Searching Case Laws & Precedent on Legal Query!
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query!
Scanned Judgements…!
References:- ["Indian Medical Association, Kerala State Branch, Represented By Its Secretary Dr. Joseph Benaven vs Union of India, Represented by The Secretary, Department of Revenue, Ministry of Finance, Government of India, North Block, New Delhi - Kerala"]- ["Delhi International Airport (p) Ltd VS South Delhi Municipal Corporation - Delhi"]- ["Dr.N.B.D.N.B.Balalle and others vs Chief Accountant Ministry of Justice and others - - Court Of Appeal"]- ["City Municipality represented by Executive Officer Sri Shaik Sheriff Adilabad v. Mahado Seetha Ram - Andhra Pradesh"]- ["Oswal Oil And Vanaspathi Industries vs The Commercial Tax Officer - Madras"]- ["Shaw Wallace and Co. , Ltd. VS Deputy Commercial Tax Officer, Secunderabad - Andhra Pradesh"]- ["State Bank of Mysore VS Asst. Commr. Of Comml. Taxes - Karnataka"]- ["Moore vs United States - Supreme Court"]- ["Suresh Gupta VS Municipal Corporation Raipur, Through the Commissioner - Chhattisgarh"]- ["KARNATAKA BANK LTD. vs STATE OF A.P. . - Supreme Court"]- ["Southern Railway Employees Workshop Canteen VS Deputy Commercial Tax Officer, Tiruchirapalli Town Iv, and Another - Madras"]- ["Manjilas Food Tech (P) Ltd. VS Union Of India - Kerala"]- ["Commissioner of Income-tax Andhra Pradesh v. M/s. Ramadayal Ghansiram and Sons Hyderabad - Andhra Pradesh"]
What is the definition of the word 'tax' as per the Constitution and Supreme Court? This question lies at the heart of India's fiscal framework. The Indian Constitution meticulously delineates taxation powers between the Union and States, while the Supreme Court has shaped these through landmark judgments. Understanding this is crucial for businesses, taxpayers, and legal professionals navigating tax laws.
Taxation isn't just revenue collection; it's balanced against fundamental rights like trade freedom (Articles 301-304) and equality (Article 14). This post breaks down the constitutional definition, key SC decisions, and distinctions from fees, drawing from authoritative sources. Note: This is general information, not legal advice. Consult a professional for specific cases.
Article 366(28) provides a broad definition: 'tax' means a tax levied by or under any law of the Union or of a State. This wide scope applies constitutionally but adapts to legislative lists in the Seventh Schedule. The definition of tax in terms of Clause (28) of Article 366 of the Constitution is wide in nature. The said definition may be for the purpose of the Constitution; but it must be borne in mind that the legislative competence conferred upon the State Legislature or Parliament to impose tax or fee having been enumerated in different entries in the three lists contained in the Seventh Schedule of the Constitution of India, the same meaning of the expression tax unless the context otherwise requires should be assigned. ATUL GARG VS NAGAR NIGAM GHAZIABAD - 2018 Supreme(All) 1515
This ensures taxes align with Entries like 62 (entertainments tax, State List) or 97 (Union residual powers). Article 265 mandates: No tax shall be levied or collected except by authority of law. Taxes must respect federal division. Ranjit Singh VS Commissioner Of Income Tax, U. P - 1961 0 Supreme(SC) 186
The Supreme Court has clarified that tax laws aren't immune to constitutional scrutiny, especially under Part XIII (trade freedom).
