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GRAMMARLY REPORT: -

ACKNOWLEDGEMENT

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ABSTRACT
The freedom of trade and profession has been favored by the common law of England from the
earliest times on grounds of public policy. It was expressed by Alderson, B., in the judgment of
the Exchequer Chamber in Hilton Vs Eckersley case as "prima facie, it is the privilege of a trader,
in a free country to regulate his own mode of carrying his trade on, accordance to his own
discretion and choice. If law has in any manner regulated or restrained his mode of doing this,
the law must be obeyed. But no power can restrain his discretion of trade and profession of his
choice of trade and profession are under the lawful limits.

When it comes to the case of India the above said principles are also followed in India because
we follow Common Law and our law is mostly based upon the principles of English law. Article
19 of Indian Constitution provides Right to Freedom and sub-clause (g) of article 19 provides
Right to carry on occupation, trade, or business. But this right is subject to the restrictions
provided in article 19(6) of Indian constitution as no right is an absolute right i.e. Right to
freedom to carry on occupation, trade and profession is given in article 19(1)(g) and restrictions
are provided in 19(6). But this right does not confer the right to do anything exceeding limit of
restrictions for example: consider illegal trade in eyes of law or intention to hold a particular job
or to occupy a particular post of choice of any particular person.

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CONTENTS
1. GRAMMARLY REPORT.......................................................................1
2. ACKNOWLEDGEMENT...1
3. ABSTRACT....2
4. OBJECTIVES AND AIMS OF STUDY.4
5. SIGNIFICANCE AND BENEFITS OF STUDY....4
6. CASE SUMMARY.5
7. SCOPE OF THE STUDY..14
8. REVIEW OF LITERATURE....14
9. RESEARCH METHODOLOGY.......17
10.HYPOTHESIS...18
11.FREEDOM OF TRADE AND PROFESSION..18
11.1.1 TRADE...19
11.1.2 BUSINESS.19
11.1.3 PROFESSION20
11.2 CONSTITUTIONAL PROVISIONS..20
11.3 SCOPE OF ARTICLES 301 TO 304.21
12. OUTCOMES OF THE PROJECT23
13. SUGGESTIONS AND CONCLUSIONS.23
14. BIBLIOGRAPHY25

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OBJECTIVES AND AIMS OF STUDY

The objectives and aims of this study are to: -

To critically analyze the right to freedom of trade and commerce.


To study the various legislations related to right to freedom of trade and commerce.
To study the practical implication of right to freedom of trade and commerce.
To study the exceptions of right to freedom of trade and commerce.

SIGNIFICANCE AND BENEFIT OF STUDY


The significance of this study is that we can critically analyze the right to freedom of trade and
commerce. By which we get the benefit to understand the right to freedom of trade and
commerce with its practical aspects. Through the study of right to freedom of trade and
commerce with various leading case laws in India we can know the practical aspect of right to
freedom of trade and commerce with its implications and exceptions.

CASE SUMMARY

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State Of Bombay Vs. R.M.D. Chamarbaugwalia And Ors. MANU/SC/0019/1957

INTRODUCTION:-

QUORUM:-

SUDHI RANJAN DAS, C.J., {UNANIMOUS}

P.B. GAJENDRAGADKAR,

B.P. SINHA,

S.K. DAS

T.L. VENKATARAMA AIYYAR, JJ.

COUNCIL:-

Appellant: H.M. Seervai, Adv. and M.P. Amin, Adv. General

Respondents: M.L. Manekshaw and N.A. Palkhiwala, Advs.

STATUTES REFERRED:-

The Constitution of India - Article 19(1)(g), 19(6), 132(1), 133(1), 226, 246, 245, 255,
276, 276(2), 301, 302, 303, 304(b), 305.

The Bombay Prize Competitions Tax Act of 1939 - section 2(2), 2(2)(a), 2(2)(b), 2(2)(c)

The Bombay Lotteries and Prize Competition Control and Tax Act 1948 - section

The Bombay Lotteries and Prize Competition Control and Tax Act 1952 section 2(1)(d),
2(1)(dd), 3, 4, 5, 6, 7, 8, 9, 10, 11, 12(2), 12(A), 15, 31

The Bombay Lotteries and Prize Competition Control and Tax Rules - 1952

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Mysore Lotteries and Prize Competition Control and Tax Act 1951

The Government of India Act 1935 - section 99, 100, 142A(2)

Specific relief Act - 45

The Banking Act 1947

Bengal Gambling Act 1897

The Indian Penal Code 1860 - section 294(A)

