial investment climate for existing industry to grow as well as to attract further investments in the State. Clearly spell out Industrial Incentives of fiscal nature. Clearly state Governments commitment and approach to the development of key infrastructural sectors like Power, Housing, Social Infrastructure Development, Human resource Development and Vocational Education so as to create a congenial investment climate for existing industry to grow as well as to attract further investments in the State. Clearly spell out Industrial Incentives of fiscal nature. Specifically address the issues impeding industrial growth such as procedures for setting up of industry, obtaining permissions required under various Labour Laws, addressing issues related to Transportation of industrial produce so as to lay the foundation of strong and consistent growth of the industrial sector." 11. The package of incentives, concessions and facilities are given in detail at paragraph 8 of the Policy, which reads as follows: "8. PACKAGE OF INCENTIVES, CONCESSIONS AND FACILITIES FOR INDUSTRIES UNDER THE 2004 POLICY. 8.1 With a view to encourage investment in our State and to offset the locational disadvantages the State Government has been implementing various Incentive Schemes in tandem with the changing needs and aspirations of Industry. Over a period of time it has been realised that fiscal incentives have invariably led to the creation of inefficient and uncompetitive industry, which has not been able to sustain itself in the long run. In addition, with changes and modifications being introduced in the taxation policy and reforms initiatives like introduction of VAT, incentives to industry need to be looked at afresh. Thus it is imperative that we move towards a policy of gradual phasing out of subsidies. Such initiatives coupled with an increased stress on the provision of quality infrastructure shall help create a conducive environment for industrial growth and attract both foreign and domestic investments. 8.2 The Centre has recently announced a special package of incentives for Himachal Pradesh and Uttaranchal, broadly along the lines of Jammu and Kashmir. It provides for concessions aimed at attracting new investments to these States. It will be a conscious policy of our Government to supplement this package with certain concessions and facilities from the State Government so as to ensure sustainable industrial development in the long run. 8.3 A new set of Rules to govern incentives, concessions and facilities will be announced as a part of this Policy which will remain operative till the next Rules governing the incentives, concessions and facilities are announced or these rules amended. 8.3 A new set of Rules to govern incentives, concessions and facilities will be announced as a part of this Policy which will remain operative till the next Rules governing the incentives, concessions and facilities are announced or these rules amended. It is a conscious attempt of the State Government to phase out all tax-based and other fiscal incentives (deferrals/exemptions etc.) over a period of time keeping in tune with the changing economic scenario of the country and ground realities. While doing so, efforts will, however, be made to enable existing units to avail of the incentives they are already availing for the periods they are entitled to. 8.4 In order to assure local industry with adequate back-up of Government in international markets and to encourage setting up of innovative industry based on local skills, local raw materials and employing local people, the State Government would give fiscal incentives to Companies set up and having their registered offices in Himachal Pradesh for patenting their inventions and its commercialization, especially for activities such as drafting the patent application, filing the patent application in India, filing the patent application in Patent Tribunals, prosecution of the patent application outside India, maintenance fee of the granted patent application, and obtaining non-infringement opinion. Fiscal incentive by the State Government would also be provided to such companies so as to meet with the fees charged by established private lawyers/law firms located within the country having a reference from any Ministry/Deptt. of Government of India of having successfully assisted such Companies in the country." 12. Thus, it is clear from the Policy itself that the Government really intended to clearly spell out the incentives of fiscal nature with a view to moving towards a Policy of gradual facing out of subsidies. The Incentive Rules have to be analysed and understood in terms of the Industrial Policy, as extracted above. It has also to be borne in mind that all the incentives, which the Government really wanted to extend to the industrial units have been clearly spelt out in the Incentive Rules, 2004. 