"Trade, commerce and intercourse throughout the territory of India shall be free." Critically examine this statement with reference to Indian Constitution.

CS Executive · Jurisprudence, Interpretation and General Laws · PYQS · June 2023
"Trade, commerce and intercourse throughout the territory of India shall be free." Critically examine this statement with reference to Indian Constitution.

Answer & Explanation:

Part XIII of the Constitution of India under Article 301 guarantees the freedom of trade, Commerce and Intercourse, subject to reasonable restrictions & public interest as mentioned in Article 302 to 307. It is to be noted that Article Part XIII (Article 301-307) is in addition to Articles 14 & 19. Article 301 states: Subject to the other provisions of Part XIII, trade, commerce and intercourse throughout the territory of India shall be free. The object of the freedom declared by this Article is to ensure that the economic unity of India may not be broken by internal barriers. The Supreme Court in the very first case on the matter ( Atiabari Tea Co. v. State of Assam, A.I.R. 1951 S.C. 232 ) declared that only those laws which "directly and immediately" restrict or impede the freedom of trade and commerce are covered by Article 301 and such laws which directly and incidentally affect the freedom guaranteed in that article are not within the reach of Article 301. With respect to regulatory laws also, we may say that if they are the laws which facilitate the freedom of trade and commerce then they are not at all laws which impede the free flow of trade and commerce directly or indirectly. The freedom of trade and commerce guaranteed under Article 301 applies throughout the territory of India; it is not only to inter-state but also to intra-state trade, commerce and intercourse. But in no way it covers the foreign trade or the trade beyond the territory of India. Therefore, the foreign trade is free from the restriction of Article 301. Trade and commerce which are protected by Article 301 are only those activities which are regarded as lawful trading activities and are not against policy. The Supreme Court held that gambling is not "trade". Similarly, prize competitions being of gambling in nature, cannot be regarded as trade or commerce and as such are not protected under Article 301 ( State of Bombay v. RMDC, AIR 1957 SC 699 ). The freedom guaranteed by Article 301 is not made absolute and is to be read subject to the following exceptions as provided in Articles 302-305: (a) Parliament to Impose Restriction in the Public Interest According to Article 302, Parliament may, by law, impose such restrictions on the freedom of trade, commerce and intercourse as may be required in the public interest. (b) Parliament to make Preference or Discrimination Parliament cannot by making any law give preference to one State over the other or make discrimination between the States except when it is declared by that law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India [Article 303 (1) and (2)]. (c) Power of the State Legislature The Legislature of a State may by law: impose on goods imported from other States 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 impose such reasonable restrictions on the freedom of trade, commerce or intercourse within the State as may be required in the public interest. However, no bill or amendment for making a law falling in provision above can be introduced or moved in the Legislature of a State without the previous sanction of the President. [Article 304] (d) Saving of Existing Laws The law which was already in force at the commencement of the Constitution shall not be affected by the provisions of Article 301 except in so far as the President may, by order, otherwise direct (Art 305). (e) Saving of Laws providing for State Monopoly The laws which create State monopoly in any trade, etc. are saved from attack under Article 301, i.e., they are valid irrespective of the fact that they directly impede or restrict the freedom of trade and commerce.

Topics: Indian Constitution

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