The Contract Act 1872 - section 30

The Marine Insurance Act 1745

CASE OVERRULED:-

State of Bombay v R.M.D. Chamarbaugwalia and Ors., MANU/MH/0060/1956

CASES REFERREDD:-

1. Coles v. Odhams Press Ltd. L.R. (1936) 1 K.B. 416

2. Elderton v. Totalisator Co. Ltd. [1945] 2 A.E.R. 624

3. Hindu Women's Right to Property Act case (1941) F.C.R. 12

4. Toronto v. Lambe L.R. (1887) 12 A.C. 575

5. Clyffe in Rex v. Caledonian Collieries Ltd. L.R. (1928) A.C. 358

6. James v. Commonwealth of Australia L.R. (1936) A.C. 578

7. Commonwealth of Australia v. Bank of New South Wales L.R. (1950) A.C. 235

8. James v. Commonwealth of Australia L.R. (1936) A.C. 578

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9. Willard v. Rawson (1933) 48 C.L.R. 316

10. R. v. Vizzard (1933) 50 C.L.R. 30

11. O. Gilpin Ltd. v. Commissioner of Road Transport and Tramways (1935) 52 C.L.R. 189

12. Tasmania v. Victoria (1935) 52 C.L.R. 157

13. The King v. Connare (1939) 51 C.L.R. 596

14. The King v. Martin (1939) 62 C.L.R. 457

15. James v. Cowan L.R. (1932) A.C. 542

16. Australian National Airways Proprietary Ltd. v. The Commonwealth (1945) 71 C.L.R.
29

17. Mansell v. Beck Australian Law Journal, Vol. 30. No. 7 p. 346

18. Champion v. Ames [1903] 188 U.S. 321

19. Hipolite Egg Co. v. United States [1911] 220 U.S. 45

20. Hoke v. United States [1913] 227 U.S. 308

21. United States v. Kahriger [1953] 345 U.S. 22

22. Lewis v. United States [1955] 348 U.S. 419

23. P. P. Kutti Keya v. The State of Madras MANU/TN/0304/1954

24. Ramloll v. Soojumnull (1848) 4 M.I.A. 339

25. Supreme Court of America in Phalen v. Virginia [[1850] 49 U.S. 163; 12 L. Ed. 1030,
1033

26. Douglas v. Kentucky [1897] 168 U.S. 488; 42 L. Ed. 553, 555

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27. Phalen v. Virginia [1850] 49 U.S. 163

28. United States v. Kahrigar 345 U.S. 22; 97 L. Ed. 754

29. Mann v. Nash (1932) 1 K.B.D. 752

30. F. A. Lindsay, A. E. Woodward and W. Hiscox v. The Commissioners of Inland


Revenue 18 T.C. 43

31. Southern H. M. Inspector of Taxes v. A. B. (1933) 1 K.B. 713

INTRODUCTION TO CASE:-

The first petitioner is a sports event conductor who used to conduct Littlewood's Football Pool
Competitions in India who eventually lived in Bombay and paid competition tax for conducting
various events and after Bombay Government denying extending the tenure of license period
meanwhile during the delay in renewal of license the first petitioner has shifted his activities to
the State of Mysore and got incorporated as a company called RMDC Ltd. Which were the
second petitioners company and first petitioner was a promoter of this company. The second also
was running a sports magazine and published crossword puzzles in his magazine. After some
consecutive days Bombay government has laid taxes on gambling and lotteries and it also
applied to the second petitioner as the winner of crossword puzzles would be decided by lottery
system with the 5% profit he gets it was impossible for him to pay the taxes and getting into loss
so it was case first decided in Bombay trail court then High court and appealed to Supreme
Court.

FACTS OF CASE:-

1. This is an appeal by the State of Bombay from the judgment and order passed on January 12,
1955, by the Court of Appeal of the High Court of Judicature of Bombay confirming, though on
somewhat different grounds, the judgment and order passed on April 22, 1954, by a single Judge
of the said High Court allowing with costs the present respondents' petition under Art. 226 of the
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Constitution of India. The said petition was presented before the High Court of Judicature at
Bombay on December 18, 1952.

In the said petition there were two petitioners who are now the two respondents to this appeal.
The first petitioner is an individual who claims to be a citizen of India and the founder and
Managing Director of the second petitioner, which is a company incorporated in the State of
Mysore and having its registered head office at 2, Residency Road, Bangalore in that State. That
petition was further supported by an affidavit sworn by the first petitioner on the same day.

2. The allegations appearing in the said petition and affidavit may now be shortly stated. In July,
1946 the first petitioner applied for and obtained from the then Collector of Bombay a licence,
being Licence No. 84 of 1946, for the period ending March 31, 1947, to conduct what was
known as the Littlewood's Football Pool Competitions in India. That licence was granted to the
first petitioner under the provisions of the Bombay Prize Competitions Tax Act, (Bom. XI of
1939) (hereinafter referred to as the 1939 Act), which was then in force.

3. In the meantime, in view of the delay and difficulty in obtaining a renewal of the licence in
Bombay, the first petitioner in or about August, 1948, shifted his activities from Bombay to the
State of Mysore, where he promoted and on February 26, 1949, got incorporated a company
under the name of R.M.D.C. (Mysore) Limited, which was the second petitioner in the High
Court and is the second respondent before us.