Here, the Court ruled tax laws fall under Article 301. Taxation laws are not excluded from the operation of Article 301. They must comply with Article 304(a)-(b): public interest, reasonableness, and Presidential approval. Implication: Taxes restricting trade need safeguards. Ranjit Singh VS Commissioner Of Income Tax, U. P - 1961 0 Supreme(SC) 186
Only direct and immediate trade restrictions trigger Article 301. Taxes on goods movement must meet Article 304(b). Restrictions on trade via taxation must be reasonable and in public interest, with prior presidential approval. Ranjit Singh VS Commissioner Of Income Tax, U. P - 1961 0 Supreme(SC) 186
Re-examined compensatory taxes. A tax is compensatory if linked to facilities provided. The Court clarified the criteria for determining whether a tax is compensatory, emphasizing that the link between tax and facilities must be substantial. Steel Limited VS State of Jharkhand - 2008 0 Supreme(Jhk) 594
Other cases like Suraj Mall Mohta (1955) struck discriminatory provisions under Article 14: Laws that discriminate without rational basis violate Article 14. Ranjit Singh VS Commissioner Of Income Tax, U. P - 1961 0 Supreme(SC) 186
SC repeatedly distinguishes taxes (no quid pro quo) from fees (service-linked). There is no scope of implied authority for imposition of a fee. The fee must be authorised by the statute. Dravya Finance Pvt. Ltd. VS Life Insurance Corporation of India - 2010 Supreme(Bom) 719
In LIC policy assignments, a Rs. 250 charge was ultra vires: Charge imposed without authority of law. Dravya Finance Pvt. Ltd. VS Life Insurance Corporation of India - 2010 Supreme(Bom) 719
States can't encroach Union domains. In amusement parks, service tax under Finance Act, 1994 encroached Entry 62 (State): State legislative competence prevails over Union taxation on amusement activities per Entries 62 and 97. Doctrine of pith and substance applied. Vengad Resorts & Retreats Limited vs Union of India, Represented by Secretary to Revenue Department, New Delhi - 2025 Supreme(Ker) 3137
Motor vehicles tax excludes off-road machinery: Heavy Earth Moving Machinery... do not qualify as 'motor vehicles' under the Motor Vehicles Act. Entry 57 (State) inapplicable. Ultratech Cement Ltd. VS State of Gujarat - 2026 Supreme(SC) 48
Excise on alcoholic preparations: Repeal/re-enactment via General Clauses Act Section 8 preserved sales tax exemptions. Sukh Dev Sarup Gupta VS State Of Punjab - 1965 Supreme(P&H) 36
Advertisement fees during elections: Exempt under municipal acts but require permission; fees akin to tax struck down. ATUL GARG VS NAGAR NIGAM GHAZIABAD - 2018 Supreme(All) 1515
Route extension fees: No power without quid pro quo. The authority cannot levy fees over and above tax without quid pro quo. Niwas Budhaulia, Sri Ganeshi Lal Budhaulia VS Secretary, Regional Transport Authority, The Regional Transport Authority - 2005 Supreme(All) 1927
Administrative charges in molasses: Not includible in assessable value as passed to government. Commissioner Of Central Excise, Lucknow, U. P. VS Chhata Sugar Co. LTD. - 2004 Supreme(SC) 268
These ensure taxes serve public interest without arbitrary burdens.
The Constitution defines 'tax' broadly under Article 366(28), but SC interprets it through federalism, rights protection, and quid pro quo for fees. Landmark rulings like Atiabari and Jindal emphasize scrutiny. Steel Limited VS State of Jharkhand - 2008 0 Supreme(Jhk) 594Ranjit Singh VS Commissioner Of Income Tax, U. P - 1961 0 Supreme(SC) 186
Key Takeaways:- Taxes must have legislative backing (Article 265).- Trade-impacting taxes comply with Articles 301-304.- Fees ≠ Taxes; need service link.- Context-specific competence via Seventh Schedule.
Stay informed on evolving tax laws. For tailored advice, reach out to legal experts.
References:- Jindal Stainless Ltd. v. State of Haryana Steel Limited VS State of Jharkhand - 2008 0 Supreme(Jhk) 594- Early decisions (Suraj Mall, etc.) Ranjit Singh VS Commissioner Of Income Tax, U. P - 1961 0 Supreme(SC) 186- Discrimination principles SURAJMULL NAGARMULL VS THE COMMISSIONER OF INCOME TAX - 1961 0 Supreme(Cal) 76
#TaxLawIndia, #IndianConstitution, #SupremeCourtRulings
assigned to the same word/concept by the Supreme Court in the context of its setting under the Constitution. ... sense, was rejected by the Supreme Court. ... We are of the view that when a word/concept in the Constitution has been interpreted by the Supreme Court in a particular manner, a legislative body, that derives its legislative competence to enact a Statute from the Constitution, cannot gi....
(supra), where the Supreme Court held that it is settled law that the word 'include' is generally known as a word of extension and it seeks to enlarge the meaning of the word and phrases occurring in the body of the statute. ... In the said case, a question arose relating to levy of property tax on mobile towers. The issue before the Court was whether, for the purpose of levy of property tax, mobile towers are akin to 'lands and buildings' as #HL_STA....
As per Article 125 of the Constitution, the Supreme Court has the sole and exclusive jurisdiction to determine any matter related to the interpretation of the Constitution. ... Concluding remarks The Constitution is the supreme law of the land and as per Article 3 of the Constitution, sovereignty lies in the people and is inalienable. ... The rest of the definition after the word "and includes" ....
The first is whether the levy of octroi per se is an infringement of freedom of trade and commerce conferred by Art.301 and secondly, if it is an infringement of such freedom of trade and commerce, is the tax reasonable and required in public interest as required by Art.304 (b) of the Constitution. ... No provision of the Hyderabad District Municipalities Act was pointed out, which indicates that there was some departure from the earlier Act in so far as the definition of the word 'food' is concerned. .....
