Constitution of India
Article 265: Taxes not to be imposed save by authority of law
Part XII — Finance, Property, Contracts and Suits (Chapter I — Finance: General)
Article 265 (no sub-divisions — single provision)
WHAT IT SAYS: No tax shall be levied or collected except by authority of law. WHAT IT MEANS: Both the imposition (levy) and the recovery (collection) of any tax must be backed by a valid statute enacted by a competent legislature — executive orders or administrative actions alone cannot create tax obligations. KEY DOCTRINE: Doctrine of Fiscal Legality — every valid tax must clearly specify: (1) the taxable event, (2) the person liable, (3) the rate of tax, and (4) the measure or value on which the rate is applied. Any vagueness or incompleteness in these components is fatal to the levy (Govind Saran Ganga Saran v. Commissioner of Sales Tax, 1985).
Constitutional Inspiration
SOURCE(S): 1. England / Magna Carta (1215) — Chapter 12: 'No scutage or aid is to be levied in our kingdom, save by the common counsel of our kingdom.' Original provision: King could not impose feudal taxes without consent of the Great Council. What India kept: The core principle that taxation requires legislative sanction, not executive fiat. 2. England / Bill of Rights (1689) — Article 4: Forbade levying of money for the Crown without consent of Parliament. Original provision: Parliament alone held the power to authorise taxation. What India kept: The mandate that only elected legislatures can impose or collect taxes. 3. Section 142-A / Government of India Act, 1935 — Contained similar fiscal safeguards for British India's federal structure. Original provision: Revenues could only be raised under statutory authority. What India kept: The statutory basis for taxation carried forward into the sovereign Constitution. INDIA'S SPECIFIC ADAPTATIONS: 1. Article 265 uses both 'levied' AND 'collected' — ensuring neither imposition nor recovery can occur without law, closing any loophole for premature collection. 2. The phrase 'authority of law' was interpreted by Indian courts to mean a law that must also satisfy Part III (Fundamental Rights) — unlike British parliamentary sovereignty, Indian tax laws must conform to constitutional limits. 3. No analogous provision existed in a single declaratory sentence in other constitutions — the framers crafted this as a standalone article for maximum clarity and enforceability.
Constituent Assembly Debate
DEBATED ON: 4 August 1949 (CAD Volume IX) KEY SPEAKERS: 1. Dr. B.R. Ambedkar (Chairman, Drafting Committee) — Proposed replacing Draft Article 248 (which defined 'revenues of India' and 'revenues of State') with an entirely new provision: 'No tax shall be levied or collected except by authority of law.' MAJOR DISAGREEMENTS: 1. None recorded — the motion was adopted without any debate. FINAL OUTCOME: Dr. Ambedkar's new text was adopted unanimously and without discussion on 4 August 1949. The original Draft Article 248 (revenue definitions) was renumbered as Draft Article 248-A. AMBEDKAR'S KEY QUOTE: No extended quote available — the provision was moved, seconded, and adopted without debate, reflecting unanimous consensus on the principle of no taxation without legislative authority.
Landmark Judgments
LANDMARK JUDGMENTS: 1. Kunnathat Thathunni Moopil Nair v. State of Kerala (1961) — Article 265 refers to a 'valid law'; a taxing statute must also satisfy Fundamental Rights under Part III, and Article 265 is NOT a shield against Part III scrutiny. 2. Corporation of Calcutta v. Liberty Cinema (1965) — Legislature must provide guidance when delegating power to fix tax rates; unbridled delegation to a subordinate body violates Article 265 read with Article 19(1)(g). 3. Govind Saran Ganga Saran v. Commissioner of Sales Tax (1985) — Laid down the four essential components of a valid tax: (i) taxable person, (ii) taxable event, (iii) rate of tax, (iv) measure of liability. Vagueness in any component is fatal. 4. Mafatlal Industries Ltd. v. Union of India (1997) — A 9-judge bench held that taxes collected without authority of law must be refunded under Article 265, but the doctrine of unjust enrichment applies — a person who has passed on the tax burden to consumers cannot claim refund. 5. State of West Bengal v. Kesoram Industries Ltd. (2004) — Clarified the distinction between taxes and fees and defined the legislative competence required for each under the Constitution. NOTABLE DISSENTS: 1. Justice Ahmadi (CJ) in Mafatlal Industries (1997) — Dissented on unjust enrichment; held that Article 265 mandates refund of tax collected without authority and equity cannot override this constitutional guarantee. SCHOLARS & JURISTS: 1. D.D. Basu — Described Article 265 as the Indian counterpart of 'no taxation without representation,' ensuring fiscal democracy and legislative supremacy over executive action in tax matters. 2. H.M. Seervai — Noted that Article 265 is declaratory and self-executing; it does not create a new right but constitutionally entrenches the pre-existing common law principle against arbitrary exaction.