Supreme Court Upholds Union’s Competence to Levy Toll on National Highways

The Hon’ble Supreme Court of India, in T.S.R. Venkatramana v. Union of India & Ors. (SLP (C) Diary No. 72032/2025, order dated March 25, 2026), dismissed a challenge to the Union of India’s power to levy toll on National Highways (NHs), holding that such levy constitutes a fee traceable to Entry 23 read with Entry 96 of List I (Union List) of the Seventh Schedule to the Constitution of India and falls within the legislative domain of Parliament.

The dispute arose from a challenge to the toll collection framework on NHs, with the petitioner contending that the power to levy tolls is vested in the States under Entry 59 of List II (State List) of the Seventh Schedule to the Constitution of India, and that the collection of toll by the Union or its instrumentalities, including the National Highways Authority of India (NHAI), lacked legislative competence.

The Hon’ble Madras High Court, by its judgment dated August 7, 2025, had rejected the challenge and upheld the validity of the statutory framework. The matter was subsequently carried before the Hon’ble Supreme Court.

Before the Hon’ble Supreme Court, the principal issue was whether the levy of toll on NHs falls within the legislative competence of the Union or the States, particularly in light of the apparent overlap between Entry 23 read with Entry 96 of the Union List and Entry 59 of the State List.

The Hon’ble Supreme Court, upon examining the constitutional scheme under Article 246 and the Seventh Schedule, held that having regard to the pith and substance of Entry 23 read with Entry 96 of List I, any toll which is essentially a charge or fee collected for the use of National Highways is squarely covered within the Union List. The Court further clarified that the expression “tolls” under Entry 59 of List II must be restricted to those tolls or charges which are not collected by the Union Government under the Union List.

Rejecting the petitioner’s contention, the Hon’ble Supreme Court found no reason to interfere with the impugned judgment and dismissed the special leave petition.