Toll On National Highways Covered By Union List; States Can Levy Toll Only On Other Roads : Supreme Court

The Supreme Court recently dismissed a special leave petition challenging Union's power to levy toll tax on national highways, observing that such charges fall within the Union List under the Constitution.

A bench of Justice B.V. Nagarathna and Justice Ujjal Bhuyan held that toll collected for use of national highways by the National Highways Authority of India is a fee traceable to Entry 23 (highways declared by or under law made by Parliament to be national highways) read with Entry 96 (fees in respect of any of the matters in the Union List) of List I.

“Having regard to the pith and substance of Entry 23 read with Entry 96 of List I of the Seventh Schedule of the Constitution of India, we find that any toll which is essentially a charge or fee collected for the use of a National Highways by the National Highway Authority of India is squarely covered within the Union List”, the Court held.

The Court said the expression “tolls” under Entry 59 of List II(State List) must be confined to charges not collected by the Union under List I. In other words, States can levy toll only on highways/roads which are not national highways.

The Court dismissed a plea against a judgment of the Madras High Court which had rejected the petitioner's challenge to the constitutional validity of the toll collection framework on national highways.

Before the High Court, the petitioner had sought a declaration that Rule 8 of the National Highways Fee (Determination of Rate and Collection) Rules, 2008 is unconstitutional on the ground of lack of legislative competence and excessive delegation.

He argued that the power to levy toll vests exclusively with the States under Entry 59 of List II and that collection of toll by the National Highways Authority of India or its concessionaires is unconstitutional.

On August 07, 2025, the High Court dismissed the writ petition. It held that once a road is declared a national highway, legislative competence shifts to the Union under Entry 23 of List I, and Parliament is empowered to levy fees under Entry 96.

The High Court held that toll on national highways is a fee for a Union subject, while Entry 59 of List II applies to tolls on State roads, bridges and ferries.

The High Court also examined the National Highways Act, 1956, including Sections 7, 8A and 9, and upheld the Central Government's power to frame the 2008 Rules and authorize fee collection, including through concessionaires. It found no infirmity in Rule 8, which regulates the location of toll plazas.

The Supreme Court affirming this reasoning and dismissed the SLP.

Case no. – Special Leave Petition (Civil) Diary No. 72032/2025

Case Title – T S R Venkatramana v. Union of India & Ors.

Citation : 2026 LiveLaw (SC) 326