13. Rule 19 provides for exemption to industrial units set up in "C" category areas from payment of any State taxes and duties. But, certain categories are excluded. Those excluded categories are in the shape of cess, fees, royalty etc. 13. Rule 19 provides for exemption to industrial units set up in "C" category areas from payment of any State taxes and duties. But, certain categories are excluded. Those excluded categories are in the shape of cess, fees, royalty etc. In other words, levies in the shape of cess, fees and royalty are excluded from the exemption. Therefore, whether the tax on goods carried by road would be a tax or levy in the shape of fee is the issue to be decided. There cannot be any dispute that tax and compensatory tax are entirely two different concepts and the compensatory tax is only on services, on the principle of equivalence. As held in Yashpal Gargs case, the tax on goods carried by road is a compensatory tax. Still further, as held by the apex Court in Jindals case (supra), the compensatory tax is a sub-class of a fee, though not fee as such. As rightly contended by learned senior counsel Sh. S. Ganesh appearing for the writ petitioner, in case of tax on goods carried by road is actually a fee, it could have been specified so. But, at the same time, it has to be seen that the legislature (though it is a piece of subordinate legislation) has used an unusual expression to denote the excluded category from exemption i.e. levies in the shape of cess, fee, royalty etc. The common thread among all the three categories specifically mentioned, namely, cess, fee and royalty is that there is a corresponding benefit enjoyed by the one who pays it. Thus, going by the principle of ejusdem generis, particularly since etc. has been used denoting that the list is not exhaustive, all levies which are in the shape of cess, fee, royalty etc. are where the one who pays such levy stands to derive some specific advantage. Thus, in the instant case also the industrial unit enjoys the service of the road provided by the State and the compensatory tax is the recompense. It is for the use of the road or to be more specific it is on account of benefit derived by the use of the road for carrying the goods, that the transporter is made liable to pay some compensatory tax, which is in the shape of fee for use of road. 14. It is for the use of the road or to be more specific it is on account of benefit derived by the use of the road for carrying the goods, that the transporter is made liable to pay some compensatory tax, which is in the shape of fee for use of road. 14. It needs no elaborate discussion to hold and it is gracefully conceded also by learned senior counsel Sh. S. Ganesh that the tax on the goods carried by road is not a tax on goods. The taxable event is the transport of goods by road. 15. The issue also has to be seen from another angle. The liability to pay the tax under the 1999 Act is on the person in charge of the mechanical vehicle or cart in which the goods are carried or the person in charge of the goods, the person in charge of the goods at the time of transport since it is not a tax on goods and the taxable event being the transport of the goods. The incentive under Rule 19 of the Incentive Rules, 2004, is to the industrial unit from the payment of the specified tax and duties. Admittedly, in the instant case, the transport of goods is done by a contractor and not by the industrial unit. Though, Sh. S. Ganesh, learned senior counsel made a persuasive attempt to establish that even after the goods are entrusted to the transport contractor for carriage by road the owner is still in charge of the goods, we find it difficult to appreciate the contention. 16. The reliance sought to be placed on the Constitution Bench decision in Khyerbari Tea Co. Ltd., and another v. State of Assam and others, reported in AIR 1964 SC 925 , is of no use or relevance. It is a case where Section 3 of the Assam Taxation (On Goods Carried by Road or on Inland Waterways) Act, 1961 provided for a liability of levy of tax on manufacturing tea and jute in bales carried by motor vehicle, cart etc. Sub section (2) of Section 3 imposes a levy on the producer on the manufactured tea and jute from the dealer. Sub section (2) of Section 3 imposes a levy on the producer on the manufactured tea and jute from the dealer. We may extract the provision as such, which reads as follows: "3 (1) Subject to the provisions of this Act, there shall be levied a tax on (a) manufactured tea and (b) jute in bales carried by motor vehicle, cart, trolley, boat, animal and human agency or any other means except railways and airways in such manner and in respect of such period and at such rate as specified in the Schedule. (2) Such tax levied on manufactured tea shall be realised from the producer and that levied on jute shall be realised from the dealer; Provided that where tea is sold at the factory premises, the producer shall be liable for realisation of tax from the purchaser with effect from such date as the Government may, by notification, appoint, for the carriage of such tea as provided in this section and the producer shall be liable for the payment of such tax notwithstanding the fact that the tea is not carried by the producer;" 17. Analysing the provision, it was held at paragraph 20 & 21, which read as follows: "20. Reverting then to Section 3 (1), we ought to add that the said section in terms expressly makes the carriage of goods the taxable event and Section 3 (2) makes the producer liable to pay the tax only on goods carried. If the goods produced in the tea garden are not carried, there is no occasion to pay the tax. That being so, the fact that the Legislature has adopted the machinery of making the producer responsible for the payment of the tax and liable for it in that sense cannot introduce any element of legislative incompetence which would vitiate the statute. 