ISSUE:
Whether Sections 4 and 11 of the Rajasthan Motor Vehicles Taxation Act, 1951 violate the freedom of trade, commerce, and association guaranteed under Article 301 of the Indian Constitution of 1949?
RULE:
Freedom of Trade and Commerce: The primary principle at stake is the freedom of trade, commerce, and intercourse throughout India as guaranteed by Article 301 of the Constitution. This provision establishes that trade should be free from restrictions unless justified under specific conditions.
Reasonable Restrictions: The court assessed if the taxation imposed by the Rajasthan Motor Vehicles Taxation Act was a reasonable restriction on the freedom of trade.
Direct vs. Indirect Restrictions: The distinction between direct and indirect restrictions on trade was discussed. The court determined that the tax imposed did not directly obstruct trade but instead had an indirect effect, which was deemed permissible under Article 301.
Public Interest Justification: The court applied the doctrine that laws affecting trade must serve a public interest purpose. In this case, the need for road maintenance and development justified the imposition of taxes on transport vehicles.
Purposive Interpretation: The interpretation of Articles 301 to 304 was significant in this case, particularly regarding how these articles interact with each other concerning state powers to regulate trade and commerce.