The first petitioner, who was the promoter of the second petitioner became the Managing
Director of the second petitioner. All the shareholders and Directors of the second petitioner are
said to be nationals and citizens of India. The second petitioner also owns and runs a weekly
newspaper called "Sporting Star", which was and is still printed and published at Bangalore in a
Press also owned by the second petitioner.

4. The 1939 Act was replaced by the Bombay Lotteries and Prize Competition Control and Tax
Act (Bom. LIV of 1948), (hereinafter referred to as the 1948 Act) which came into force on
December 1, 1948. The 1939 Act as well as the 1948 Act, as originally enacted, did not apply to
prize competitions contained in a newspaper printed and published outside the Province of

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Bombay. So the Prize Competition called the R.M.D.C. Crosswords was not affected by either of
those two Acts.

5. On June 21, 1951, the State of Mysore, however, enacted the Mysore Lotteries and Prize
Competition Control and Tax Act, 1951, which was based upon the lines of the said 1948 Act.

That Mysore Act having come into force on February 1, 1952, the second petitioner applied for
and obtained a licence under that Act and paid the requisite licence fees and also paid and is still
paying to the State of Mysore the tax at the rate of 15% (latterly reduced to 12 1/2%) of the gross
receipts in respect of the R.M.D.C. Crosswords Prize Competition and continued and is still
continuing the said Prize Competition through the said weekly newspaper "The Sporting Star"
and to receive entry forms with fees from all parts of the territory of India including the State of
Bombay.

It is said, on the strength of the audited books of account, that after distribution of prizes to the
extent of about 33% of the receipts and after payment of taxes in Mysore amounting to about
15% and meeting the other expenses aggregating to about 47%, the net profit of the second
petitioner works out to about 5% only.

6. On November 20, 1952, the State of Bombay passed The Bombay Lotteries and Prize
Competitions Control and Tax (Amendment) Act (Bom. XXX of 1952). This Act amended the
provisions of the 1948 Act in several particulars. Thus, the words "but does not include a prize
competition contained in a newspaper printed and published outside the Province of Bombay",
which occurred in the definition of Prize Competition in s. 2(1)(d) of the 1948 Act, were deleted
and the effect of this deletion was that the scope and the application of the 1948 Act so amended
became enlarged and extended so as to cover prize competitions contained in newspapers printed
and published outside the State of Bombay.

ARGUMENTS:-

APPELLANT:-

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The State of Bombay, which is now the appellant before us, on the other hand, maintained that
(a) The prize competitions conducted by the petitioners were a lottery.

(b) The provisions of the impugned Act were valid and competent legislation under Entries 33,
34 and 62 of the State List.

(c) The impugned Act was not extra-territorial in its operation.

(d) The prize competitions conducted by the petitioners were opposed to public policy and there
could therefore be no trade or business of promoting such prize competitions.

(e) As the petitioners were not carrying on a trade or business, no question of offending their
fundamental rights under Art. 19(1)(g) or of a violation of Art. 301 of the Constitution could
arise.

(f) The second petitioner being a Corporation was not a citizen and could not claim to be entitled
to the fundamental right under Art. 19(1)(g) of the Constitution.

(g) In any event the restrictions on the alleged trade or business of the petitioners imposed by the
Act were reasonable restrictions in the public interest within the meaning of Art. 19(6) and Art.
304(b) of the Constitution.

RESPONDENT:-

The impugned Act and particularly its taxing provisions were beyond the competence of the
State Legislature and invalid inasmuch as they were not legislation with respect to betting and
gambling under Entry 34 or with respect to entertainments and amusements under Entry 33 or
with respect to taxation on entertainments and amusements, betting and gambling under Entry 62
of the State List. The legislation was with respect to trade and commerce and the tax levied by
the impugned Act was a tax on the trade or calling of conducting prize competitions and fell
within Entry 60 of the State List.

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(b) The respondents' prize competition was not a lottery and could not be regarded as gambling
inasmuch as it was a competition in which skill, knowledge and judgment had real and effective
play.

(c) The impugned Act itself contained distinct provisions in respect of prize competitions and
lotteries thereby recognising that prize competitions were not lotteries.

(d) The said tax being in substance and fact a tax on the trade or business of carrying on prize
competitions it offended against s. 142A(2) of the Government of India Act, 1935 and Art.
276(2) of the Constitution which respectively provide that such a tax shall not exceed fifty
rupees and two hundred and fifty rupees per annum.

(e) The impugned Act was beyond the legislative competence of the Bombay Legislature and
invalid as it was legislation with respect to trade and commerce not within but outside the State.

(f) The impugned Act operated extra-territorially inasmuch as it affected the trade or business of
conducting prize competitions outside the State and was, therefore, beyond the competence of
the State Legislature and invalid.

