1
Atiabari Te Tea Co. Ltd. vs The State Of Assam And Ors. AIR 1962 SC 232 - Ques Questi tion onss rela relati ting ng to Article to Article 301 and 301 and ‘ subject-matter subject-matter jurisdiction’ jurisdiction ’ of the State Legislature.
Siddhant Sattur 1213! Gujarat National Law University .
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A"#no$ledge%ent At the &er' (eginning (eginning I $ould li#e li#e to than# Prof. Girish R. $as affording us the o))ortunit' to resear"h and )resent our findings and our &ie$s on su"h &aried to)i"s "on"erning Ad%inistrati&e la$. *his )a)er $ould not ha&e "o%e fruition $ithout the a(le a(le guidan guidan"e "e of our tea"her tea"her.. ut also than#in than#ing g Dr. Bimal Patel + ,i"e Chan"ellor+ uarat /ational La$ 0ni&ersit'+ to gi&e us a "han"e to )resent our resear"h. Adding Adding to the a(o&e+ it $ould (e hard not to thin# thin# of %' )eers+ and friends $ho ha&e hel)ed %e i%%ensel' in (ringing this )a)er to life. ut the %ost i%)ortant )ersons are our arents $ho %ust (e than#ed for the un"onditional lo&e and su))ort $ithout $ho% this $ould not ha&e (een )ossi(le.
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Introdu"tion *rade+ "o%%er"e and inter"ourse %a' (e do%esti" or foreign or international. Arti"les 31 to 3 deal $ith do%esti" trade and "o%%er"e+ i.e.+ $ithin the territor' of India. Su"h "o%%er"e %a' (e of t$o t')es- 4i5 intra-State and 4ii5 inter-State. Creation of regional trade (arriers %a' )reudi"iall' affe"t national interests as it %a' ha%)er the e"ono%i" gro$th of the "ountr' as a $hole+ and this $ould (e disad&antageous to all the units in the long run. ree flo$ of trade+ "o%%er"e and inter"ourse $ithin a federal "ountr' ha&ing a t$o-tier )olit' is a )re-re7uisite for )ro%oting e"ono%i" unit' of the "ountr'. An atte%)t has therefore (een %ade in all federations+ through ado)ting of a))ro)riate "onstitutional for%ulae+ to "reate and )reser&e a national e"ono%i" fa(ri"+ trans"ending State (oundaries+ to %ini%ise the )ossi(ilit' of e%ergen"e of lo"al e"ono%i" (arriers+ to re%o&e i%)edi%ents in the $a' of trade and "o%%er"e and thus hel) in $ielding the $hole "ountr' into one single e"ono%i" unit so that the e"ono%i" resour"es of all the &arious regions %a' (e e8)loited+ harnessed and )ooled to the "o%%on ad&antage and )ros)erit' of the "ountr' as a $hole.1 *his $as the idea (ehind the in"lusion of Arti"le 31. Arti"le 31 states+ trade+ "o%%er"e and inter"ourse throughout the territor' of India shall (e free.: *his "onstitutional )ro&ision i%)oses a general li%itation on the e8er"ise of legislati&e )o$er+ $hether of the Centre or of the States+ to se"ure unha%)ered free flo$ of trade+ "o%%er"e and inter"ourse fro% one )art of the "ountr' to another. 2 *he origins of this )ro&ision "an (e tra"ed (a"# to se"tion 92 of the Australian Constitution. Atiabari Tea Co. Ltd. v. State of Assam $as one of the first essential "ases that had Arti"le 31 as one of its %ain )oints of "ontention. *he Su)re%e Court+ in this "ase+ %ade it "lear that in drafting the Arti"le 31-3 the %a#ers of the Constitution $ere full' "ons"ious that economic unity $as a(solutel' essential for the sta(ilit' and )rogress of the federal )olit' $hi"h had (een ado)ted (' the Constitution for the go&ernan"e of the Countr'.
1 ;..
36 2 Id.
4
Arti"le 194154g5 is &er' si%ilar to Arti"le 31. *hough their inter-relationshi) is a (it un"ertain. *he res)e"ted author ;..
3 AIR 1962 SC 1!6 4 AIR 19>> SC 1@2
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ath to the Su)re%e Court In the )resent "ase+ the A))ellants a))roa"hed the ?onoura(le Su)re%e Court (' $a' of a))eals on "ertifi"ates granted under Art. 132 of the Constitution (' the ?igh Court of
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Issues I.
