Kasim was comparatively more able, efficient and strong ruler. He tried to remove corruption from revenue administration and to raise a modern and disciplined army along European lines.
In order to weaken the influence and interference of the Company on day-to-day affairs of his court and to assert his power and position he shifted his capital to Munger in Bihar. This further displeased the British.
There was rise of differences between the Nawab and the English over various issues. The new Nawab was determined to free himself from foreign control and in fact soon emerged as a threat to their positions in Bengal.
Nawab’s attempts to check the misuse of the dastaks which deprived the Nawab of an important source of revenue added fuel to the fire.
Conflict broke out when Mir Kasim abolished all the duties on internal trade so as to provide a level playing ground to all the traders in his province.
Since abolition of duties automatically checked the use of dastak ,which otherwise allowed the British to trade without paying taxes/duties in the province of Bengal, the increase in the level of tension between the Nawab and the British was nothing unusual.
This led to use of force by both the parties. The Nawab was defeated in a series of battles in 1763 and fled to Awadh.
Mir Kasim formed a confederacy with Shuja-ud-Dualah, the Nawab of Awadh and the Mughal Emperor Shah Alam in a final bid to oust the English from Bengal.
The combined armies of the three powers numbering between 40,000 to 60,000 met an English army of 7,072 troops under Major Hector Munro at the battlefield of Buxar on 22 October, 1764. The English won the day.
The Battle of Buxar was a battle in strictest terms and is therefore, rightly considered as the most decisive battles of Indian history.
The Battle of Buxar was a closely contested battle in which the losses of the English numbered 847 killed and wounded, while on the side of the Indian powers more than 2,000 officers and soldiers were killed.
The battle demonstrated the superiority of English arms over the combined army of two of the major Indian powers.
Buxar confirmed the decisions of Plassey. As a result of this triumph, in 1765, Robert Clive signed two treaties at Allahabad popularly known as Treaty of Allahabad with the Mughal emperor and Nawab of Awadh respectively.
The treaty effectively legalized the British East India Company’s control over the whole of Bengal since Shah Alam II gave the Diwani of Bengal, Bihar and Orissa to the British.
They also managed to get the right of Nizamat from Mir Jaffar, the re-nominated Nawab of Bengal.
In fact the Battle of Buxar firmly established the British as masters of Bengal, Bihar and Orissa and placed Awadh at their mercy. Now English power in Northern India became unchallengeable.
Third Battle of Panipat :
The expansion of the Maratha power in northern India brought them into direct conflict with Ahmad Shah Abdali, the Afghan ruler who staked claim over Punjab.
The two sides finally met in January 1761 at the famous Battle of Panipat. The rising tensions between the Afghans and the Marathas had its genesis in the invasions of Nadir Shah in 1739 and its outcome.
Ahmad Shah Abdali who ascended the throne after the murder of Nadir Shah was tempted to invade India keeping in view, the success of the latter.
Unlike Nadir Shah, Ahmad Shah Abdali focused on acquiring territories in India and managed to occupy Qandhar, Ghazni, Kabul and Peshawar.
His political ambition brought him in direct conflict with Marathas who were at the zenith of their power and were trying to expand their territories relentlessly with the objective to establish a great Maratha Empire covering the entire Northern India.