(g) The impugned Act offended against Art. 301 of the Constitution inasmuch as it imposed
restrictions on trade, commerce, and intercourse between the States and was not saved by Art.
304(b) of the Constitution.

(h) The restrictions imposed by the impugned Act on the trade on business of the petitioners were
not reasonable restrictions in the interests of the general public and, therefore, contravened the
fundamental right of the petitioners, who were citizens of India, to carry on their trade or
business under Art. 19(1)(g) of the Constitution.

(i) That Sections 10, 12 and 12A of the said Act offended against Art. 14 of the Constitution
inasmuch as they empowered discrimination between prize competitions contained in
newspapers or publications printed and published within the State and those printed and
published outside the State.

RATIO DECIDENDI:-
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In our judgment the standing invitations, the filling up of the forms and the payment of money
take place within the State which is seeking to tax only the amount received by the petitioners
from the State of Bombay. The tax is on gambling although it is collected from the promoters.
All these, we think, constitute sufficient territorial nexus which entitles the State of Bombay to
impose a tax on the gambling that takes place within its boundaries and the law cannot be struck
down on the ground of extra territoriality.

"In my opinion such a proposition cannot be supported in principle or by reference to authority.


For it is obvious that the appellant's argument also involves the assertion of the constitutional
right of a citizen, so long as he can rely upon, or if necessary artificially create, some inter-State
connection in his business, to sell indecent and obscene publications, diseased cattle, impure
foods, unbranded poisons, unstamped silver, ungraded fruit and so forth."

We find it difficult to accept the contention that those activities which encourage a spirit of
reckless propensity for making easy gain by lot or chance, which lead to the loss of the hard
earned money of the undiscerning and improvident common man and thereby lower his standard
of living and drive him into a chronic state of indebtedness and eventually disrupt the peace and
happiness of his humble home could possibly have been intended by our Constitution makers to
be raised to the status of trade, commerce or intercourse and to be made the subject-matter of a
fundamental right guaranteed by Art. 19(1)(g).

We are, however, clearly of opinion that whatever else may or may not be regarded as falling
within the meaning of these words, gambling cannot certainly be taken as one of them. We are
convinced and satisfied that the real purpose of Arts. 19(1)(g) and 301 could not possibly have
been to guarantee or declare the freedom of gambling. Gambling activities from their very nature
and in essence are extra-commercial although the external forms, formalities and instruments of
trade may be employed and they are not protected either by Art. 19(1)(g) or Art. 301 of our
Constitution.

In our opinion, therefore, the impugned Act deals with gambling which is not trade, commerce or
business and, therefore, the validity of the Act has not to be decided by the yardstick of

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reasonableness and public interest laid down in Arts. 19(6) and 304. The appeal against the
stringency and harshness, if any, of the law does not lie to a court of law.

OBITER DICTA:-

One cannot but be struck by the sweeping generality of language used in the section. Such a wide
enunciation of the freedom of inter-State trade, commerce, and intercourse was bound to lead to
difficulties. The full import and true meaning of the general words had to be considered, as years
went past, in relation to the vicissitudes of altering facts and circumstances which from time to
time emerged. We have no doubt that there are certain activities which can under no
circumstance be regarded as trade or business or commerce although the usual forms and
instruments are employed therein. To exclude those activities from the meaning of those words is
not to cut down their meaning at all but to say only that they are not within the true meaning of
those words. Learned counsel has to concede that there can be no "trade" or "business' in crime
but submits that this principle should not be extended and that in any event there is no reason to
hold that gambling does not fall within the words "trade" or "business" or "commerce" as used in
the Articles under consideration.

In the view we have taken, it is not necessary for us to consider or express any opinion on this
occasion as to the vexed question whether restriction, as contemplated in Arts. 19(6) and 304(b),
may extend to total prohibition and this is so because we cannot persuade ourselves to hold that
Art. 19(1)(g) or Art. 301 comprise all activities undertaken with a view to profit as "trade" within
the meaning of those Articles. Nor is it necessary for us on this occasion to consider whether a
company is a citizen within the meaning of Art. 19 and indeed the point has not been argued
before us.

DECISION:-

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As per the reasons and observations of the Hon'ble Supreme Court bench The contentions of
state of Bombay were maintained and upheld in the judgment and have stated that the impugned
law was with respect of gambling and betting the impugned tax section was also with respect to
gambling and betting and as winner was elected through lottery. It was held that the R.M.D.
Chamarbaugwalia was liable to pay the tax with respect to the act and rules stated by
Government. Hence, the order of the lower court was dismissed

Appeal was allowed.

SCOPE OF THE STUDY


The scope of this study is limited only to extensive research and critical analysis on article 19(1)
(g) of Indian Constitution with related case laws. Because every right is not a absolute right and
has its own exception we will study the exceptions of right to freedom of trade and commerce
also with various legislations relating to it and with leading case laws.