*he A"t+ rules and the notifi"ations under the A"t $ere ultra &ires the Constitution+ (e"ause the A"t $as re)ugnant to the )ro&isions of Arti"le 31 as the ta8 on "arriage of tea through the State had the effe"t of interfering $ith the freedo% of trade+ "o%%er"e and inter"ourse.
II.
*ea (eing a "ontrolled industr' under the )ro&isions of the *ea A"t BBIB of 193+ the 0nion o&ern%ent alone had the )o$er to regulate the %anufa"ture+ )rodu"tion+ distri(ution or trans)ort of tea and the urisdi"tion of the Assa% legislature $as thus ousted.
III.
*he ta8 under the A"t $as nothing (ut a dut' of e8"ise+ in su(stan"e+ though not in for%+ and $as thus an en"roa"h%ent on the Central legislati&e field $ithin the %eaning of =ntr' @! of the 0nion List.
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a"ts of the Case *he a))ellants $ere gro$ers of tea in est engal or in Assa% and "arried their tea to the %ar#et in Cal"utta fro% $here the tea $as sold for "onsu%)tion in the "ountr' or $as e8)orted for sale out of the "ountr'. *he sale of tea inside Assa% (ore a &er' s%all )ro)ortion to the tea )rodu"ed and %anufa"tured (' the a))ellants. *hus the (ul# of tea )rodu"ed and %anufa"tured $as "arried out of Assa%+ either for internal "onsu%)tion in India or for e8)ort a(road. esides the tea "arried (' rail+ a large 7uantit' of tea $as "arried (' road or (' inland $ater$a's fro% Assa% to engal and in so%e of these "ases+ fro% one )art of est engal to another )art of the sa%e State through inland $ater$a's+ onl' a fe$ %iles of $hi"h )assed through the territor' of the State of Assa%. *he Assa% legislature )assed the A"t $hi"h re"ei&ed the assent of the o&ernor of Assa% on A)ril 9+ 19!+ and "a%e into for"e on and fro% of the A"t+ )u(lished a notifi"ation in the Assa% o&ern%ent aDette (earing date
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ta8 on "arriage of tea through the State of Assa% had the effe"t of interfering $ith the freedo% of trade+ "o%%er"e and inter"ourseG 425 that tea (eing a "ontrolled industr' under the )ro&isions of the *ea A"t BBIB of 193+ the 0nion o&ern%ent alone had the )o$er to regulate the %anufa"ture+ )rodu"tion+ distri(ution or trans)ort of tea and the urisdi"tion of the Assa% legislature $as thus "o%)letel' oustedG 435 that the ta8 under the A"t $as nothing (ut a dut' of e8"ise+ in su(stan"e+ though not in for%+ and $as thus an en"roa"h%ent on the Central legislati&e field $ithin the %eaning of entr' @! of the 0nion List. *he i%)ugned A"t as also "hallenged on the ground that it $as dis"ri%inator' and thus &oid under Art. 1! of the Constitution. *he "o%)eten"e of the Assa% Legislature to legislate on the su(e"t $as also 7uestioned.
9
ut"o%e at the ?igh Court *he )etitions $ere heard (' a S)e"ial en"h of the Assa% ?igh Court+ $hi"h+ (' its udg%ent and order dated
and $am Labhaya' . *he Learned Chief
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the field of "ontrolled industr' of tea. ?is "on"lusion $ith referen"e to the argu%ent of dis"ri%ination (ased on Art. 1! $as that there $as no )roof forth"o%ing of an' real dis"ri%ination (et$een )ersons and things. ith these "on"lusions Ee#a+ <.+ the third udge entirel' agreed.