Importantly, Supreme Court in BSNL and Another Vs. Union of India and Others has found that splitting and dissecting of contract is permissible even pursuant to 46th amendment to Constitution only in Article 366 (29A) (b) and (f) of the Constitution. ... In this regard it may be relevant to refer to the judgement of Supreme Court in the case of Builders Association reported in a href="./.. ... By introducing separate categories of “deemed sales”, the meaning of the word#HL....
The Supreme court in Naresh v. ... The Supreme court in Gannon Drunkenly and Co. v. ... As pointed out supra, the supreme Court in the case of Gannon drunkenly and Co. v. ... become necessary for the court to declare by writ of mandamus that the Explanation to the definition of the word "person" and the Explanation No. l to the first Schedule of the Act as unconstitutional. ... The Court would be free to satisfy it....
It is also the main crux of the argument that in Karnataka Bank’s case, the Supreme Court has not considered whether the word ‘person’ which is defined in the General Clauses Act is referable to a branch of business entity. ... The Supreme Court also in Karnataka Bank’s case has not stated anything other than what was competent for the Andhra Pradesh Legislature to define the word ‘person’ in any manner they like within the State of Andhra Pradesh. ... As per the #HL_....
day, per individual. ... Applying the doctrine of pith and substance, as held by the Supreme Court, it has to be noticed with reference to the provisions of the Entertainments Tax Act, as a whole, that the State legislation provides for imposing tax on the entertainment/amusement, for which the entertainee is admitted. ... In the first case – Federation of Hotel & Restaurant (supra – the Apex Court was considering the challenge raised against the constitutional validity of the Expendi....
Subsequently, on 09.11.2006, the Regional Transport Officer issued a show cause notice demanding a sum of Rs.59,39,401/- towards registration fee, tax, arrears of tax along with 2 per cent interest and 25 per cent penalty with effect from the year 1999 when aforesaid vehicles/equipment were purchased ... It may be pertinent to note that Entry 57 of List II of the Seventh Schedule of the Constitution permits imposition of tax on vehicles suitable for use on roads. ... In the light of th....
However as has been held by a Division Bench of this Court on a reference by the Financial Commissioner in Standard Drugs Court. V/s. ... Prior to the enforcement of the Constitution on 26th of January, 1950, under clause (c) of subs (6) of S. 3 of the Punjab Excise Act "any medicinal or toilet preparations containing alcohol fell within the definition of "excisable articles" which were subject to the excise duty under the aforesaid Act ... Under the Constitution alcoholic preparation, which under the G....
The definition of “tax” in terms of Clause (28) of Article 366 of the Constitution is wide in nature. The said definition may be for the purpose of the Constitution; but it must be borne in mind that the legislative competence conferred upon the State Legislature or Parliament to impose “tax” or “fee” having been enumerated in different entries in the three lists contained in the Seventh Schedule of the Constitution of India, the same meaning of the expression “tax” unless the context otherwise requires should be assigned.
The definition of 'tax' in terms of clause (28) of Article 366 of the Constitution is wide in nature. The said definition may be for the purpose of the Constitution, but it must be borne in mind that the legislative competence conferred upon the State Legislature or Parliament to impose 'tax' or 'fee' having been enumerated in different entries in the three lists contained in the Seventh Schedule of the Constitution of India, the same meaning of the expression 'tax' unless the context otherwise requires, should be assigned.
The said definition may be for the purpose of the Constitution; but it must be borne in mind that the legislative competence conferred upon the State Legislature or Parliament to impose "tax" or "fee" having been enumerated in different entries in the three lists contained in the seventh Schedule of the Constitution of India, the same meaning of the expression "tax" unless the context otherwise requires should be assigned. The definition of "tax" in terms of Clause (28) of Article 366 of the constitution is wide in nature.
In AIR1971 SC 517 , [1971 ]81 ITR105 (SC ), (1970 )2 SCC467 , [1971 ]1 SCR844 (Bimal Chandra Banerjee v. State of Madhya Pradesh etc.) it has been held that no tax can be imposed by any bye-law or rule or regulation unless the statute, under which the subordinate legislation is made, specially authorises the imposition even if it is assumed that the power to tax can be delegated to the executive. Expression of "law" is given under Article 13 therein. Numerous decision of the Supreme Court and High courts expressed clear opinion that a tax within the tax under Article 265 of the Con....
The definition of `tax in terms of Clause (28) of Article 366 of the Constitution is wide in nature. The said definition may be for the purpose of the Constitution; but it must be borne in mind that the legislative competence conferred upon the State Legislature or the Parliament to impose `tax or `fee having been enumerated in different entries in the three lists contained in the Seventh Schedule of the Constitution of India, the same meaning of the expression "tax" unless the context otherwise requires, should be assigned.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
