polity hard Fill in the Blank

In Atiabari Tea Co. case (1961) and Automobile Transport case (1962), the Supreme Court held that Article 301's freedom of trade is subject to regulatory measures that are ______ and not compensatory taxes that are discriminatory.

  1. protectionist
  2. reasonable and in public interest
  3. arbitrary
  4. State-specific

Answer: reasonable and in public interest

Article 301 jurisprudence: (a) Atiabari Tea Co. (1961): Freedom of trade under Article 301 not absolute; subject to regulatory measures (e.g., licensing, safety standards) that are reasonable and in public interest, but not to compensatory taxes that directly impede trade, (b) Automobile Transport (1962): Clarified compensatory taxes (fees for facilities like roads) permissible if non-discriminatory and proportionate to benefits provided, (c) Subsequent cases: Balance between free flow of goods (national economic integration) and State regulatory powers (public health, environment, revenue), (d) GST impact: Subsumed multiple State/Union taxes, reducing barriers to inter-State trade; Council mechanism resolves rate/regulation disputes. Illustrates judicial role in calibrating economic federalism: enabling national market while respecting legitimate State interests.

Topic Federalism - Article 301 Judicial Interpretation
Exam Relevance Economic federalism judicial interpretation case study critical for UPSC Mains and Judiciary exams
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