Examine critically the provisions guaranteeing freedom of trade and commerce and the power of the State to impose restrictions on this right in the public interest.

Question: Examine critically the provisions guaranteeing freedom of trade and commerce and the power of the State to impose restrictions on this right in the public interest. [BJS 1979]

Find the answer to the mains question only on Legal Bites. [Examine critically the provisions guaranteeing freedom of trade and commerce and the power of the State to impose restrictions on this right in the public interest.]

Answer

Part XIII of the constitution contains provisions relating to the freedom of trade, commerce and intercourse within the territory of India. The provisions are laid down in Articles 301-307.

Article 301 reads: “subject to the other provisions of this part, trade, commerce and intercourse throughout the territory of India shall be free.” Thus, ‘freedom of trade, commerce and intercourse’ means the free movement/transport and exchange of goods. It means that there shall be no prior restraint upon trade and commerce. The provision secures the freedom subjected to restrictions/limitations which may be imposed under other provisions of part 13. While the general rule of freedom of trade and intercourse is enunciated in Article 301, it may be subjected to restrictions laid down in Articles 302-305.

1. it is subject to the non-discriminatory restrictions imposed by parliament, in the public interest [Article. 302].
2. even discriminatory or preferential provisions may be made by parliament, for the purpose of dealing with a scarcity of goods arising in any part of India [Article 303(2)].
3. non-discriminatory taxes may be imposed by states on goods imported from other states similarly as on goods produced within the state [Article. 304(a)].
4. reasonable restriction may be imposed by a state “in the public interest” [Article 304(b)].
5. restrictions imposed by “existing law” (an act passed before the commencement of the constitution) and laws providing for state monopolies to continue except in so far as provided otherwise by an order of the president [Article 305].
6. Article 307 empowers parliament to appoint by law such authority, as it considers appropriate for carrying out the purposes of Articles 301-304.
7. restrictions on freedom of trade under parliamentary law [Articles 302-303]

The critical illustration on the power of the State to impose restrictions on this right in the public interest was provided by the Supreme Court in the case of Chintaman Rao v. State of Madhya Pradesh [AIR 1951 SC118]. In this case, State Law prohibited the manufacture of bidis in the villages during the agricultural season. The object was to ensure an adequate supply of labour for agricultural purposes. Even villagers, who were incapable of engaging in agriculture, like old people, women, and children, etc., and those who supplemented their income by making bidis in their spare time, were prohibited from engaging themselves in bidi manufacture without any reason.

The court ruled prohibition to be unreasonable because it was in excess of the object in view and was drastic in nature and further laid down the test for a “reasonable restriction” as follows:

The phrase ‘reasonable restriction’ connotes that the limitation imposed on a person in the enjoyment of the right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. The courts are thus entitled to consider the ‘proportionality’ of these restrictions.

The word ‘reasonable’ implies intelligent care and deliberation i.e. the choice of a course which reason dictates. Legislation that arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in Article 19(1)(g) and the social control permitted by Article 19(6) it must be held to be wanting in that quality.

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Important Mains Questions Series for Judiciary, APO & University Exams

1. Constitutional Law Mains Questions Series Part-I
2. Constitutional Law Mains Questions Series Part-I
3. Constitutional Law Mains Questions Series Part-II
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5. Constitutional Law Mains Questions Series Part-V
6. Constitutional Law Mains Questions Series Part-VI
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