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Su)re%e Court’s Ee"ision Appellants’ Arguments Con"erning the first issue+ the A))ellants argued the A"t for"ed sha"#les on the
free strea% of e8"hange and (usiness in res)e"t of tea and ute+ the t$o $ares %anaged (' the A"t and+ "onse7uentl'+ negated the )ro&isions of Art. 31 of the Constitution. It has (een "ontended on (ehalf of the a))ellants that trade+ "o%%er"e and inter"ourse throughout India+ shall (e free fro% e&er'thing in"luding ta8ation. *he a))ellants argued that the freedo%+ "onte%)lated (' Art. 31 %ust (e "onstrued in its %ost "o%)rehensi&e sense of freedo% fro% all #inds of i%)edi%ents+ restraints and trade (arriers+ in"luding freedo% fro% all ta8ation. *he legislation $as (e 'ond the legislati&e "o%)eten"e of the Assa% Legislature and $as not authoriDed (' entr' 6 in List II and that the tea industr' $as a "ontrolled industr' as de"lared (' arlia%ent and dire"tl' "a%e under entr' 2 of List I. Respondent’s Arguments Con"erning the first issue the Res)ondents argued that ta8ation si%)li"iter $as
not inside the ter%s of Art. 31. *a8ation as (eing $hat is indi"ated is not a restri"tion inside the signifi"an"e of art BIII. It is a "hara"teristi" of so&ereignt'+ $hi"h is not usti"ia(le. *he a(ilit' to e8)ense is i%)ossi(le to %iss legislati&e "a)a"it' $ith $hi"h the "ourts are not s)e"ifi"all' "on"erned and that+ "onse7uentl'+ the freedo% )ondered (' Art. 31 donHt %ean freedo% fro% ta8ation and that ta8ation is e8"luded inside the intention of the ter%s. Restri"tion in the "onne"tion of art BIII i%)lied legislation $hi"h had the i%)a"t of o(stru"ting the free flo$ of %er"handise and traffi"s (' ere"tion of tariff di&iders+ for instan"e+ a tariff di&ider+ if raised (' a legislature+ %a' (e usti"ia(le+ 'et not legislation essentiall' for"ing a dut' for )ur)oses of in"o%e. ?e further fought that art BII of the Constitution is an inde)endent )art %anaging %one' and so forth+ e&en as art BIII is an inde)endent )art %anaging e8"hange+ (usiness and inter"ourse inside the do%ain of India. As indi"ated (' the res)ondentsH dis)ute+ freedo% in art BIII i%)lied freedo% fro% o))ressi&e ta8ation and freedo% fro% trade restri"tions. *he "orre"tness of these "ontentions $as dis)uted (' the res)ondent. It urged that the A"t $as )erfe"tl' $ithin the "o%)eten"e of the Assa% Legislature under =ntr' 6 of List II and that the )ro&isions of art BIII $ere $holl' ina))li"a(le to it. *he res)ondent further )leaded that Art. 1! had not (een &iolated and that there $as no su(stan"e in the argu%ent that a "ontrolled industr' it is onl' the 0nion
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o&ern%ent $hi"h "ould deal $ith it or that in realit' the a"t had i%)osed a dut' of e8"ise.
I. Eiffering )inion of Sinha C<. In the )resent "ase+ three se)arate udg%ents $ere deli&ered+ $hile . It had not (een and it "ould not ha&e (een "ontended that the generalit' of the e8)ression used on Art. 31 ad%it of an' e8"e)tion or e8)lanations not o""urring in this art itself+ nor had it (een "ontended that trade+ "o%%er"e and inter"ourse are su(e"t to an' other fetters. All )arties are agreed that trade+ "o%%er"e and inter"ourse throughout the territor' of India
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ha&e (een e%)hati"all' de"lared (' the Constitution to (e free+ (ut there is a $ide di&ergen"e of &ie$s of the ans$er to the 7uestion free fro% $hatK It $as "ontended on (ehalf of the a))ellants that the ans$er to this 7uestion %ust (e that trade+ "o%%er"e and inter"ourse throughout India+ shall (e free fro% e&er'thing in"luding ta8ation. n the other hand+ the "ontention on (ehalf of the 0nion o&ern%ent and the State o&ern%ent $as that the freedo% en&isaged (' Art. 31 did not in"lude i%%unit' fro% ta8ation and that freedo% %eans that there shall (e no trade (arriers or tariff $alls shutting out "o%%odities+ traffi" and inter"ourse (et$een indi&iduals+ and no shutting in. In order full' to a))re"iate the i%)li"ations of the )ro&isions of art BIII of the Constitution+ it $as ne"essar' to (ear in %ind the histor' and (a"#ground of those )ro&isions. *he Constitution A"t of 193 4o&ern%ent