Article 288 of the Costitution of India with Case law
🇮🇳 Article 288 of the Constitution of India
Topic: Exemption from taxation by States in respect of water or electricity in certain cases
(Under Part XII – Finance, Property, Contracts and Suits)
🔹 Text of Article 288 (Simplified):
Clause (1):
A State shall not impose tax on the consumption or sale of water or electricity in the following situations unless Parliament by law otherwise provides:
Where the water or electricity is consumed by the Government of India or by a railway company, or
Where the water or electricity is sold to the Government of India or to a railway company,
in connection with the construction, maintenance, or operation of any railway, dock, etc.
Clause (2):
Parliament may by law remove or modify this restriction.
📘 Purpose of Article 288:
To protect Union activities (especially in sectors like railways, defence, ports) from State-level taxation that could obstruct essential services.
Ensures smooth inter-governmental operations between Union and States.
🧾 Key Features of Article 288:
| Feature | Description |
|---|---|
| Applies to | States (restricts their power to tax) |
| Subjects Covered | Tax on sale or consumption of water and electricity |
| Exception | If sale/consumption is by/for Government of India or Railways |
| Conditional Provision | Parliament may override this restriction by enacting a law |
⚖️ Important Case Laws Related to Article 288:
🔹 1. Union of India v. State of Uttar Pradesh, AIR 2007 All 27
Facts: UP imposed electricity duty on consumption by railways.
Held: Such a tax was not permissible under Article 288(1), as the electricity was used for railway operations, and there was no law by Parliament permitting the tax.
🔹 2. Western Railways v. State of Rajasthan, AIR 1975 Raj 84
The State Electricity Duty Act was challenged for taxing consumption by Railways.
Court ruled that the State cannot levy such tax unless Parliament permits it via legislation, in accordance with Article 288.
🔹 3. Union of India v. State of Madhya Pradesh, AIR 2004 MP 37
The Madhya Pradesh government tried taxing electricity used by the Central Government for defense installations.
Held: Prohibited under Article 288, reinforcing the constitutional immunity of Union operations from State taxes unless Parliament legislates.
🧭 Related Provisions for Context:
| Article | Subject | Relevance |
|---|---|---|
| 285 | Exemption of Union property from State tax | Broader immunity for Union properties |
| 287 | No tax on electricity in certain cases | For inter-State electricity use |
| 288 | Restriction on State tax on water/electricity | Specific to Union/Railways use |
✅ Summary Table:
| Clause | Provision |
|---|---|
| 288(1) | States cannot tax water/electricity used or sold to Union/Railways without a parliamentary law |
| 288(2) | Parliament can remove or modify this restriction by law |
| Key Objective | Prevent interference by States in essential Union operations |
| Status | Still in force; States must check for parliamentary law before imposing tax |
📌 Conclusion:
Article 288 is a protective fiscal provision for the Union, especially for crucial services like railways and defense, ensuring that State taxation powers do not interfere with national infrastructure or services. Courts have upheld this constitutional protection and enforced it strictly.
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