After the Battle of Chinsura, the British deposed Mir Jafar and placed his son in law Mir Kasim as Nawab of Bengal. Mir Kasim, soon began to show a will of his own, and to cherish dreams of independence. He eventually shifted his capital from Murshidabad to Munger in Bihar where he raised an independent army.
The problem was the free trade. It was during Farrukhsiyar reign, in 1717, that the British East India Company purchased duty-free trading rights in all of Bengal for a mere three thousand rupees a year.
Mir Kasim opposed that the imperial Dastak was discriminatory. The British could trade without paying taxes but the other local merchants with dastaks were required to pay up to 40% of their revenue as tax.
In a reaction, Mir Kasim abolished all taxes on the local traders as well. This upset the British and hostility was renewed.
The forces of Mir Kasim overran the Company offices in Patna in 1763, killing several Europeans including the resident. Later he teamed up with Nawab Shuja-ud-Daula of Avadh and Shah Alam II, the itinerant Mughal emperor. But all of them were defeated in the Battle of Buxar in 1764.
Meanwhile, Mir Jafar managed to regain the good graces of the British and he was again appointed Nawab in 1763 and held the position until his death in 1765.