Constitution and Taxes pt 2

Question 1

Discriminatory Taxes

Answer 1

Any tax that discriminates against a particular state, region or class of traders is considered discriminatory and violative of Article 301. Any tax that restricts movement of goods or burdens inter state trade would be violative of ARticle 301. Unless it falls within scope of permissible scope under Article 304.

Question 2

Video Electronics Pvt. Ltd. v. State of Punjab

Answer 2

Discriminatory taxes discriminate between similarly placed persons or things without any reasonable basis. They violate the principle of equality under Article 14.
The burden of proving that the tax is discriminatory is with the person challenging the tax. The discrimination is hostile unless there is a justifiable and rational reason for it.

Question 3

Shree Mahavir Oil Mills v. State of J&K

Answer 3

A tax which discriminates against a particular class or persons or between goods or persons of the same class is violative of Article 14.
The court stated that such discriminatory taxation could not be upheld even if the intention behind such taxation was to promote some other legitimate objective; (as long as there is no intelligible differentia and did not have rational nexus)