Constitutional Provisions in Principles of Taxation Law
Taxation is an essential function of any sovereign government. In India, the power to levy and collect taxes is governed by the Constitution of India, particularly Part XII which deals with finance, property, contracts, and suits.
Key Constitutional Provisions
- Article 265: “No tax shall be levied or collected except by authority of law.” This means a tax cannot be imposed or collected without a legal sanction passed by a competent legislature.
- Article 246: Divides the subject matter of legislation between the Union and the States through three lists – Union List, State List, and Concurrent List. Tax-related powers are specified accordingly.
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Seventh Schedule:
It classifies the subjects of taxation:
- Union List: Customs, income tax (excluding agricultural income), excise on manufactured goods, etc.
- State List: Land revenue, taxes on agricultural income, property tax, etc.
- Concurrent List: No direct taxation entries, but laws can be made for procedural and enforcement matters.
- Article 14: Ensures equality before law and equal protection of laws. Taxation laws must not discriminate arbitrarily.
- Article 19(1)(g): Gives citizens the right to practice any profession or to carry on any occupation, trade or business. Excessive taxation that restricts this right can be challenged.
- Article 300A: Guarantees that no person shall be deprived of their property except by authority of law. Imposition of taxes must be legal and not confiscatory.
- Article 279A: Establishes the Goods and Services Tax Council, responsible for making recommendations on issues related to GST implementation across the country.
Conclusion
The Indian Constitution lays a solid foundation for a fair and structured taxation system. The power to tax is distributed carefully between the Union and States, ensuring accountability, legality, and equity in the process of taxation.
Posted by Pavan Law Chambers | June 2025
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