The Indian Constitution is the supreme law of the land, providing the framework for the governance of the country. It lays down the fundamental principles, rights, and duties of citizens, as well as the structure and powers of the government. One crucial provision of the Constitution is Article 265, which deals with the imposition of taxes.

Understanding Article 265

Article 265 states, "No tax shall be levied or collected except by the authority of law." This provision ensures that the imposition and collection of taxes in India must be supported by a valid law passed by the appropriate legislative authority.

The purpose of Article 265 is to prevent arbitrary taxation and ensure that taxes are imposed only in accordance with the law. It serves as a safeguard against the misuse of taxing powers by the government and protects the rights and interests of the citizens.

Authority of Law

According to Article 265, taxes can only be imposed by the authority of law. This means that the power to levy and collect taxes rests with the legislature, which is the body responsible for making laws. The legislature can be either the Parliament for central taxes or the State Legislature for state taxes.

The authority of law implies that there must be a specific legislation that authorizes the imposition of a tax. The law must clearly define the nature of the tax, the taxable event, the rate of tax, the persons liable to pay the tax, and the procedures for assessment and collection.

Limitations on Taxation

Article 265 also imposes certain limitations on taxation. It ensures that taxes are not imposed arbitrarily or in a discriminatory manner. The principles of equality and non-discrimination are fundamental to the Indian Constitution, and they extend to the realm of taxation as well.

Under Article 265, taxes must be imposed in a fair and non-arbitrary manner. They should not discriminate between individuals or classes of individuals without a reasonable basis. The tax burden should be distributed equitably, taking into consideration the ability to pay and the principles of social justice.

Furthermore, Article 265 also prohibits the imposition of retrospective taxes. Retrospective taxation refers to the imposition of taxes on transactions or events that have already occurred in the past. This provision ensures that taxpayers are not subjected to unexpected tax liabilities for actions that were legal at the time they were undertaken.

Judicial Review of Taxation

Article 265 provides a basis for judicial review of taxation. It empowers the courts to examine the validity of tax laws and the imposition of taxes. If a taxpayer believes that a tax has been imposed in violation of Article 265 or any other constitutional provision, they can approach the courts for redress.

The courts play a vital role in ensuring that taxes are levied and collected in accordance with the law and the principles of the Constitution. They have the power to strike down tax laws that are found to be unconstitutional or in violation of the rights of the taxpayers.

Conclusion

Article 265 of the Indian Constitution is a crucial provision that safeguards the rights of taxpayers and ensures that taxes are imposed only by the authority of law. It prevents arbitrary taxation and ensures that taxes are levied and collected in a fair and non-discriminatory manner. The provision also allows for judicial review of tax laws, providing a mechanism for taxpayers to challenge the validity of taxes imposed on them. By upholding the principles of legality and fairness in taxation, Article 265 plays a vital role in the Indian constitutional framework.