of India A"t+ 26 eo. + Ch. 25 $hi"h en&isaged a federal "onstitution for the $hole of India $hi"h "ould not (e full' i%)le%ented and $hi"h also introdu"ed full )ro&in"ial autono%' ena"ted s. 29> )rohi(iting "ertain restri"tions on internal trade. *hat Arti"le en&isaged freedo% of trade and "o%%er"e $ith referen"e to different )arts of India as also freedo% of %o&e%ent of indi&iduals in relation to their trade and other a"ti&ities. ?en"e+ Art. 31 had referen"e not onl' to trade and "o%%er"e+ ordinaril' understood in "o%%on )arlan"e+ (ut also in relation to indi&iduals $ho ha&e to tra&el $ith their goods and "o%%odities throughout the length and (readth of the "ountr'. ?e held that the Constitution %a#ers "onte%)lated ta8es on goods and )assengers to (e i%)osed (' the )arlia%ent on ourne' $as "o&ered (' rail$a' or (' sea or (' airG and (' State Legislatures on ourne's (' road or inland $ater$a's. *he )o$er to ta8 is inherent in so&ereignt'. *he so&ereign State+ in so%e "ases the 0nion+ in other "ases the State+ has the inherent )o$er to i%)ose ta8es in order to raise re&enue for )ur)oses of State. Su"h a so&ereign )o$er ordinaril' is not usti"ia(le+ si%)l' (e"ause the State in its legislati&e de)art%ent has to deter%ine the )oli"' and in"iden"e of ta8ation. It is the State $hi"h deter%ines+ through the Legislature+ $hat ta8es to i%)ose+ on $ho% and to $hat e8tent. *he udi"ial de)art%ent of the State is not e8)e"ted to deal $ith su"h %atters+ (e"ause it is not for the "ourts to deter%ine the )oli"' and in"iden"e of ta8ation. *his )o$er of the State to raise finan"es for o&ern%ent )ur)oses has (een dealt $ith (' art BII of the Constitution+ $hi"h "ontains the total )rohi(ition of le&' or "olle"tion of ta8+ e8"e)t (' authorit' of la$ 4Art. 265.
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?en"e+ (oth arts BII and BIII are %eant to (e self-"ontained in their res)e"ti&e fields. It "annot+ therefore+ (e said that the one is su(e"t to the other. ut it has (een argued on (ehalf of the a))ellants that the )ro&isions of Art. 3! indi"ate that ta8ation is $ithin the )ur&ie$s of the o&erriding )ro&isions+ as the' ha&e (een "hara"terised+ of Art. 31. *he se"ond )art of Art. 3! dealing $ith i%)osition of reasona(le restri"tions on freedo% of trade+ "o%%en"e and inter"ourse (' a States Legislature is on a line $ith the i%)osition (' arlia%ent of su"h restri"ts (et$een one State and another or $ithin an' )art of the territor' of India in )u(li" interest+ "ontained in the Arti"le. Con"erning the argu%ent a(out reading Arti"le 31 in its %ost "o%)rehensi&e sense+ the Court said+ that there is no $arrant for su"h an e8tre%e )osition and that it $ill (e )utting too great an i%)edi%ent to the )o$er of ta8ation &ested in the States and redu"e the StatesH li%ited so&ereignt' under the Constitution to a %ere fi"tion. *hat e8tre%e )osition has+ therefore+ to (e ree"ted as unsound. ?e o(ser&ed that it is )ertinent to (ear in %ind that all ta8ation is not ne"essaril' an i%)edi%ent or a restraint in the %atter or trade+ "o%%er"e and inter"ourse. Instead of (eing su"h i%)edi%ents or restraints+ the' %a'+ on the other hand+ )ro&ide the $here$ithal also to i%)ro&e different #inds of %eans of trans)ort+ for e8a%)le+ in "ane gro$ing areas+ unless there are good roads+ fa"ilit' for trans)ort of sugar"ane fro% sugar"ane fields to sugar %ills %a' (e $holl' la"#ing or insuffi"ient. ith regards to the 7uestion of ‘)ith and su(stan"e’ he held that therefore to address oursel&es to the 7uestion $hether or not it is "o&ered (' an' of the entries in List II of the Se&enth S"hedule. =ntr' 6+ in its &er' ter%s+ *a8es on goods and )assengers "arried (' rail or in inland $ater$a's+ "o%)letel' "o&ers the i%)ugned A"t. *here is no o""asion in this "ase to ta#e re"ourse to the do"trine of )ith and su(stan"e. hile dealing $ith the "hallenge on the grounds of Arti"le 1! of the Constitution+ he held that it is o)en to the Legislature to i%)ose a ta8 in a for% and in a $a' $hi"h it dee%s %ost "on&enient for the )ur)oses of "olle"tion and "al"ulation of the ta8. ?e therefore sa$ fit that the a))eal should (e dis%issed and that the A"t %ust not (e stru"# do$n.
II.