21. It may be conceded that when the legislature constructs a machinery for the recovery of the taxes which it is within its competence to impose, the said machinery should have some rational or intelligent connection with the tax. In the absence of a rational nexus between the producer and the tax on goods carried, it may be open to a citizen to contend that the tax is not one justified by Entry 56. In the absence of a rational nexus between the producer and the tax on goods carried, it may be open to a citizen to contend that the tax is not one justified by Entry 56. But can we say that between the producer of tea and the tax which is levied on the tea carried from his garden, there is no rational nexus. Considerations of administrative convenience as well as considerations or facility in recovering the tax cannot be treated as irrelevant in this context. The tea which is taxed has been produced by the producer and even when he sells it to a purchaser, it is obvious that it would be carried away and not left with the producer, and so, the legislature may have thought that it would be appropriate to make the producer liable to pay the tax." 18. In the instant case also, in case the clinker manufactured in the industrial unit had been further used for the production of the cement at the premises itself, there would not have been any liability since there is no transport of clinker from one place to another or to outside State. The liability to pay the tax arose on the transporter only on account of transport of the clinker from one place to another or to outside State. Similarly, the Constitution Bench decision in R.C. Jall Parsi and another v. Union of India and another, reported in AIR 1962 SC 1281 , is also of no assistance to the writ petitioner. It was a case of levy of excise duty on the manufacture or production of coal. It was held that neither the stage of collection of duty nor the method of collection, affect the essence of the duty, but, it only relates to the machinery of collection for administrative convenience. To quote paragraph 8: "8. In this case, a perusal of the provisions of the Ordinance clearly demonstrates that the duty imposed in the essence an excise duty and there is a rational connection between the said tax and the person on whom it is imposed. Section 2 of the Ordinance 39 of 1944 clearly shows that the tax is an excise duty on the manufacture or production of coal or coke. Section 2 of the Ordinance 39 of 1944 clearly shows that the tax is an excise duty on the manufacture or production of coal or coke. Section 5 (2) thereof confers in express terms a power on the Central Government to make rules, inter alia, to provide for the manner in which the duties imposed by the Ordinance shall be collected and the persons who shall be liable to pay the duty. Rule 3 of the Rules made by the Central Government provides for the recovery of excise duty on the coal produced; under the said rule it would be collected by the Railway Administration by means of a surcharge on freight and such duty of excise shall be recovered from the consignor, if the freight charges are being prepaid, at the time of consignment or from the consignee, if the freight charges are collected at the destination of the consignment. The machinery provided for the collection of the tax is, in our view, a reasonable one. Having regard to the nature of the tax, that is, the tax being an indirect one to be borne ultimately by the consumer, it cannot be said that there is no rational connection between the tax and the consignee. When the consignor pays, it cannot be denied that it is the most convenient stage for the collection of the tax, for it is the first time the coal leaves the possession of the consignor. The fact that the consignee is made to pay in the contingency contemplated by R. 3(b) of the Rules cannot affect the essence of the tax, for the consignor, if he had paid the freight, would have passed it on to the consignee and instead the consignee himself pays it. The Central Government was legally competent to evolve a suitable machinery for collection without disturbing the essence of the tax or ignoring the rational connection between the tax and the person on whom it is imposed. We hold that the machinery evolved under the Rules for collection of the duty satisfies the said conditions and therefore the exigibility of the tax at the destination point in the hands of the consignee cannot legitimately be questioned." 