Constitution of India
Article 307: Appointment of authority for carrying out the purposes of articles 301 to 304
Part XIII — Trade, Commerce and Intercourse within the Territory of India
Article 307 (no sub-divisions)
WHAT IT SAYS: Parliament may by law appoint such authority as it considers appropriate for carrying out the purposes of Articles 301, 302, 303 and 304, and confer on that authority such powers and duties as it thinks necessary. WHAT IT MEANS: 1. Parliament has DISCRETIONARY (not mandatory) power to create an authority — like a commission or tribunal. 2. The authority would oversee enforcement of free trade, commerce and intercourse provisions. 3. Parliament alone decides the nature, powers and duties of such authority. 4. No such authority has been created to date (as of 2025) — making this an 'unused' enabling provision. 5. In absence of this authority, the judiciary has shouldered the burden of resolving inter-state trade disputes. KEY DOCTRINE: No specific named doctrine arises from Article 307 itself, but it is closely linked to the Compensatory Tax Doctrine (Automobile Transport case, 1962) and the Doctrine of Res Extra Commercium (R.M.D. Chamarbaugwala case, 1957) developed under Articles 301–304 that Article 307 is meant to enforce.
Constitutional Inspiration
SOURCE(S): 1. Australian Constitution — Section 92 (freedom of inter-state trade) and Section 101 (Inter-State Commission) Original provision: Section 101 mandates 'There shall be an Inter-State Commission' with adjudication and administration powers as Parliament deems necessary for trade and commerce provisions. What India kept: Adopted the concept of a parliamentary-appointed authority for trade oversight, but made it permissive ('may') rather than mandatory ('shall'). 2. US Interstate Commerce Commission (indirect influence) Original provision: Established in 1887 as a federal regulatory body to oversee railroad and surface transportation. What India kept: The idea of a specialised trade regulation body, though India chose constitutional empowerment rather than statutory creation. INDIA'S SPECIFIC ADAPTATIONS: 1. Permissive, not mandatory — Unlike Australia's 'shall', India used 'may' — giving Parliament flexibility because the framers were uncertain whether India immediately needed such a body. 2. Broader scope — Authority covers Articles 301-304 (free trade, parliamentary restrictions, anti-discrimination, state restrictions) — wider than Australia's trade-only focus. 3. No structural details prescribed — Unlike Australian Sections 102-104 which detail the Commission's composition, Article 307 leaves all structural decisions to future legislation, maximising adaptability. 4. Post-independence economic fragmentation — India's 500+ princely states and varying provincial trade barriers necessitated a provision for economic unification oversight.
Constituent Assembly Debate
DEBATED ON: 8 September 1949 (CAD Volume IX) DRAFT ARTICLE: 274E (became Article 307 in the final Constitution) NOTE: Draft Article 274E was NOT in the original Draft Constitution of 1948. It was introduced by the Drafting Committee Chairman on 8 September 1949 as part of the new Part XA. KEY SPEAKERS: 1. Dr. B.R. Ambedkar (Drafting Committee Chairman) — Introduced Draft Article 274E as part of a comprehensive framework for trade and commerce; argued that articles on trade freedom scattered across the Draft Constitution needed consolidation under Part XA with an enforcement authority. 2. T.T. Krishnamachari (Madras) — Strongly supported the Drafting Committee's trade provisions, calling them 'about as nearly perfect as human ingenuity could possibly make them'; defended the need for state power to manage scarcity of essential commodities. 3. Pandit Thakur Das Bhargava (East Punjab) — Moved amendments including proposing deletion of Article 274E; argued trade freedom should remain a Fundamental Right under Article 16 (now Art. 19) enforceable via Article 25 (now Art. 32) through the Supreme Court. 4. Prof. Shibban Lal Saksena — Supported Bhargava's position; proposed that citizens should have the right to move the Supreme Court for enforcement of trade rights under Part XA. MAJOR DISAGREEMENTS: 1. Delete 274E entirely — One member argued the provision was unnecessary and should be deleted, as trade freedom should be judicially enforceable, not dependent on an executive authority. 2. Supreme Court access — Pandit Bhargava proposed adding Article 274F after 274E: 'Any citizen shall have the right to move the Supreme Court for enforcement of rights conferred by Article 13 or Part XA.' This was not adopted. 3. Trade freedom as Fundamental Right — Several members opposed moving trade freedom from Fundamental Rights (Draft Art. 16) to Part XA, fearing loss of Article 25 (writ) remedies. FINAL OUTCOME: Draft Article 274E was adopted as moved by Ambedkar; proposals to delete it or add Supreme Court enforcement provisions were rejected. AMBEDKAR'S KEY QUOTE: 'If freedom of trade and commerce within the country is not ensured, political unity will be rendered hollow.'
Landmark Judgments
LANDMARK JUDGMENTS: 1. Atiabari Tea Co. Ltd. v. State of Assam (1961) — Taxes directly impeding free trade violate Art. 301 unless saved by Arts. 302-304; Court noted no authority had been appointed under Art. 307 by Parliament. 2. Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan (1962) — Compensatory/regulatory taxes facilitating trade do NOT violate Art. 301; established the Compensatory Tax Doctrine; noted Art. 307 remains an enabling but unused provision. 3. State of Bombay v. R.M.D. Chamarbaugwala (1957) — Gambling is 'res extra commercium' (outside commerce) and is not protected trade under Art. 301; narrowed the scope of activities Part XIII protects. 4. G.K. Krishnan v. State of Tamil Nadu (1975) — Freedom under Art. 301 does not mean freedom from all regulation; distinguished regulatory measures from restrictive measures. 5. Jindal Stainless Ltd. v. State of Haryana (2016) — Nine-judge Constitution Bench rejected the compensatory tax doctrine; held non-discriminatory entry taxes are permissible and do not violate Art. 301; authoritatively re-interpreted Arts. 301-307. NOTABLE DISSENTS (if any): 1. Minority view in Atiabari Tea Co. (1961) — Held that not all taxes amount to restrictions on trade; the majority's broad interpretation of Art. 301 was considered too sweeping. SCHOLARS & JURISTS: 1. D.D. Basu — Described Art. 307 as an institutional safeguard for economic unity, modelled on Australia's Inter-State Commission but deliberately kept flexible. 2. M.P. Jain — Noted Art. 307 remains a 'dead letter' provision; Parliament's failure to create the envisaged authority has shifted all trade dispute resolution to the judiciary. 3. Sarkaria Commission — Recommended that Parliament consider activating Art. 307 to establish an authority for better federal coordination on inter-state trade matters.