;aorit' )inion ('
an"hoo and
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#no$ledge of the trade (arriers $hi"h had (een raised (' the Indian States in e8er"ise of their legislati&e )o$ers that the Constitution-%a#ers fra%ed the Arti"les in art BIII. *he %ain o(e"t of Art. 31 o(&iousl' $as to allo$ the free flo$ of the strea% of trade+ "o%%er"e and inter"ourse throughout the territor' of India. hile deli&ering his udg%ent he too# )aid attention to "ertain 2eneral considerations $hi"h in"lude the i%)a"t on the legislati&e )o$ers of the State and the arlia%ent and e"ono%i" unit'. It $as held that 5asin2 himself on this character of the ta*in2 "o!er of the state the Learned Attorney-+eneral has as4ed us to hold that art can have no a""lication to any statue im"osin2 a ta*. n our o"inion this contention is !ell-founded. The statement of the la! on !hich reliance has been "laced is itself e*"ressed to be subject to the relevant "rovisions of the constitution6 for instance' the same author has observed 7t is also believed that that "rovision in the Constitution of the 8nited States !hich declares that the citi9ens of each states shall be entitled to all the "rivile2es and immunities of the citi9ens of the several states !ill "reclude any state from im"osin2 u"on the "ro"erty !hich citi9ens of other states may o!n' or the business !hich they may carry on !ithin its limits' any hi2her burdens by !ay of ta*ation than are im"osed u"on corres"ondin2 "ro"erty or business of its o!n citi9ens7 #". 101:%. uttin2 the same "ro"ositions in terms of our Constitution it cannot be su22ested that the "o!er of ta*ation can' for instance' violate the e;uality before the la! 2uaranteed by Art. 1) of the constitution. Therefore the true "osition a""ears to be that' thou2h the "o!er of levyin2 ta* is essential for the very e*istence of the 2overnment' its e*ercise must inevitably be controlled by the constitutional "rovisions made in that behalf. t cannot be said that the "o!er of ta*ation "er se is outside the "urvie! of any constitutional limitations.: *he argu%ent (ased on the theor' that ta8 la$s are go&erned (' the )ro&isions of art BII alone "annot (e a""e)t. *he )o$er to le&' ta8es is ulti%atel' (ased on Art. 2!+ and said )o$er in ter%s su(e"t to the )ro&ision of the Constitution. n the other hand+ the o)ening $ords of Art. 31 are &er' signifi"ant. *he do"trine of the freedo% of trade+ "o%%er"e and inter"ourse enun"iated (' Art. 31 is not su(e"t to the other )ro&isions of the Constitution (ut is %ade su(e"t onl' to the other )ro&isions of art BIIIG that %eans that on"e the $idth and a%)litude of the freedo% enshrined in Art. 31 are deter%ined the' "annot (e "ontrolled (' an' )ro&ision outside art BIII. *his )osition in"identall' (rings out in (old relief the
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i%)ortant )art $hi"h the Constitution-%a#ers $anted the do"trine of freedo% of trade to )la' in the future of the "ountr'. It $as also held That ta4es us to the ;uestion as to !hether Art. 301 o"erates only in res"ect of the entries relatin2 to trade and commerce already s"ecified. 5efore ans!erin2 this ;uestion it !ould be necessary to e*amine the scheme of art ' and construe the relevant Articles in it. t is clear that Art. 301 a""lies not only to inter-State trade' commerce and intercourse but also intra-State trade' commerce and inter course The !ords 7throu2hout the territory of ndia7 clearly indicate that trade and commerce !hose freedom is 2uaranteed has to move freely also from one "lace to another in the same State.: Arti"le 3!4(5 e%)o$er the State Legislature to i%)ose reasona(le restri"tions on the freedo% trade $ith other States or $ithin its o$n territor'. Again+ the referen"e to the territor' $ithin the State su))orts the "on"lusion that Art. 31 "o&ers the %o&e%ent of trade (oth inter-State. Arti"le 3!4(5 is to (e read $ith the non-o(stante "lause relating to Art. 31 as $ell as Art. 33+ and in su(stan"e it gi&es )o$er to the State Legislature so%e$hat si%ilar to the )o$er "onferred on the arlia%ent (' Art. 32. there are three conditions !hich must be satisfied in "assin2 an Act under Art. 30)#b%' - the "revious sanction of the resident must be obtained' the le2islation must be in the "ublic interest' and it must im"ose restrictions !hich are reasonable.: *hus the intrinsi" e&iden"e furnished (' so%e of the Arti"les of art BIII sho$s that ta8ing la$s are not e8"luded fro% the o)eration of Art. 31G $hi"h %eans that ta8 la$s "an and do a%ount to restri"tions freedo% fro% $hi"h is guaranteed to trade under the said art. Eoes that %ean that all ta8 la$s attra"t the )ro&isions of art BIII $hether their i%)a"t on trade or its %o&e%ent is dire"t and i%%ediate or indire"t and re%ote K It is )re"isel' (e"ause the $ords used in Art. 31 are &er' $ide+ and in a sense &ague and indefinite that the )ro(le% of "onstruing the% and deter%ining their e8a"t $idth and s"o)e (e"o%es "o%)le8 and diffi"ult. It $as finall' held that ,e "ro"ose to confine our decision to the Act !ith !hich !e are concerned. f any other la!s are similarly challen2ed the validity of the challen2e !ill have to be e*amined in the li2ht of the "rovisions of those la!s. Our conclusion' therefore' is that !hen Art. 301 "rovides that trade s hall be free throu2hout the territory of ndia it means that the flo! of trade shall run smooth and unham"ered by any restriction either at the boundaries of the States or at any other "oints inside the States themselves. t is the free movement or the trans"ort of 2oods from one "art of the country to other that is intended to be saved' and if any Act im"oses any direct restrictions on the very movement of such 2oods it attracts the "rovisions of Art. 301'
17
and its validity can be sustained only if it satisfies the re;uirements of Art. 30< or Art. 30) of art .: In the result the' held that the A"t )ut a dire"t restri"tion on the freedo% of trade+ and sin"e in doing so it had not "o%)lied $ith the )ro&isions of Art. 3!4(5 to %ust (e de"lared to (e &oid. In &ie$ of this "on"lusion it $as unne"essar' to "onsider the other )oints urged in su))ort of the "hallenge against the &alidit' of the A"t. *he three a))eals and the t$o )etitions $ere a""ordingl' allo$ed. III. Se)arate o)inion of
18
Author’s )inion *rade+ Co%%er"e and inter"ourse %a' (e do%esti" or foreign or international. Arts. 31-3+ deal $ith do%esti" trade and "o%%er"e+ i.e.+ $ithin the territor' of India. Su"h "o%%er"e %a' (e of t$o t')es- 4i5 intra-State i.e.+ "o%%er"e $ithin the territor' of State and 4ii5 inter-State i.e.+ "o%%er"e $hi"h o&erflo$s the (oundar' of ne state and $hi"h e8tends to t$o or %ore States. *he s"he%e of Arts. 31-3 is "o%)le8. *here is a %i8-u) of e8"e)tions u)on e8"e)tions in these )ro&isions. *herefore to ha&e an idea of the e8tent of freedo% granted to trade and "o%%er"e+ and the li%itations i%)osed thereon+ all these "onstitutional )ro&isions %ust (e "onsidered together. A""ording to the Su)re%e Court6+ in e&ol&ing these )ro&isions the fra%ers of the Constitution see% to ha&e #e)t three %ain "onsiderations in their &ie$. ne+ in the larger interests of the "ountr'+ there %ust (e free flo$ of trade+ "o%%er"e and inter"ourse+ (oth inter-State and intra-State. *$o+ the regional interests %ust not (e ignored altogether. *hree+ the Centre should ha&e )o$er of inter&ention in an' "ase of "risis to deal $ithout "reating too %an' )referential or dis"ri%inati&e (arriers. *he e%inent urist E.E. asu $hile "o%%enting on Arti"le 31 has stated=The object of art is not to ma4e inter-State trade' commerce or intercourse absolutely free. $easonable restrictions in "ublic interest are "ermissible. The freedom 2uaranteed by Art.301 is not an absolute freedom. t !ill be infrin2ed only if#i% A >restriction? is im"osed' as distin2uished from a re2ulation !hich in #ii%
reality facilitates trade' commerce or intercourse. Such restriction must directly and immediately affect the free flo! of
4iii5
trade' commerce or intercourse Such restriction must not be covered by any of the "rovisions in Arts. 30<-
30/.:> *he strain of thought follo$ed (' aendragad#ar <.+ in elu"idating on the to)i" of ‘intention of the le2islature’ "a%e a(out fro% the de"isions of the 0S "ourts in
5 ;.. !. 6 Auto%o(ile *rans)ort4Raasthan5 Ltd. &. State of Raasthan AIR 1962 SC 1!6. 7 E.E. asu+ Co%%entar' n *he Constitution f India+ ,olu%e @+ @th =dition+ 21+ Le8is/e8is
utter$orths adh$a+ /oida+ )g 9>1@
19
