This blog is written by Tarh Baro, a student in 3rd semester pursuing a B.A, LL.B at Lovely Professional University.
Table of Contents
Introduction
Every country should prioritise trade because it directly contributes to national development. Trade is the phenomenon of “purchasing” and “selling” goods and services or exchanging products based on their monetary value. Commerce refers to the method by which products are delivered from the manufacturer to the consumer. These include setting up transportation, offering to banks, and offering insurance services. The movement of these items is referred to as intercourse.
Part XIII of the Indian Constitution, including Articles 301 and 307, states that in order to administer and regulate trade, commerce, and sexual relations, certain laws are necessary. Article 301: Subject to the other provisions of this part, trade, commerce, and intercourse shall be free throughout the entire territory of India.
This article 301- 307 focuses on three keywords:
Trade
the satisfaction of a desire between two parties or individuals through the exchange of goods and services. This is based simply on the notion of necessity, in which there is some form of a beneficial relationship. The buying and selling of assets and securities between two parties are essentially what is meant by the term “trade” in the context of finance.
Commerce
As was already mentioned, commerce encompasses banking and transportation services for all trades.
As an illustration, wholesalers might purchase manufactured goods from producers and then resell them to retailers or distributors nearby. Delivery of these items in this case is mostly dependent on transportation.
Banking and insurance services provide businesses with the required financial support at every level. Shops are ultimately how these products get to the consumers. These actions collectively include trade.
Intercourse
It refers to the transportation of products from one location to another. Both commercial and non-commercial movements and dealings are covered. It would involve going places and interacting with people in any way.
Restrictions on trade and commerce and intercourse:
Article 302 (power of parliament for restrictions on trade, commerce):
This article provides the parliament with certain through which they can impose restrictions on the freedom of trade, commerce and intercourse within the territory of India when needed for the public interest.
Article 303 (restrictions on the legislative power of the union and of the state with regard to trade and commerce):
Clause (1) states that the Parliament is not authorised to pass legislation that would maintain the superior position of one State over another State as a result of admission in trade or commerce into any of the lists in the seventh schedule. Clause (2) states that the Parliament may act if it is declared by law that it is necessary to create such laws or regulations. The authority to determine whether or not there is a shortage of products in certain areas of the territory is placed in the hands of the government.
Article 304 (restrictions on trade, commerce on states)
- States that taxes should be imposed on goods which are imported from other states.
- To impose reasonable restrictions on freedom of trade, commerce or intercourse within the state based on public interest.
Article 305 (saving of existing laws and laws providing state monopolies)
Nothing in articles 301 and 303 shall affect the provisions of any existing law until the president’s orders is otherwise direct.
Article 307 (appointment of authority for carrying out the purpose of articles 301- 304)
Gives the parliament the authority to designate positions to carry out duties for trade, commerce and intercourse.
Case laws
State of Assam v. Atiabari Tea Company
Facts:-
The Assam Taxation Act of 1954’s legality was contested in the case of Atiabari Tea Company v. the State of Assam (levies a tax on goods transmitted through Inland Waterways and roads). The petitioner operated a tea-growing and exporting company from Assam to Calcutta (Kolkata). While passing through Assam the tea was liable to tax under the said Act.
Judgement-
The Supreme Court ruled that if taxes directly and immediately impede trade, they may and do so in a number of ways. The Court held that if taxes were allowed to restrict, obstruct, or hinder the movement, transit, or carrying of goods without adhering to the conditions of Articles 302 to 304, the freedom provided by Article 301 would become illusory. The Court concluded that the challenged law unquestionably imposed a tax directly or immediately on the movements of commodities and as a result fell under the purview of Article 301. The Act was consequently declared invalid, and these taxes could only be imposed lawfully if Article 304(b) was complied with, that is, if a statute enacting them received the prior approval of the President.