REVIEW OF LITERATURE
FREEDOM OF TRADE. 5 Commw. L. Rev. 241 1907-1908
The author in this article has discussed the concept of freedom of trade in English law with a
case law Hilton vs Eckersley. While stating that right to freedom of trade is a public policy
matter, and state should not interfere with the public policy matter. He also states that trade
depends upon the skill and talent of a particular individual so imposing strict rules on trade
would infringe the fundamental right of trade of a citizen

THE FREEDOM OF TRADE AND COMMERCE IN THE INDIAN


CONSTITUTION 1963 Cambridge L.J. 54 1963

The author in this article states Now that the Supreme Court of India has reconsidered its earlier
judgnent in Atiabari Tea Co., Ltd. v. The State of Assam in Automobile Transport, Ltd. v. State
of Rajasthan it would not be inappropriate to attempt a brief critical and analytical account of

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the two judgments and of the problem of the freedom of trade, commerce and intercourse within
the territory of India with which they deal

THE CONCEPT OF FREEDOM IN INTERSTATE TRADE 5 U. Queensland L.J.


317 1965-1967

The author in this article states that the purpose of this article to draw a comparison between
the interpretation of the constitutional guarantee of freedom of inter-State trade in the United
States and in Australia in order to see whether there is only a formal difference in constitutional
arrangement or whether the distinction between them is a real one in approach and emphasis. It
is proposed, therefore, to deal with the American position in the first part of this article and to
discuss the Australian position in the latter part.

RECLAIMING THE FREEDOM TO TRADE 8 Rev. Const. Stud. 42 2003

The author examines the judgments in Marshall, and the right of the Mikmaq to harvest natural
commodities and trade them commercially. He suggests that these rights can be traced to
Aboriginal title, rather than in the Treat you before the Court. The author sets out some principles
that might provide a basis for a legal resolution of these issues, and concludes that we must begin
by recognizing that society has an interest in acknowledging the legal validity of Aboriginal title.

FREEDOM OF INTERSTATE TRADE 6 Melb. U. L. Rev. 237 1967-1968

Author in this article discusses that the justification for yet another section 92 of the Constitution
is that students, and possibly others, may find useful a straight forward account of the main line
of development in its interpretation. The aim of this article is to give such an account, free from
the mass of detail and case-law which attends the application to particular areas of legislation of
the general principles which have been established.

Ashoka Kumar Thakur Vs. Union of India (UOI) and Ors. MANU/SC/1397/2008

The case was filed for reservation for admission in educational institutions or for public
employment has been a matter of challenge in various litigations in this Court as well as in the
High Courts. Diverse opinions have been expressed in regard to the need for reservation. Though
several grounds have been raised to oppose any form of reservation, few in independent India

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have voiced disagreement with the proposition that the disadvantaged sections of the population
deserve and need "special help." But there has been considerable disagreement as to which
category of disadvantaged sections deserves such help, about the form this help ought to take and
about the efficacy and propriety of what the government has done in this regard.

Bishambhar Dayal Chandra Mohan and Ors. Vs. State of Uttar Pradesh and Ors.
MANU/SC/0056/1981

The issue in this petition is Article 32 of the Constitution is of far-reaching significance. It raises
questions of the highest importance as to the scope and extent of the executive power of the State
under Article 162 of the Constitution, in relation to regulation and control of trade and commerce
in foodstuffs. It necessarily involves a claim by the petitioners who are wholesale dealers of food
grains that the exercise of such governmental power conflicts with the rule of law and is in
flagrant violation of the freedom of trade, commerce and intercourse guaranteed under Article
301 of the Constitution and the fundamental right to carry on trade and business guaranteed
under Article 19(1)(g) of the Constitution.

Khoday Distilleries Ltd. and Ors. Vs. State of Karnataka and Ors.
MANU/SC/0572/1995

In this case it appears that some of the parties affected by the decision of the Andhra Pradesh
High Court upholding the validity of the enactments and rejecting the argument that the
petitioners have a fundamental right to carry on trade in liquor, filed writ petitions in the High
Court for a declaration that though the validity of the enactments had been upheld by the High
Court the A.P. 1993 Act deals only with the taking over of trade but not business in liquor and,
therefore, the State had no right to prevent the writ petitioners from carrying on with the business
of liquor during the validity of their licenses. The argument was that "trade" is different from
"business."