Cam"s @e!foundO!atonna v. To!n of Barrison and Dean (il4 Co. v. City of (adison. *he Atiabari case also elu"idates on the )oint that as regards the State Legislature+ a)art fro% the li%itation i%)osed (' Art. 31+ "l.415 of Art. 33 i%)oses an additional li%itation+ na%el'+ that it %ust not gi&e )referen"e or %a#e dis"ri%ination (et$een one State and another in e8er"ise of its )o$er relating to trade and "o%%er"e under List II 4entr' 265 or III. Art. 31 of the Constitution guarantees freedo% of trade+ "o%%er"e and inter"ourse not onl' (et$een different States+ (ut also (et$een different )arts of the sa%e State and (et$een the residents of those different )arts. In this "ase+ the Court held that the le&' %ade on goods "arried (' road and inland $ater$a's under the Assa% *a8ation 4on goods "arried (' Roads or Inland ater$a's5 A"t+ 19!+ "ontra&ened Art. 31 on the ground that it $as le&ied solel' on the ground that the goods $ere "arried (' roads or $ater$a's $ithin the area of the State and thus i%)osed a restri"tion u)on the %o&e%ent of goods $ithin the State. *he udg%ent did not go in fa&our of the State+ that is+ the SC did not u)hold the A"t+ (e"ause it didnHt satisf' the sti)ulation of Art. 3!4(5 and Art. 24"5 $hi"h o(liged the assent of the )resident (efore the (ill is %o&ed in the o&erning (od' of a State. enerall' the $a' of the assess%ent $as not unfair or irrational+ as said (' %aorit' of the udges+ to refute the A"t. In this situation+ it $as held that "harges are not li%itations on the fle8i(ilit' of e8"hange+ (usiness and inter"ourseG rather the' hel) in the s%ooth running of the e"ono%' and of the e8"hange+ (usiness of the nation. In an' "ase this udg%ent $as o&erturned or t$ea#ed on a""ount of Auto%o(ile *rans)ort Ltd.1+ $here it is said that the $a' of the dut' $hi"h is not a li%itation on the fle8i(ilit' of e8"hange and trade and is sensi(le ought to (e ad%inistrati&e and "o%)ensator' "harges ust. ther than this another dut' is an o(stru"tion to the fle8i(ilit' of e8"hange+ (usiness and inter"ourse. *herefore e&en though the A"t stood the test of Arti"le 31+ it fell to a )ro"edural te"hni"alit'. ut this )ro"edural fault should not (e ta#en lightl' sin"e the gaining the resident’s assent is all-i%)ortant in the )ro"ess of )ea"e-ti%e legislation. Along $ith "hallenging the A"t on (asis of Arti"le 31+ the legislati&e "o%)eten"' of the Assa% legislature $as also "hallenged on (asis of the do"trine of 8 419@15 2 0S 6!. 9 41915 3! 0S !> 10 Id.
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‘ "ith and substance’ and ‘colourable le2islation’. =&en though the $ords ‘ colourable le2islation’ $ere used onl' on"e during the udg%ent it is essential that the issue $as dealt $ith (' the "ourt al(eit su%%aril'. *he do"trine of )ith and su(stan"e: is a))lied $hen the legislati&e "o%)eten"e of a legislature $ith regard to a )arti"ular ena"t%ent is "hallenged $ith referen"e to the entries in different legislati&e lists+ (e"ause a la$ dealing $ith a su(e"t in one list $ithin the "o%)eten"e of the legislature "on"erned is also tou"hing on a su(e"t in one list $ithin the "o%)eten"e of that legislature.11 In su"h a "ase+ $hat has to (e as"ertained is the )ith and su(stan"e of the ena"t%ent- the true "hara"ter and nature of the legislation. If+ on e8a%ination of the statute+ it is found that the legislation is in su(stan"e on a %ater assigned to the legislature ena"ting that statute+ then it %ust (e held &alid in its entiret' e&en though it %a' in"identall' tren"h u)on %atters (e'ond its "o%)eten"e.12 Legislati&e %atters in different lists are (ound to o&erla) and+ therefore+ in"idental en"roa"h%ents shall ta#e )la"e. In su"h "ases+ the 7uestion %ust (e as#ed+: said Lord orter in rafulla u%ar ;u#heree &. an# f Co%%er"e Ltd. 13 $hat in )ith and su(stan"e is the effe"t of the "hara"ter to (e found.: *he do"trine of )ith and su(stan"e also a))lies to o&erla))ing (et$een State %ade la$s in State List and Central la$ in Con"urrent List. *he State la$ %a' (e ustified e&en if it in"or)orates so%e of the features of Central la$ on Con"urrent list so long the for%er is in )ith and su(stan"e on State List. 1! $'er C< in Su(rah%an'a% Chettiar &. ;uttus$a%i oudan 1 in e8)laining the &alidit' of the do"trine of )ith and su(stan"e saidJ it must inevitably ha""en from time to time that le2islation' thou2h "ur"ortin2 to deal !ith a subject in one list' touches also on a subject in another list' and the different "rovisions of the enactment may be so closely intert!ined that blind adherence to a strictly verbal inter"retation !ould result in a lar2e number of statutes bein2 declared invalid because the Le2islature enactin2 them may a""ear to have le2islated in a forbidden s"here. Bence the rule has been evolved !hereby the 11 ,. ./. Shu#la+ Constitution of India+ *enth =dition+ 26+ =astern oo# Co%)an'+ Eelhi. g.! 12 Id. 13 AIR 19!> C 6. 14 irnar *raders &. State of ;aharashtra 42115 3 SCC 1. 15 AIR 19!1 C !>+ 1.
