In the case of endorsement for any contract carriage for operation within the State, the application shall be made before the State Transport Authority and the said Authority may, for the purpose of regulation and control, fix the maximum number on its assessment of the needs :

Provided that no such endorsement shall be allowed unless the vehicle conforms to the standard and specifications as laid down by the Central Government under rules 82 to 85 of the Central Motor Vehicles Rules, 1989, in respect of a bus or an omnibus. In all other cases, however, the vehicle must be of the type as the State Transport Authority may prescribe from time to time.