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Answer
Introduction
In the Indian Constitution, the provisions regarding the
freedom of trade, commerce and intercourse were adopted from the Constitution
of Australia. According to Section 92 of the Australian Constitution, there
should be freedom of trade, commerce and intercourse which may be carried out
by ocean navigation or internal carriage.
In India, we do not copied it verbatim in our
Constitution. It has been adopted with suitable modifications as:
1.
That the freedom
guaranteed is not limited
to among the states
but ‘throughout the territory of India.
2.
Unlike the Australian counterpart, in our country, the freedom is not absolute as the rest of the provisions impose several restrictions and exceptions to this freedom.
Note:
1.
Article 301 applies not only to inter-State but also intra-state trade, commerce and intercourse
2.
The part 13 of the Constitution
is not
subject to any other part or provision of this constitution.
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The Object of Articles 301 To 307:
The objective behind the principle of freedom of inter-State commerce
is that within the country trade and commerce
should develop to the largest
possible extent and it should
not be hindered by artificial barriers and restrictions imposed by the various States of the federation. Accordingly, the Constitution has considered
the largest interests of India as a whole
as well as the interests
of particular States
and the wide geography of this country
in which the interests of one region
differ from those of
another.
Freedom of trade, commerce, and intercourse
Article 301 talks about the
freedom of trade, commerce, and intercourse throughout the country. It states
that subject to other provisions under Part XIII, the freedom to carry on these
activities shall be free. Freedom here means the right to freedom of movement
of persons, property, things that may be tangible or intangible, unobstructed
by barriers within the state (intra-scale) or across the states (inter-scale).
The freedom guaranteed by Article-
301 is freedom from all restrictions, except those which
are provided for in the other
provisions of part XIII
(Arts-302 to 305).
The freedom guaranteed by Article-301 is in the widest terms and applies to all forms of trade, commerce and intercourse. This freedom cannot
be taken away by an executive action.
Meaning of the Terms Trade, Commerce
and Intercourse:
The word ‘trade’ means
‘buying’ or ‘selling’ of goods while the term ‘commerce’ includes all forms of
transportation such as by land, air
or water. The term intercourse means movement of goods from one place to
another place. Thus, Intercourse will cover all those activities which might
not be included in the ambit of trade and commerce.
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Limitations/ Restrictions on Trade and Commerce [Articles-302 -305]:
Even though Article 301
provides that trade, commerce and intercourse should be free throughout the
territory of India, this freedom is not absolute in nature. Certain restrictions
are provided in the same part of the Constitution.
Article 302 gives power to
the Parliament to impose restrictions on the freedom of trade, commerce or
intercourse carried on within a state or across states anywhere in the
territory of India, provided that the restrictions should be imposed in the
interest of public and it should be reasonable.
In the case of Prag Ice
& Oil Mills v. Union of India, it was held by the Supreme Court that even
though Article 302 does not speak about reasonable restrictions, but still the
restrictions which can be imposed under this Article should have a reasonable
nexus with the public interest for which the restriction is placed.
Exception for this section
While the Parliament has the power to
impose restrictions on the freedom of trade in any State or part of the
territory of India, this power is subjected to the provisions of Article 303 of
the Indian Constitution, which provides that no discriminatory restriction can
be made by the Parliament which gives benefit to one State while the other
States are excluded from such benefit. Although this restriction is subjected
to clause 2 of the sane article, which states that in case of scarcity in a
State, the Parliament can be allowed to impose such discriminatory restrictions
so that the State which is facing the problem of scarcity to overcome it.
Further, Article 304 provides that A State Legislature may impose on goods and services, imported from other States
any tax if similar
goods produced in that State also are taxed in a like manner. A State
Legislature is also authorized to impose reasonable restrictions on the freedom of trade and commerce with or within
that State as may be required
in the public interest.
Important Cases
Atiabari Tea Co. V. State of Assam: in this case, a question was addressed that Any kind of tax that is levied on any particular activity which
involves inter-state
transaction can be taken to be a restriction on the freedom of trade or not?
The Apex court held that tax
laws are not outside the scope of ‘the Freedom'. And therefore, the Assam State
Legislature had to amend the provision as to meet the requirements of the
exception in Article 304(b) so that the tax that it imposed did not amount to a
direct and immediate impact of the movement of the goods.
In State of Mysore V. Sanjeeviah, the Government made a rule under the Mysore Forest Act, 1900, banning movement of forest produce between sunlight and sunrise. The Supreme Court held the rule void as it was not a ‘regulatory’ but ‘restrictive’ measure which infringed the right guaranteed under Art.301.
In Automobile Transport Ltd. V. State of Rajasthan, the appellant challenged the validity of the Rajasthan Motor
Vehicles taxation Act, 1951, as violating Art-301. The State Govt imposed a tax
on all motor vehicles used and kept within the State of Rajasthan. The Court
held that the tax valid as they were only regulatory measures imposing compensatory taxes for facilitating trade, commerce and intercourse.
Conclusion
The objective behind
the principle of freedom of inter-State commerce
is that within the country trade and commerce should develop to the
largest possible extent and it should not be hindered
by artificial barriers
and restrictions imposed
by the various States
of the federation. The framers
of the Indian Constitution had the benefit of the experiences at the time of
drafting the provisions dealing with inter-State trade and commerce as embodied
in the Constitution.
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