Constitutional Provisions on

Trade (Article 301 -307)

Kishore P
Article 301
• 301. Freedom of trade, commerce and intercourse.—
Subject to the other provisions of this Part, trade, commerce and
intercourse throughout the territory of India shall be free.

• Object – Economic unity

• Positively worded but negative in application
• 301 refers to freedom from laws which go beyond regulation
• Not to burden, restrict or prevent trade movements
Article 19(1)g and Article 301
• Prima facie similar
• But there are Points of distinction
a)Fundamental vs justiciable right
b)Citizens vs all individuals

Automobile transport vs State of Rajastan, AIR 1962 SC 1406 (1418)

• Rajasthan MV act imposed tax on all owners of Motor Vehicles. That was
challenged under article 301
• This case law clarified the distinction between article 19 and article 301.
• The reasonableness can be checked only through article 19, article 301 comes into
picture when there is a colourable exercise of regulatory power.
Trade and commerce
• What all is included under the trade and commerce
• Res extra commercium – explained in State of Punjab vs Devans
modern Breweries 2004 11 SCC 26

Taxation and Article 301

• Atiabari tea co. vs State of Assam 1961 1 SC 232(5 Judges)
• Automobile transport vs State of Rajastan, AIR 1962 SC 1406
(7Judges)
• Jindal Stainless vs state of Haryana, AIR 2016 SC 5617 (9 Judges)
• 302. Power of Parliament to impose restrictions on trade, commerce and
intercourse.—
• Parliament may by law impose such restrictions on the freedom of trade, commerce
or intercourse between one State and another or within any part of the territory of
India as may be required in the public interest.

• 304. Restrictions on trade, commerce and intercourse among States.—

Notwithstanding anything in article 301 or article 303, the Legislature of a State may
by law—
• (a) impose on goods imported from other States 1 [or the Union territories] any tax to
which similar goods manufactured or produced in that State are subject, so, however,
as not to discriminate between goods so imported and goods so manufactured or
produced; and
• (b) impose such reasonable restrictions on the freedom of trade, commerce or
intercourse with or within that State as may be required in the public interest:
Provided that no Bill or amendment for the purposes of clause (b) shall be introduced
or moved in the Legislature of a State without the previous sanction of the President