Precious Carrying Corporation and Anr. Vs. State of Gujarat and Ors.
MANU/GJ/0182/2002

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The Precious Carrying Corporation Pvt. Ltd., & others, petitioners have filed this petition with a
prayer that Chief Secretary, General Administration Department, Gandhinagar, Director of
Prohibition, Ahmedabad, and Collector of Central Excise and Customs, Ahmedabad be restrained
from interfering with the trucks owned by the first petitioner and or hired by them from passing
through the territory of Gujarat with liquor-loaded therein for the purpose of delivery thereof in
the State of Maharashtra. The petitioners also challenged the validity of Rule 10 of the Gujarat
Through Transport Rules, 1966 on the ground that said rule do not impose reasonable restrictions
nor restrictions are in public interest and even on this ground they said Rules violate the
guarantee of free trade, commerce throughout the territory of India as guaranteed by Article 301
of the Constitution of India.

State of Punjab and Anr. Vs. Devans Modern Brewaries Ltd. and Anr.
MANU/SC/0961/2003

In this case Appellants filed the present petition against enhancement of import fee on Indian
Made Foreign Liquor. It has been held in earlier judgments that trade in liquor is not a
fundamental right and is a privilege of the state. State Govt. is competent and empowered to
regulate import and export of liquor. Imposition on enhancement of import fee does not restrict
trade, commerce, and intercourse among the states. Dealing in liquor is neither a right nor is the
levy a tax or a fee. Issuance of liquor license constitutes a contract between the parties i.e. Excise
authorities and the individual applicant. Manufacture and sale of liquor are the exclusive
privilege of the state which it may part with for consideration. State while imposing import duty
is exercising its power under the statute. Excise duty and price for privileges is regarded as one
and the same thing. Unless dealing in liquor is excluded from trade or business, a citizen has
fundamental right to deal in that commodity.

RESEARCH METHODOLOGY
For this study "Doctrinal" method of research has been followed by the researcher to extract
literary sources from library, educational websites like Manupatra and other literary sources.

HYPOTHESIS

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It is the general presumption of the researcher that right to freedom of trade and commerce
includes both business and trade also

Does gambling and lottery system come under article 19(1)(g) of the constitution of India which
states the right to freedom of trade and commerce as discussed in the above case

Every right has its own exceptions now the point to study is how and in which cases are the
exceptions applicable. The researcher would like to critically analyze the right to freedom of
trade and commerce and its current situation in India. How it is practically applicable.

11. FREEDOM OF TRADE AND PROFESSION

The freedom of trade and profession has been favored by the common law of England from the
earliest times on grounds of public policy. It was expressed by Alderson, B., in the judgment of
the Exchequer Chamber in Hilton Vs Eckersley case as "prima facie, it is the privilege of a trader,
in a free country to regulate his own mode of carrying his trade on, accordance to his own
discretion and choice. If law has in any manner regulated or restrained his mode of doing this,
the law must be obeyed1. But no power can restrain his discretion of trade and profession of his
choice of trade and profession are under the lawful limits.

When it comes to the case of India the above said principles are also followed in India because
we follow Common Law and our law is mostly based upon the principles of English law. Article
19 of Indian Constitution provides Right to Freedom and sub-clause (g) of article 19 provides
Right to carry on occupation, trade, or business. But this right is subject to the restrictions
provided in article 19(6) of Indian constitution as no right is an absolute right i.e. Right to
freedom to carry on occupation, trade and profession is given in article 19(1)(g) and restrictions
are provided in 19(6). But this right does not confer the right to do anything exceeding limit of
restrictions for example: consider illegal trade in eyes of law or intention to hold a particular job
or to occupy a particular post of choice of any particular person.

11.1. DIFFERENTIATION BETWEEN TRADE BUSINESS AND


PROFESSION:
1 FREEDOM OFTRADE: - 5 Commw. L. Rev. 241 1907-1908

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11.1.1. TRADE: -

The word trade means exchange of goods for goods or goods for money or any business carried
on with a view for profit, whether manual or mercantile distinguished from liberal arts or learned
professions and from agriculture2.

Trade in its primary meaning is the exchanging of goods for goods or goods for money, in its
secondary meaning for goods, it is repeated activity in the nature of business carried on with a
profit motive, the activity manual or mercantile, as distinguished from the liberal arts or learned
professions or agriculture and Exchange of goods for goods or for money with the object of
making profits in the widest sense, it includes any business carried on with a view to earn profit.

11.1.2. BUSINESS: -

The expression business occurring in Section 10(3) (a) (iii) of the Andhra Pradesh Buildings
Control Act, 19603 is used in a wide sense so as to include the practice of the profession of an
advocate. It is clear that having regard to this decision the practice of law must be regarded as
business also for the purpose of Tamil Nadu Building Act 18 of 19604, the appellant must be held
entitle to recover possession for the purpose of carrying on the profession of the law. The word
businesses must be interpreted in the context of the statue. in which it occurs and not in the
context of the other statutes or in a manner alien to the context of the statute concerned.