19. At the risk of redundancy, we may state that in the instant case, the tax is not on the goods manufactured but a compensatory tax on the goods transported by road. Sh. At the risk of redundancy, we may state that in the instant case, the tax is not on the goods manufactured but a compensatory tax on the goods transported by road. Sh. S. Ganesh, learned senior counsel attempted to canvass also on the principle of promissory estoppel, placing reliance on the apex Court decision in State of Punjab v. Nestle India Ltd., reported in (2004) 6 SCC 465 . One subtle difference in NESTLEs case is that the statute contained not only power to amend the Schedule but it also contained the provision to exempt any class from the payment of tax. Paragraphs 19 and 20 of the decision would be relevant, which read as follows: "19. Apart from the power to treat goods otherwise leviable to tax under the Act as tax-free under Section 6 (2), the State Government has the power under Section 31 to amend Schedule C itself and thereby remove goods from imposition of tax altogether. It provides: "31. The State Government after giving by notification not less than twenty days notice of its intention so to do, may by notification, add to, or delete from Schedule C any goods, and thereupon Schedule C shall be deemed to be amended accordingly." 20. In addition, the State Government has the power to exempt the payment of tax under Section 30 which reads: "30. Power to exempt.- (1) The State Government, if satisfied, that it is necessary or expedient so to do in the interest of cottage industries, may by notification exempt any class of cooperative societies, or persons from the payment of tax under this Act on the purchase or sale of any goods subject to such conditions as may be specified in such notification.".. 20. It was in that context, at paragraph 46, it has been directed as follows: "46. In any event judicial discipline requires us to follow the decision of the larger Bench. The facts in the present case are similar to those prevailing in Godfrey Philips. There too, as we have noted earlier, the statutory provisions required exemption to be granted by notification. Nevertheless, the Court having found that the essential prerequisites for the operation of promissory estoppel had been established, directed the issuance of the exemption notification." 21. The facts in the present case are similar to those prevailing in Godfrey Philips. There too, as we have noted earlier, the statutory provisions required exemption to be granted by notification. Nevertheless, the Court having found that the essential prerequisites for the operation of promissory estoppel had been established, directed the issuance of the exemption notification." 21. In the instant case, not only that we find it difficult to find promise and assuming so also, there is no provision under the 1999 Act to give any exemption. Power under the Act under Section 15 in only with regard to addition or deletion of goods in the Schedule and for amending the rate of tax specified in the Schedule. It has also to be noted in this context that even under the Incentive Rules, the exemption is only for 10 years and it is not a case of permanent exclusion from the Schedule or exemption forever. 22. The person in charge of the goods at the time of carriage is the transporter or the person to whom the goods are entrusted for carriage. The industrial unit is not the person to whom the goods are entrusted for carriage. The goods are also not transported in the vehicles of the industrial unit. Thus, as rightly contended by the learned senior counsel Sh. Jayant Bhushan, appearing for the State, the liability to pay the tax on the carriage of the goods is only on the person in charge of the vehicle in which the goods are carried the person in charge of the goods at the time of the transport. 23. Though, Sh. S. Ganesh, learned senior counsel attempted to canvass the position that person in charge of the vehicle would include the owner of the goods, placeing reliance on the decision in Assistant Commercial Taxes Officer v. Bajaj Electricals Limited, reported in (2009) 1 SCC 308 , the said decision is of no contextual relevance and of no assistance in the instant case. It was a case where the Supreme Court examined Section 78 (5) of the Rajasthan Sales Tax Act, 1994 read with Rule 53 of the Rules made thereunder. To quote paragraph 28: "28. It was a case where the Supreme Court examined Section 78 (5) of the Rajasthan Sales Tax Act, 1994 read with Rule 53 of the Rules made thereunder. To quote paragraph 28: "28. If one reads sub-section (5) of Section 78 in its entirety with Rule 53 of the 1995 Rules, it is clear that penalty was liable to be imposed for importation of any taxable goods for sale without furnishing a declaration in Form ST 18-A completely filled in all respects. The duty to fill and furnish the said form is imposed on the purchasing dealer. Therefore, Section 78 (5) as it stood prior to 