TMI Blog2000 (2) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... nd collection of such tolls shall be liable to be same responsibilities as would belong to them if employed in the collection of the land-revenue. 2. The bridge, in question, is the Gai Ghat bridge which was constructed by the State Government on the river Sarju, District Bahraich in 1968-69 at a total cost of ₹ 39.97.000/-. In 1970, the bridge was opened to the public. On 7th February 1985, the State Government leased out the right to collect toll tax in respect of the bridge to one Chhotai Yadav. 3. In 1988, a writ application was filed by a truck owner, Devi Dayal Singh, challenging the right of the State Government to recover by way of toll under Section 2 of the Toll Act, 1851 any amount apart from the actual cost of construction of the bridge, viz. ₹ 39,97,000/-. 4. On 21st February 1990, the Division Bench of the Allahabad High Court allowed the writ application. The High Court held that the State Government was not entitled to realise interest on the amount spent by the State Government in the construction of the bridge by way of toll tax unless that amount had been borrowed from any financial institution. The High Court found that the bridge had been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of any road or bridge at the expense of the State Government. For the advantage obtained by the public by the construction of the road and bridges, the State Government is entitled to reimburse itself for providing the service. 9. Although the Section has empowered the State Government to levy rates of tolls as it thinks fit, having regard to the compensatory nature of the levy, the rate of toll must bear a reasonable relationship to the providing of the benefit. No doubt, by virtue of Section 8 of the Act, the tolls collected are part of the public revenue and may be absorbed in the general revenue of the State, nevertheless by definition a toll cannot be used for otherwise augmenting the State's revenue. 10. The State of Uttar Pradesh issued Notification No. 2174/XXIII-S.N.-II-62/1976 dated 2nd June 1976 in exercise of the powers conferred under Section 2 read with Section 21 of the General Clauses Act, 1897. By the notification, it was ordered that with effect from the date of the publication of the notification in the Gazette, toll shall be levied and chargeable from all persons in charge of vehicles, using all such permanent bridges management of the State Public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has included the stationery expenditure, maintenance and the interest charged on all the items. In other words, the State Government has charged interest on interest. 14. Clearly, in terms of the notification, the State Government could not levy toll and reimburse itself on account of stationery, nor could it charge Interest on maintenance and stationery costs. While there is also no pro vision in the notification for charging interest on interest, the State Government could in terms of the notification, certainly recover by way of toll from the public, the actual expense of construction, interest on such actual expense and the cost of maintenance. However, by the Judgments under appeal, the right to levy the last two items was negatived. 15. The reasons which led to such denial were based on the Bench decision in Jiya Lal: AIR1981All72 (supra); Jiya Lal's case Lal down the principles for charging toll tax in the State. The subsequent decision referred to by the High Court, namely, Lal Bahadur Ram AIR1988All146 merely followed the principles enunciated in Jiya Lal. The decision in Jiya Lal for the most part proceeded on certain premises which were neither supported by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks the power conferred on the State Government generally to levy toll as a means of revenue collection under Article 246 Entry 59 of List II, Schedule VII of the Constitution. The notification in terms allows toll to be levied so as to recover the cost of construction including interest on the total expenditure of the bridge. No distinction has been drawn between expenditure incurred out of the State Government's own revenue and expenditure incurred by borrowing money from financial institutions and others. Paragraph III (b), although unhappily drafted, also allows the Government to recover interest on all amounts invested in the construction of the bridge. It, however, clarifies that if the investment is made with borrowed money and the borrowed money is repayable in installments, then interest shall be charged only on the balance of the borrowed sum after repayment of the installment, of the loan. 20. The third principle enunciated in Jiya Lal's case AIR1981All72 is found in para: graph 12 of the judgment: The collection of tolls has necessarily to be entrusted to a separate staff and the cost incurred in employing such staff is a legitimate charge which should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a bridge it is also maintained. Finally, and in any event, the cost of maintenance is expressly recoverable under the 1976 Notification, which, as already noted, was not the subject matter of challenge at any stage of these proceedings. 24. We have been informed by learned Counsel appearing on behalf of the appellants that during the pendency of these appeals the State Government has stopped collecting any toll tax in respect of the Gai Ghat bridge. Even if that be so, it is necessary to resolve the issues raised, albeit to operate prospectively, as it would not do to allow the principles enunciated in Jiya Lal AIR1981All72 to continue to hold the field. 25. In the circumstances, we dispose of the appeals by setting aside the impugned orders of the High Court but at the same time declaring that the State Government may not hereafter take into account for the purpose of levying any toll under the notification in respect of a road or bridge constructed by it, stationery cost (unless incurred in realisation of the toll), interest on stationery cost and maintenance, and interest on the interest payable on account of the actual expenditure incurred in the construction of the road ..... 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