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TMI Blog2012 (10) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... sense an additional wage bill may indirectly affect trade or commerce. It cannot be said that levy of four per cent tax by the impugned amendment, on the sale of raw silk and silk yarn, imported from outside the country, could directly impede the free flow of trade and commerce in the aforesaid goods in the territory of India. Accordingly, the contention that the impugned amendment is violative of article 301 of the Constitution is devoid of merit. The object of article 304(a) is to prevent discrimination against goods imported from other States within the territory of India by imposing on them a tax higher than that borne by goods produced in the State. A plain reading of article 304 would show that it does not impose any restricti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution. 3. Re. Article 301: It is relevant to quote article 301 which reads as follows: 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. As held by the Supreme Court in several judgments, a fiscal measure is not outside the prohibition of article 301 but only such taxes which directly or immediately impede the free flow of trade, commerce and intercourse will fall within the prohibition of article 301. However the State Legislature can by law impose any tax on goods imported from other States or Union Territories but without offending article 304(a). In this context, it is relevant to refer to a five-ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticle we must adopt a realistic approach and bear in mind the essential features of the separation of powers on which our Constitution rests. It is a Federal Constitution which we are interpreting, and so the impact of article 301 must be judged accordingly. Besides, it is not irrelevant to remember in this connection that the article we are construing imposes a constitutional limitation on the power of the Parliament and State Legislatures to levy taxes, and generally, but for such limitation, the power of taxation would be presumed to be for public good and would not be subject to judicial review or scrutiny. Thus considered we think it would be reasonable and proper to hold that restrictions freedom from which is guaranteed by article 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenge will have to be examined in the light of the provisions of those laws. Our conclusion, therefore, is that when article 301 provides that trade shall be free throughout the territory of India it means that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves. It is the free movement or the transport of goods from one part of the country to the other that is intended to be saved, and if any Act imposes any direct restrictions on the very movement of such goods it attracts the provisions of article 301, and its validity can be sustained only if it satisfies the requirements of article 302 or article 304 of Part XIII. . . 4. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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