22-3-2002 imposed penalty if possession or movement of goods took place inter alia in breach of Section 78 (2)(a) on "the person in charge", which included the owner. In this connection it may be noted that sub-section (5) comes after sub-section (4) (c) which talks about release of the goods to "the owner of the goods" on his giving of adequate security. It is the owner (importer) who has to fill in Form ST 18-A. It is the owner who is entitled to hearing under Section 78 (5) and, therefore, the expression "person in charge of the goods" under Section 78 (5) would include the owner. Moreover, under Section 78 (2) the words used are " peron in charge of a vehicle or carrier of goods in movement" whereas the words in Section 78 (5) which comes after sub-section (4) refer to "person in charge of the goods". The words " in movement" do not find place in Section 78 (5) was wider than the expression "person in charge of goods in movement" under Section 78 (2)(a). Consequently, the expression "person in charge of the goods" under Section 78 (5) who is given an opportunity of being heard in the enquiry would include the "owner of the goods". 24. In this case also, there is no quarrel with the proposition that the person in charge of the goods at the time of the transport may include the owner as well. But the levy is not on the goods and the incidence of taxation is transport of goods by road. 25. Section 4-A of the 1999 Act, casts only liability to collect the tax on the petitioners since it is the industrial unit which causes or authorizes the dispatch of goods for carriage by road. But the levy is not on the goods and the incidence of taxation is transport of goods by road. 25. Section 4-A of the 1999 Act, casts only liability to collect the tax on the petitioners since it is the industrial unit which causes or authorizes the dispatch of goods for carriage by road. It is also significant in this context to note that only while prescribing the mode of recovery, the legislature has used the expression owner in the Taxation Act. The provision reads as follows: "9. Recovery of tax in case of refusal to pay or evasion.- (1) If the taxing authority having jurisdiction in the district or Inspector-in-charge of the check-post or barrier, as the case may be, is satisfied that any person carrying the goods specified in the Schedules has evaded payment of tax due under this Act, or such person has not made the payment of tax on demand, he may, for reasons to be recorded in writing and after hearing the said person, order detention of the goods and also the mechanical vehicle [or cart] carrying such gods for such period as may reasonably be necessary and shall allow the same to proceed, only on the owner of goods, or his representative or the driver or other person-incharge of the goods, mechanical vehicle [or art] on behalf of the owner of the goods, making payment of the tax or furnishing to his satisfaction a security or executing a bond with or without sureties for securing the amount of tax, in the prescribed from." 26. Therefore, the legislature has used the expression owner wherever it intended to do so. Under Rule 9, an opportunity is given to the owner also to get the goods released in the event of the transporter or the person in charge of the vehicle failing to pay the tax. 27. There is yet another angle also, as pointed out by Sh. Jayant Bhushan, learned senior counsel, for analysing the issue. In the 1999 Act, there is no provision for exemption. The only power under the Act is to amend the Schedule I for adding or deleting any goods specified in Schedule-II or for amending the rate of tax specified in column No. 3. It is the contention of Sh. Jayant Bhushan, learned senior counsel, for analysing the issue. In the 1999 Act, there is no provision for exemption. The only power under the Act is to amend the Schedule I for adding or deleting any goods specified in Schedule-II or for amending the rate of tax specified in column No. 3. It is the contention of Sh. S. Ganesh, learned senior counsel appearing for the writ petitioner that the enabling provision to amend the rate of tax would include the power to reduce the tax to zero. That contention can be appreciated only on the admitted position of the industrial unit being indisputably covered by the 1999 Act. That is not the contention here. The main contention is that the Act does not apply at all. If the grievance is on rates, it is a different issue altogether and to be approached altogether differently. In this context, it is also relevant to note that the exemption permissible, even assuming it is available, is only for ten years and there is no such enabling provision under the Act. 28. We may also advert to the contention of the learned senior counsel Sh. Jayant Bhushan regarding the Negative List. The Incentive Rules, has specifically given Annexure III, Negative List, which includes cement clinker. Though, nothing as such specifically is stated in the Rules regarding the Negative List, the contention is that inferentially it has to be taken that the Negative List would be inapplicable only to sales tax and for all other incentives, the same has to apply. Though, we find some force in the submission, the legislature having not specifically provided the purposes for which the negative list is to be applied, it will be difficult for the Court to read down the Rule and hold otherwise. 