Business includes any trade, commerce or manufacture or any adventure in the nature of trade,
commerce or manufacture or any profession or vocation, but does not include a profession
carried on by an individual or by individuals in partnership if though profits of the profession
consists wholly or mainly on his or their personal qualifications, unless such profession consists
wholly or mainly in the making of contracts on behalf of other persons or giving other persons
advice of a commercial nature in connection with the making of contracts, provided that where
the functions of a company or of a society incorporated by or under any enactment consist
wholly or mainly in holding of investments or other property, the holding of the investments or
property shall be deemed for the purpose of this definition to be a business carried on by such

2 Industrial Disputes Act, 1947


3 (Lease and Rent Evacuation)
4( Lease and Rent Control)

20
company or society; provided further that all businesses to which this Act applies carried on by
the same person shall be treated as one business for the purposes of this Act.

11.1.3. PROFESSION: -

The meanings of the word profess have been given in Websters New World Dictionary as to
avow publicly, to make an open declaration of , to declare ones behalf in, as to profess religion.
The meanings given in the Shorter Oxford Dictionary are more or less the same.

Profession defined in Concise Oxford Dictionary means, among other things, vocation, and
calling, especially one that involves some branch of learning or science, as the learned
profession. A profession is normally associated with the exercise of intellectual or technical
equipment resulting from learning or science.

The term profession involves the idea of an occupation requiring either purely intellectual skill
or manual skill controlled, as in painting and sculpture, or surgery, by the intellectual skill of the
operator, as distinguished from an operation which is substantially the production or sale of
arrangements for the production or sale of commodities. The term originally contemplate only
theology, law and medicine, but as applications of science and learning are extended to other
departments of affairs, other vocations also receive the name, which implies professed
attainments in special knowledge as distinguished from mere skill.

The words trade, business, profession in Article 19 (1) (g) have been interpreted varyingly.
The word trade as used in Article 19 (1) (g), has been held in Safdarjung Hospital case is of the
widest scope. It includes the occupation of men in buying and selling, barter or commerce, work,
especially skilled e.g. the trade of gold smiths. It even includes persons in a line of business in
which persons are employed as workmen.

11.2. CONSTITUTIONAL PROVISIONS

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Free flow of trade, commerce, and intercourse within and across inter-State borders is an
important pre-requisite for ensuring economic unity, stability, and prosperity of a country having
a two-tier polity. Most federal constitutions contain special provisions to protect this freedom.
The Indian Constitution also contains provisions guaranteeing freedom of commerce, trade, and
intercourse throughout the territory of India. However, no freedom can be absolute. Limitations
for the common good are inherent in such freedom, lest it should degenerate into a self-defeating
license. That is why, legitimate regulatory measures are not considered to constitute restrictions
on this freedom5.

Article 19(1)(g) in Part III guarantees to every Indian citizen a fundamental right to carry on
trade and business, subject to such reasonable restrictions as may be imposed in the interests of
the general public. Apart from this and the Legislative Entries relating to trade and commerce,
the other provisions relating to trade, commerce and intercourse within the territory of India are
found in Articles 301 to 307 of Part XIII of the Constitution. Article 301 guarantees that trade,
commerce and intercourse shall be free throughout the territory of India. It imposes a general
limitation on the exercise of legislative power, whether of the Union or of the States, to secure
unobstructed flow of trade, commerce and intercourse from one part of the territory of India to
another.

11.3. SCOPE OF ARTICLES 301 TO 304

(A) Intra-State Trade: -

Section 92 of the Australian Constitution guarantees that trade, commerce and intercourse among
the States shall be absolutely free, Possibly influenced by the phraseology of this Australian
provision, the Draft Constitution of October, 1947, envisaged that subject to the provisions of
any federal law, trade, commerce and intercourse among the units shall be free. But, in the course
of discussions, the Constitution framers replaced the words among the units by the phrase
throughout the territory of India. The use of this phrase in Article 301 puts it beyond doubt
that, unlike the Australian Constitution, the freedom guaranteed in Article 301 of our
Constitution, is not confined to inter-State trade, commerce and intercourse, but also extends to

5 1963 Cambridge L.J. 54 1963

22
intra-State trade, commerce, and inter-course6. Article 302 to 305 which admit of various
exceptions to this freedom, also cover trade, commerce, and intercourse within a State even if it
does not involve movement beyond the State borders.

(B) Taxing Laws

Any law which directly and immediately impedes or restricts the free flow or movement of trade
would infringe the guarantee in Article 301. The Supreme Court has held that taxing laws have
not been excluded from the application of this principle7.

(C) Regulatory Measures and Compensatory Taxes

Measures which impose compensatory taxes, or, are purely regulatory, do not come within the
purview of 'restrictions' contemplated in Article 301 because they facilitate flow of trade, rather
than hampering it. Such measures, therefore, need not comply with the requirement of the
provisions of Article 304(b). Thus, 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 State8.

(D) Sales-Tax

Normally, a tax on intra-State sale or inter-State sale of goods does not directly impede or restrict
the free flow of trade in those goods, and therefore, cannot offend Article 301, whatever be the
indirect effect of such tax on the trade9.

