The government generated a revenue of 41,342 crore in 2022-23 from tolls. Simply put, a toll is the amount paid for using a road or a bridge. Roadways are a vital mode of transportation. The government introduced the Tolls Act of 1851 (further referred to as the ‘Tolls Act’). The Indian Tolls Act aspires to regulate transportation by imposing a toll for using a public road or bridge.
The tolls Act specifies the legality for levying tolls acting as taxes on road users.
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The Indian Tolls Act, 1851
The Tolls Act of 1851 is an old legislation with territorial jurisdiction since the administration of colonial rulers in Bengal in 1851. The Act does not classify roads into national and state highways. It addresses the roads and bridges to be funded by the central or state governments for construction or repair.
FASTag and other Rules implemented under the NHAI Act are exclusive to highways. However, the Tolls Act is also applicable to other roads not classified as highways.
Powers of the State Government
As per Section 2 of the Tolls Act, the state government can impose a toll on a road or bridge funded by the central or state government.
Section 2 entails the power of the state government to appoint appropriate individuals to manage toll collection.
Powers of Appointed Officials to Recover Toll
The Indian Tolls Act confers certain powers on officials appointed by the government. The statutory powers conferred by the Act include the following:
- On failing to pay the toll on demand, the authorised officers can seize their mode of transport (carriage or animal) or a part of their load to cover the toll tax.
- On failing to pay the toll within 24 hours, the superintendent responsible for overseeing the toll collection will investigate the matter.
- The superintendent determines the toll amount and other related costs by auctioning and selling the property seized. The owner can get the leftover amount after collection of the toll upon request.
- The superintendent must issue a notice mentioning the time and date of the auction immediately after receiving the property. However, if the owner of the seized property offers to pay the amount incurred and an amount double the toll, the officer must release the seized property.
Offences and Penalty Under the Indian Tolls Act
Offences under the tolls act include imposing higher tolls to unlawful extortion from travellers. These offences, as provided by Section 6 of the Tolls Act, are as follows:
- Charging a toll on public roads or bridges or demanding a toll for passing through a bazaar by anyone other than designated toll collectors.
- Unlawfully extorting or demanding high tolls than permitted by law is an offence;
- Seizing or selling property with the knowledge that the same is unlawful under the tolls act.
- Unlawfully extorting valuables from anyone in the name of the Act.
The offences mentioned have both criminal and civil remedies. Under criminal provisions, an individual, if convicted before a Magistrate, can be punished with imprisonment of up to 6 months or a fine of up to Rs. 200.
In case of a penalty, the magistrate may, upon discretion, award a part of the fine to the aggrieved person. However, the imposition of a fine does not restrict the aggrieved person from seeking relief by filing a civil suit before the court with competent jurisdiction.
Interaction Between Indian Tolls Act, NHAI Act and Rules
The Tolls Act laid the foundation to impose and collect tolls for using a public road or bridge. It addresses the imposition and collection of tolls, not the manner of implementation.
The NHAI Act was enacted to establish the National Highway Authority of India, a statutory body that maintains national highways. The NHAI can collect tolls on national highways. The Act allows for framing NHAI rules that establish procedures for NHAI’s functioning. Therefore, the rules also provide for the collection of tolls. Therefore, the Indian Tolls Act only deals with the imposition of tolls and the NHAI Act and the NHAI Rules lay the procedure to garner tolls.
The Tolls Act has lost its significance due to the enforcement of the NHAI Act and the emergence of a novel network of roads. However, because NHAI only deals with the national highways that fall under its jurisdiction, its scope is less than the Tolls Act.
Toll Tax Rules Under the Indian Tolls Act and NHAI Rules
The Tolls Act mandates a display of ‘table of tolls‘ near a toll gate. Therefore, the content of the table must be in English, the local language and the content must be written or printed. Toll gates also display the consequences for refusing to pay toll tax or unlawfully demanding a toll in the above manner.
NHAI rules are more strict. Unlike the Tolls Act, the NHAI rules determine the toll for every financial year. The NHAI levies toll on highway users. This amount differs depending on the distance travelled. Along with the amount, the NHAI also provides exemptions to individuals of specific cadres (President, Vice-President, Prime Minister).
Indian Tolls Act and FASTag
The central government introduced FASTag to reduce traffic and gas consumption. FASTag is an electronic tolling system that does not require manual collection of tolls. Instead, the system automatically deducts the amount to pay the toll.
The FASTag system is consistent the objectives of the Tolls Act because it contributes towards the efficient and smooth collection and management of tolls. Furthermore, FASTag enhances transparency in toll collection and reduces the possibility of committing offences under the Tolls Act.
The Tolls Act does not specify how tolls must be collected. However, the FASTag, despite being an electronic collection method, falls in the scope of the Act.
The imposition of tolls generates considerable revenue, and the Tolls Act regulates the collection of tolls to protect the interest of the users of a toll road and empowers an authorised officer to impose and collect tolls. The Indian Tolls Act can be considered an umbrella legislation for toll collection and management. It complements the NHAI Act and Rules that are forefront in dealing with toll collection and management.
However, the toll act does not address the procedure of imposing tolls or provide a redressal mechanism for the latest developments like FASTag. Therefore, updating the provisions of the Indian Tolls Act is essential to include rules applicable in today’s time.
What is toll tax?
Toll tax is the amount paid to the government for using a road or a bridge constructed or repaired by the central or state government. This amount is considered public revenue and is used to maintain the roads.
How are toll tax rates determined?
Toll Tax Rates in India are determined for every financial year (April 1st-March 31st), based on National Highway Fee (Determination of Rates and Collection) Rules, 2008.
Is it mandatory to pay tolls?
It is mandatory for a user of a road or bridge constructed or repaired by the state government to pay tolls. However, police officers on duty or a person or property in police custody need not pay a toll.
What happens if someone does not cooperate with the payment of toll tax?
On failing to pay the toll, authorised officers can seize their vehicles or other property, and police can assist toll collectors. The police can exercise their usual duties while assisting toll collectors.
What is the impact of FASTag?
FASTag's introduction has reduced the need to depend on an individual to collect toll amounts. Thus, it has diminished the possibility of unlawfully demanding or extorting money from people under the premise of toll tax.