Freedom of Trade, Commerce and Intercourse: Articles 301 to 307
Freedom of Trade, Commerce, and Intercourse: Articles 301 to 307
1. Overview
Articles 301 to 307 of the Indian Constitution guarantee the freedom of trade, commerce, and intercourse throughout the territory of India. This freedom is fundamental to maintain a common market and ensure economic unity across states.
2. Article 301: Freedom of Trade, Commerce, and Intercourse
Article 301 provides that trade, commerce, and intercourse throughout the territory of India shall be free.
This freedom means that:
There shall be no unreasonable restrictions on movement of goods and persons between states.
States cannot enact laws that discriminate against goods or trade from other states.
Ensures a single integrated market across India.
3. Article 302: Power of Parliament to impose restrictions
Parliament may impose restrictions on trade, commerce, and intercourse between states or within states in the public interest.
Such restrictions can be imposed to protect:
Public health and morality
Prevention of smuggling
Protection of national interests or emergencies
However, restrictions must be reasonable and not arbitrary.
4. Article 303: Restrictions on Parliament and State Legislatures
Neither Parliament nor state legislatures can make laws that:
Give preference to the trade or commerce of one state over another.
Discriminate against goods from other states.
Exception: This restriction does not apply to laws giving preference to goods manufactured or produced in any state for promoting cottage industries or small-scale industries.
5. Article 304: Power of state legislatures to impose restrictions
State legislatures can impose reasonable restrictions on trade and commerce within the state:
For public health, public morality, or public order.
To impose reasonable taxes on goods or passengers.
Such laws must be non-discriminatory against trade from other states.
6. Article 305: Saving of existing laws and laws providing for State monopolies
Laws existing before the Constitution came into force and laws providing for state monopolies are protected from challenges under Articles 301-304.
7. Article 306: Repealed
This article was repealed by the Constitution (Seventh Amendment) Act, 1956.
8. Article 307: Appointment of authority for carrying out the purposes of Articles 301 to 304
Parliament can appoint an authority to carry out the purposes of Articles 301 to 304, ensuring freedom of trade and commerce is protected.
Key Principles
The freedom of trade and commerce is not absolute; it is subject to reasonable restrictions imposed by Parliament or state legislatures.
Restrictions must be non-discriminatory, reasonable, and in the public interest.
The Constitution aims to maintain the economic unity of the country by preventing protectionist or parochial laws.
Important Case Law
1. State of Bombay v. United Motors (India) Ltd. (1962)
Held that Article 301 guarantees freedom from unreasonable restrictions on trade, commerce, and intercourse.
Laws that regulate trade are permissible only if they are reasonable and non-discriminatory.
2. Amin Chand Pyarelal v. State of Madhya Pradesh (1959)
The Court ruled that freedom of trade means no trade barriers that are arbitrary or unjustifiable.
However, states can impose reasonable restrictions on trade within their territory.
3. C.N. Raghunath Rao v. State of Mysore (1961)
The Supreme Court held that the power to impose reasonable restrictions on trade by the State is recognized under Article 304.
However, the restrictions must not be protectionist or discriminatory against goods from other states.
4. Union of India v. Harjeet Singh Sandhu (1966)
The Court clarified that restrictions on trade must be reasonable and imposed in public interest.
Any law that seeks to give preference to goods of one state over another violates Article 303 unless it is for the promotion of cottage or small-scale industries.
5. Shri Ambica Mills Ltd. v. Union of India (1969)
The Court held that Parliament’s power to restrict trade under Article 302 must be exercised reasonably and only for the public interest.
Summary Table
| Article | Provision | Purpose |
|---|---|---|
| Article 301 | Freedom of trade, commerce, and intercourse throughout India | Ensure free movement of goods and persons |
| Article 302 | Parliament can impose restrictions on trade in public interest | Control for public welfare |
| Article 303 | No preference or discrimination allowed in trade laws by Parliament or states | Prevent protectionism |
| Article 304 | States can impose reasonable restrictions on trade within the state | Public health, order, taxation |
| Article 305 | Saving of existing laws and State monopolies | Protect pre-constitutional laws |
| Article 307 | Parliament can appoint authority to enforce Articles 301-304 | Regulatory oversight |
Conclusion
The Constitution ensures the freedom of trade, commerce, and intercourse across India to create a single, integrated economic unit. However, this freedom is balanced by the power of Parliament and state legislatures to impose reasonable restrictions for public interest, maintaining a balance between economic freedom and social welfare.
Judicial interpretations have played a crucial role in defining the scope of reasonable restrictions and preventing discriminatory practices that could harm the unity of the Indian market.
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