29. Yet another contention advanced by Sh. S.Ganesh, learned senior counsel appearing for the writ petitioner is that the impugned orders are to be supported only by the reasons stated therein. Reliance is placed on the decision of the Supreme Court in Mohinder Singh Gill and another v. The Chief Election Commissioner & others, reported in AIR 1978 SC 851 . There is no quarrel with the settled proposition but the question here is whether there is any impugned order like that. No doubt, there is a clarification to the effect that the liability is on the person in charge of the vehicle. There is no quarrel with the settled proposition but the question here is whether there is any impugned order like that. No doubt, there is a clarification to the effect that the liability is on the person in charge of the vehicle. But even if that order is set aside also, the matter requires reconsideration. Even otherwise being questions of law especially in analysing the issues pertaining to exemption from tax and the provisions on taxing statutes, as rightly pointed out by Sh. Jayant Bhushan, learned senior counsel, at any stage the same can be raised. In this context, it will be profitable to refer to three prayers in the writ petition:- "(i) To issue a writ, order or direction in the nature of mandamus and prohibition restraining and prohibiting the respondents No. 1,2 and 5 from demanding and realising tax from the petitioner under the Himachal Pradesh Taxation (On Certain Goods Carried by Road), Act, 1999 in respect of the goods manufactured by it namely clinker and cement in its said new manufacturing unit; (ii) To issue a writ, order or direction in the nature of mandamus directing the respondent No. 2 to refund the amount of got deposited from the petitioner against the tax under Himachal Pradesh Taxation (On Certain Goods Carried by Road) Act, 1999 along with interest @ 24% p.a. (iii) To issue writ, order or direction in the nature of mandamus directing the respondents No. 1 and 2 to fulfil the commitment in its entirety as contained in Rule 19.1 of "Rules regarding grant of incentives and facilities to Industrial Units in Himachal Pradesh, 2004." 30. Though the learned senior counsel appearing for the appellants/State has also referred to some of the factual errors in the judgment, we do not think it necessary to go into those aspects though we also were unable to trace some of the extracted portions in judgment from the pleadings, since the judgment cannot be sustained for other valid reasons stated above. The Himachal Pradesh tax on goods carried by road is not a tax on goods. It is a compensatory tax in the shape of a fee for carrying the goods by road. The liability is on the person in charge of the vehicle carrying the goods or the person in charge of the goods at the time of transport. The Himachal Pradesh tax on goods carried by road is not a tax on goods. It is a compensatory tax in the shape of a fee for carrying the goods by road. The liability is on the person in charge of the vehicle carrying the goods or the person in charge of the goods at the time of transport. There is no provision under the taxing Act for exemption. Therefore, the reliance placed on Rule 19 of the Incentive Rules for exemption for 10 years, even assuming it is available, is of no avail to the writ petitioner. The incentive Rules have clearly spelt out the available incentives. Concession on the Himachal Pradesh taxation on goods carried by road is not included. The said Rules have excluded not only the fees but all levies in the shape of fee from the purview of incentives. Therefore, the writ petitioner is not entitled for exemption for 10 years from payment of the compensatory tax for carriage of their clinker/cement from one place to another by using the roads in Himachal Pradesh. For all the above reasons, the appeal is allowed, judgment under appeal is set aside and the writ petition is dismissed. 31. We find that on 15th March, 2012, this Court had passed the following the interim order to the following effect: " As far as the future payments are concerned, from the date of the judgment the respondents-writ petitioners shall pay ?rd tax, in cash, and furnish bank guarantee for ?rd. It is made clear that the tax already paid and being paid by the writ petitioners will be continued to be treated as deposit. It is further made clear that in case the appeal is allowed and the writ petition is dismissed, the writ petitioners shall also be liable to pay interest at the same rate it would have otherwise been granted for the deposit, for the amounts covered by the bank guarantee." 32. The said order shall govern the payments during the interim period from the date of the said order to this date.