Article 265 article is a cornerstone of India’s democratic and legal approach to taxation, ensuring that the power to tax is exercised responsibly and within the bounds of law.
This article clearly states that no person in India can be subjected to any tax without proper procedure.
Article 265 defines that “No tax shall be levied or collected except by authority of law.”
This concise yet powerful statement is fundamental to India’s taxation system.
Here’s what it means and why it’s important:
1. Legal Basis: All taxes in India must be backed by law. This means that the government cannot arbitrarily impose taxes without going through proper legislative procedures.
2. Protection Against Arbitrary Taxation: It safeguards citizens from unauthorized or arbitrary taxation by any government body or official.
3. Legislative Authority: Only the Parliament (for central taxes) and State Legislatures (for state taxes) have the power to introduce new taxes or modify existing ones.
4. Transparency: This article ensures transparency in the tax system, as all tax laws must be publicly enacted and accessible.
5. Constitutional Safeguard: It’s a key constitutional protection that upholds the principle of “no taxation without representation.”
6. Judicial Oversight: If a tax is levied without proper legal authority, it can be challenged in court based on this article.
7. Fiscal Discipline: It imposes discipline on the government’s fiscal policies, ensuring that taxation is a well-thought-out process rather than an arbitrary decision.
While Article 265 of the Indian Constitution is intended to protect citizens from arbitrary taxation, here are some potential areas of ambiguity :
1. Broad interpretation of “law”: The term “law” can be interpreted broadly, potentially allowing for taxes to be levied through various legal instruments, not just acts of Parliament or state legislatures.
2. Retrospective taxation: This means the government can impose a tax on your transactions or from the past. Some argue that retrospective amendments to tax laws, while technically legal, go against the spirit of Article 265.
3. Delegated legislation: Tax rules and regulations created by executive authorities under the power delegated by primary legislation may sometimes stretch the boundaries of “authority of law.”
4. Emergency provisions: During a state of emergency, the government’s powers expand, potentially affecting the strict application of Article 265.
5. Lack of specificity: The article doesn’t specify what constitutes a “tax,” leaving room for interpretation on certain levies or charges.
6. Indirect taxes: Some argue that indirect taxes, especially when buried in the price of goods or services, may not always be clearly “levied” in the spirit of transparent taxation.
7. Cess and surcharges: These additional charges are sometimes criticized as ways to increase tax revenue without formally introducing new taxes.
8. Constitutional amendments: The article itself can be amended through the constitutional amendment process, potentially altering its protective intent.
9. International agreements: Tax provisions in international treaties might sometimes be seen as circumventing the domestic legislative process.
10. Executive ordinances: In certain circumstances, taxes might be levied through ordinances, which, while temporary, can have immediate effect before parliamentary approval.
It’s important to note that these potential loopholes are often subject to judicial scrutiny and interpretation. The courts play a crucial role in ensuring that the spirit of Article 265 is maintained while allowing for necessary flexibility in governance.
-Sanyogita
