Court: Supreme Court of India
Bench: Justice B.V. Nagarathna and Justice Ujjal Bhuyan
Case: T.S.R. Venkatramana v. Union of India & Ors.
Year: 2026
Subject: Constitutional Law | Toll Tax | Union List vs State List
Background:
The Supreme Court dismissed a special leave petition that challenged the Union Government’s authority to collect toll tax on national highways.
Key Legal Issue:
Whether the power to levy toll on national highways belongs to the Union or the States under the Seventh Schedule of the Constitution.
Held:
The Supreme Court ruled that toll collected on national highways by the National Highways Authority of India (NHAI) falls squarely within the Union List under Entry 23 read with Entry 96 of List I of the Seventh Schedule.
The Court clarified that Entry 59 of List II (State List), which deals with tolls, applies only to roads and highways that are not national highways. Once a road is declared a national highway, legislative competence shifts entirely to the Union.
High Court Ruling:
The Madras High Court had earlier dismissed the petitioner’s challenge to Rule 8 of the National Highways Fee (Determination of Rate and Collection) Rules, 2008. The High Court upheld Parliament’s power to frame rules for toll collection including through concessionaires and found no constitutional infirmity in the toll collection framework.
Petitioner’s Argument:
The petitioner argued that the power to levy toll vests exclusively with States under Entry 59 of List II and that NHAI’s toll collection was unconstitutional due to lack of legislative competence and excessive delegation.
Key Legal Points:
- Toll on national highways is a fee for a Union subject traceable to Entry 23 read with Entry 96 of List I.
- States can levy toll only on state roads, bridges and ferries — not on national highways.
- National Highways Act 1956, Sections 7, 8A and 9 empower the Central Government to frame rules and authorize fee collection.
- Rule 8 of the 2008 Rules regulating location of toll plazas was upheld as constitutionally valid.
Result: Special Leave Petition dismissed.