(E) Trade injurious to Society

It is well settled that in proper cases, such as where the trade is injurious to society, 'reasonable
restriction' within the contemplation of Article 302 or 304(b) may include prohibition or
suppression of that trade altogether10.

6 6 Melb. U. L. Rev. 237 1967-1968


7 5 U. Queensland L.J. 317 1965-1967
8 MANU/SC/0572/1995
9 MANU/SC/0961/2003
10 MANU/GJ/0182/2002

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OUTCOMES OF THE PROJECT

From this project we come to know that: -

Right to freedom of trade and profession is not an absolute right, if trade activates are
against public policy it can be infringed.
Government shall not interfere with right to trade and profession as it is a public policy.
Right to trade and profession differentiates trade, business, and profession which are
studied through case laws.
Taxes imposed on some particular businesses are valid because the nature of trade or
business doesn't come under normal or natural trade practice.
Trade and business of liquor or substances which are noxious to health can be prohibited
as public health and safety is main concern.

SUGGESTIONS AND CONCLUSIONS


SUGGESTIONS: -
Free flow of trade, commerce, and intercourse within and across inter-State borders is an
important pre-requisite for ensuing economic unity, stability, and prosperity of a country
having a two-tier polity. Limitations for the common good are inherent in such freedom,
least it should de-generate into a self-defeating license.
Notwithstanding the fact that the word 'reasonable' is not used in Article 302, a low
imposing restrictions under Article 302 would be open to judicial review on the ground
that it has no reasonable nexus with the public interest alleged. The proposal for insertion
of the word 'reasonable' before the world 'restriction' in Article 302 is thus merely of
theoretical significance and cannot be supported.
Intra-State trading activities often have a close and substantial relation to inter-State trade
and commerce. State laws though purporting to regulate intra-State trade may have
implications for inter-State trade and commerce. These may impose discriminatory taxes
or unreasonable restrictions impeding the freedom of inter-State trade and commerce.

CONCLUSION: -
The whole field of freedom of trade, commerce and intercourse bristles with complex questions
not only in regard to constitutional aspects but also in respect of the working of the arrangements
on account of impact of legislation of the Union on the powers of the States and the effect of

24
legislation of both the Union and the States on free conduct of trade, commerce and intercourse.
Considering the intricate nature and the need for objective examination of the wide-ranging issue
connected with the freedom of trade, commerce and intercourse, it is recommended, that an
expert authority should be constituted under Article 307. Among other things, such an authority
may be enabled to:
(a) Survey and bring out periodically a report on the restrictions imposed on intra-State and inter-
State trade and commerce by different governments and their agencies;
(b) Recommend measures to rationalize or modify the restrictions imposed to facilitate free trade
and commerce;
(c) Examine complaints from the public and the trade in this regard; and
(d) Suggest reforms in the matter of imposition, levying and sharing of taxes for purposes of Part
XIII of the Constitution.
The ambit of Article 307 is wide enough to bring all matters relevant to freedom and regulation
of trade, commerce and intercourse within the purview of such an authority 'for carrying out the
purposes of Articles 301, 302, 303 and 304'. It is entirely left to the judgment of parliament to
clothe the 'authority' under Article 307 with such powers and duties as may be considered
necessary. Such an 'authority' may have both an advisory and executive, role with decision-
making powers. To begin with such an authority may be assigned an advisory role. In course of
time in the light of experience gained, such additional powers as may be found necessary can be
conferred on it.

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BIBLIOGRAPHY

ARTICLES: -

FREEDOM OF TRADE. 5 Commw. L. Rev. 241 1907-1908


THE FREEDOM OF TRADE AND COMMERCE IN THE INDIAN
CONSTITUTION 1963 Cambridge L.J. 54 1963
THE CONCEPT OF FREEDOM IN INTERSTATE TRADE 5 U. Queensland L.J. 317
1965-1967
RECLAIMING THE FREEDOM TO TRADE 8 Rev. Const. Stud. 42 2003
FREEDOM OF INTERSTATE TRADE 6 Melb. U. L. Rev. 237 1967-1968

CASES: -
Ashoka Kumar Thakur Vs. Union of India (UOI) and Ors. (MANU/SC/1397/2008)
Bishambhar Dayal Chandra Mohan and Ors. Vs. State of Uttar Pradesh and Ors.
(MANU/SC/0056/1981)
Khoday Distilleries Ltd. and Ors. Vs. State of Karnataka and Ors.
(MANU/SC/0572/1995)
Precious Carrying Corporation and Anr. Vs. State of Gujarat and Ors.
(MANU/GJ/0182/2002)
State of Punjab and Anr. Vs. Devans Modern Brewaries Ltd. and Anr.
(MANU/SC/0961/2003)

*****

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