Introduction 

From a long time ago, the Constituent Assembly was keen to ensure Freedom of Trade, commerce and Intercourse. 

• Part XIII of the Constitution of India, 1950 (COI) states the Articles based on Freedom of Trade, Commerce and Intercourse within the territory of India. 
• Article 301 of the Indian Constitution specifically states about the Freedom of Trade, Commerce and Intercourse. 

What is Freedom of Trade, Commerce and Intercourse? 

• Article 301 of the Constitution states freedom of trade, commerce and intercourse as subject to the other provisions of this Part, trade, commer ce and intercourse throughout the territory of India shall be free. 
• It means that there shall be no restraint on the trade. 
• It also means that there shall be free movement and exchange of goods. 
• As per Article 301, there shall be free movement of goods from one part to the other part of the country. 

What is the Object of Article 301 of the Constitution? 

• The article was set in tone to remove the trade barriers between the states. 
• It encouraged the unity of trade between the states. 
• The main objective is to create and preserve a national economic fabric. 

What is the Doctrine of “Res Extra Commercium”? 

• This doctrine is provided under Article 301 of the COI and means that activities which cannot be regarded as lawful trade and commerce or business. 
• In the case of Fateh chand v. State of Maharashtra (1977) it was held by the Supreme Court that the systematic act of money lending in rural areas was covered under trade. 
  • It was further added by the court that the same activity is conducted by unscrupulous persons is in against of the Directive Principles of State Policy as it exploits the weaker section of society. 
• The activities conducted by the state to prevent the exploitation of the weaker society and help in raising the standard of living of the people shall be regarded as trade or business. 

What is the Scope of Article 301 of the Constitution? 

• Article 301 of the constitution has been adopted from Article 92 of the Australian Constitution. 
• Referring to Article 92 of the Australian constitution, the Indian Constitution has made the trade, commerce free throughout the territory of India as well as Inter and Intra State too. 
• Article 301 of the Constitution also puts a general restriction on the legislative powers of the State and the Union. 

What are Direct & Immediate Restrictions? 

• Any law which directly and immediately impedes or restricts the free flow or movement of trade would infringe the guarantee in Article 301 with certain exception of taxing laws. 

What are Regulatory Measures and Compensatory Taxes? 

• As per Article 301 of the COI measures which impose compensatory taxes, or are purely regulatory, do not come within the purview of 'restrictions.' 
• It can be said that a state law imposing a tax, per vehicle, on the owners of motor vehicles does not directly affect the freedom of trade or commerce even though it indirectly imposes a burden on the movement of passengers and goods within the territory of the taxing State. 

What are the Reasonable Restrictions on Freedom of Trade, commerce and Intercourse? 

• Parliamentary Law may impose restrictions on Trade and Commerce when required in the public interest (Article 302). 
• Restrictions for meeting scarcity of goods (Article 303). 
• State Law to regulate trade and commerce (Article 304). 
• Existing laws are saved from the purview of Article 301 (Article 305). 

Landmark Judgements 

• A.K. Gopalan v. State of Madras (1950): 
  • The Supreme Court held that in federation it is necessary to minimize the inter-state barriers as much as possible so as to inculcate in the minds of the people the feeling of unity. 
• Atiabari Tea Co. v. State of Assam (1961): 
  • The Supreme Court held that there should be free flow of trade throughout the nation in order to ensure national progress. 
  • The Supreme Court further held that the tax imposed on goods directly restricted the transport is in violation of Article 301 of the Constitution. 
• State of Bombay v. RM.D. Chamarbaughwala (1957): 
  • The Supreme Court in this case held that Lottery is gambling and there is no skill required for the same and it does not falls within the scope of trade and commerce. 
• Automobile Transport Ltd. V. State of Rajasthan (1958): 
  • It was held in this case that any kind of restriction on trade and commerce would be in violation of Article 301 of the Constitution. 
  • The Court laid down certain principles under this case as: 
    • A measure which operates on trade, commerce and intercourse would not be in violation of Article 301 of the Constitution. 
    • A measure which operates on trade, commerce and intercourse directly and immediately may be violated under Article 301 of the Constitution. 
    • A measure which operates on trade directly and immediately may not be violative of Article 301 of the Constitution except if it is provided for regulator or for imposing taxes. 

Conclusion 

Article 302 to Article 305 of the constitution puts reasonable restrictions on freedom of Trade and Commerce and Intercourse as this right is not an absolute right. With the introduction of Article 301 there shall be no interference with the trade across the country and it will help to unite the nation as one free from all the barriers of territory.