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im"u2ned statute is e*amined to ascertain its >"ith and substance? or its >true nature and character?' for the "ur"ose of determinin2 !hether it is le2islation !ith res"ect to matters in this list or in that.: If the Constitution of a State distri(utes the legislati&e )o$ers a%ongst different (odies+ $hi"h ha&e to a"t $ithin their res)e"ti&e s)heres %ar#ed out (' s)e"ifi" legislati&e entries+ or if there are li%itations on the legislati&e authorit' in the sha)e of funda%ental rights+ 7uestions do arise as to $hether the legislature in a )arti"ular "ase has to has not+ in res)e"t of the su(e"t-%atter of the statute+ or in the %ethod of ena"ting it+ transgressed the li%its of its "onstitutional )o$ers. *he idea "on&e'ed (' the e8)ression+ of ‘colourable le2islation’+ is that although a legislature in )assing a statute )ur)orts to a"t $ithin the li%its of its )o$ers 'et in su(stan"e and in realit' it transgresses those )o$ers+ the transgression (eing &eiled (' $hat a))ears on )ro)er e8a%ination to (e a %ere )reten"e or disguise. 16 It $as held in .C. aa)ati /ara'an Eeo &. State of rissa 1> that the legislature "annot do so%ething indire"tl' $hat "annot (e done dire"tl'. *he do"trine of "oloura(le legislation a))lies to ta8ation la$s as $ell as other la$s. ut a "hallenge on the (asis of "oloura(le legislation+ $hi"h is not a legiti%ate e8er"ise of )o$er+ (ut (' )ro&iding other rele&ant "ir"u%stan"es $hi"h ustif' the "on"lusion that the statute is "oloura(le and as su"h a%ounts to a fraud. 1@ *he do"trine of "oloura(le legislation has no a))li"ation if the legislature "on"erned has "onstitutional authorit' to )ass a la$ in regard to a )arti"ular su(e"t+ $hate&er the reasons (ehind it %a' (e. 19 *his $as reaffir%ed in haire(endra /ara'an &. State of Assa%.2 *he essen"e of the Atiabari case' $as that the Su)re%e Court held that Art. 31 is not a de"laration of a %ere )latitude+ or the e8)ression of a )ious $ish of a de"larator' "hara"terG it is not also a %ere State of a Eire"ti&e rin"i)les of State oli"'+ (ut it e%(odies and enshrines a )rin"i)le of )ara%ount i%)ortan"e that the economic unity of
16 Asho# u%ar &. 0nion of India AIR 1991 SC 1>92. 17 AIR 193 SC 3> 18 ! 20 AIR 196 SC 3.
22
the "ountr' $ill )ro&ide the %ain sustaining for"e for the sta(ilit' and )rogress of the )oliti"al and "ultural unit' of the "ountr'.
23
i(liogra)h' Books Referred i.
E.E. asu+ Commentary On The Constitution Of ndia + ,olu%e + @th =dition+ 21+
ii.
Le8is/e8is utter$orths adh$a+ /oida E.E. asu+ Shorter Constitution of ndia+ *hirteenth =dition+ 2!+ adh$a And
iii.
Co%)an'+ /e$ Eelhi ?.;. Seer&ai+ Constitutional La! of ndia+ ,olu%e 2+ ourth =dition+ 2!+ .?. Seer&ai
and
/.?.
Seer&ai+
/e$
Eelhi
i&.
;..
&.
u(lishing Co. &t. Ltd.+ Eelhi. ,./. Shu#la+ Constitution of India+ *enth =dition+ 26+ =astern oo# Co%)an'+ Eelhi
