Article 307

Article 307 of the Constitution of India is the concluding provision under Part XIII, which governs trade, commerce, and intercourse within the territory of India. This Article serves a vital institutional role by authorising Parliament to create and empower an authority responsible for the implementation and supervision of the constitutional guarantees provided under Articles 301 to 304. Its inclusion ensures that the freedom of trade and commerce across India is not merely theoretical but supported by an administrative framework capable of enforcing and regulating these provisions effectively.

Constitutional Context and Objective

The founding principle of Part XIII is the creation of a unified national market in which goods, services, and persons can move freely throughout the Indian Union. Articles 301 to 304 lay down the substantive framework for this freedom, while Article 307 provides the institutional mechanism for enforcing it.
The framers of the Constitution recognised that economic freedom required not only legal guarantees but also administrative oversight to address disputes, monitor compliance, and coordinate between the Union and the States. Hence, Article 307 was designed to give Parliament the flexibility to establish an authority to implement and ensure adherence to the constitutional norms governing trade and commerce.

Text and Scope of Article 307

Article 307 reads:“Parliament may by law appoint such authority as it considers appropriate for carrying out the purposes of Articles 301 to 304, and confer on the authority such powers and impose such duties as it thinks necessary.”
The provision gives Parliament discretionary power, rather than an obligation, to establish such an authority. The key elements of this provision include:

1. Parliamentary Authority: Only Parliament, and not State Legislatures, possesses the power to create and define the functioning of the authority under Article 307.
2. Scope of Powers and Duties: Parliament may determine the composition, jurisdiction, and specific responsibilities of the authority through legislation.
3. Purpose of the Authority: The authority’s primary task is to carry out the purposes of Articles 301 to 304, ensuring free, fair, and regulated trade and commerce throughout India.

This broad constitutional mandate allows for the establishment of an institution suited to changing economic and administrative needs.

Purpose and Functions of the Appointed Authority

The authority envisaged under Article 307 is intended to perform both regulatory and supervisory functions to maintain the constitutional balance between economic freedom and governmental control.
Possible functions of such an authority include:

• Monitoring compliance with the freedom of trade, commerce, and intercourse guaranteed under Article 301.
• Supervising restrictions imposed under Articles 302 to 304 to ensure they are constitutionally justified, non-discriminatory, and in the public interest.
• Advising Parliament and the States on trade-related legislative and policy matters.
• Preventing discriminatory practices between States that may violate the principles of free trade.
• Mediating disputes arising from inter-State trade barriers or inconsistencies in legislation.

Although no specific authority has yet been established under Article 307, its provision provides a constitutional foundation for creating one if needed to coordinate trade regulation in the future.

Relationship with Articles 301 to 304

Article 307 functions as a supporting provision to the preceding Articles, ensuring their practical application:

• Article 301: Guarantees the freedom of trade, commerce, and intercourse throughout India.
• Article 302: Empowers Parliament to impose reasonable restrictions in the public interest.
• Article 303: Prohibits discrimination between States in trade and commerce.
• Article 304: Allows States to impose non-discriminatory taxes and reasonable restrictions with Presidential sanction.

While Articles 301 to 304 establish substantive rights and restrictions, Article 307 operationalises them by envisaging an institutional structure for implementation and enforcement.

Legislative Authority and Framework

Parliament holds the exclusive legislative power to:

• Create an authority under Article 307.
• Define its structure, including its composition, jurisdiction, and functioning.
• Assign powers and duties to this authority.

The flexibility embedded in Article 307 allows Parliament to design the authority according to changing administrative or economic requirements. For instance, it may be structured as a regulatory commission, an advisory council, or an inter-governmental coordinating body.
So far, Parliament has not enacted any specific legislation to establish such an authority. Nevertheless, existing bodies like the Goods and Services Tax (GST) Council and the Finance Commission partially perform functions aligned with the spirit of Article 307 by promoting uniform trade regulation and fiscal balance across India.

Judicial Interpretation and Case Law

Although Article 307 has rarely been directly invoked before courts, the Supreme Court of India has discussed its relevance in the broader context of trade freedom under Part XIII.

• Bihar v. Kameshwar Singh (1952): The Court examined the relationship between State powers and trade freedom, indirectly recognising Parliament’s role in ensuring uniform regulation through Article 307.
• K. K. Verma v. Union of India (1954): Emphasised the need for balance between trade freedom and legislative control, highlighting the importance of administrative mechanisms such as those envisioned by Article 307.
• M/s. S. R. Tewari v. District Board, Agra (1964): Clarified that Parliament’s authority under Article 307 extends to defining both the powers and responsibilities of the implementing authority.
• State of Karnataka v. Appa Balu Ingale (1993): Discussed the principle of free trade under Article 301 and indirectly underlined the need for mechanisms to uphold this freedom.

While these cases did not directly establish an authority under Article 307, they affirmed the importance of administrative oversight in maintaining constitutional trade freedoms.

Significance of Article 307

Article 307 performs a critical constitutional function by bridging the gap between legal principles and administrative execution. Its significance can be outlined as follows:

• Ensures enforceability: It provides Parliament with the means to make Articles 301–304 operational.
• Promotes coordination: Facilitates cooperation between the Union and the States in economic matters.
• Maintains balance: Safeguards the equilibrium between economic liberty and legitimate regulation.
• Supports national integration: Reinforces the vision of a unified national market free from regional barriers.

In practice, Article 307 symbolises the Constitution’s commitment to economic federalism, combining national oversight with respect for State autonomy.

Challenges and Criticism

Despite its constitutional importance, Article 307 faces certain practical challenges:

• Non-implementation: No formal authority has been established under this Article since the Constitution’s inception.
• Potential for overlap: The creation of such an authority could duplicate the roles of existing inter-governmental institutions.
• Concerns of misuse: Broad legislative discretion could lead to over-centralisation or politicisation of trade regulation.
• Balancing State interests: Implementing a uniform authority must respect the federal structure and economic diversity among States.

Nevertheless, as India’s economy evolves, the establishment of an authority under Article 307 could strengthen regulatory consistency and ensure smooth inter-State commerce.

Contemporary Relevance

In the modern context—marked by economic liberalisation, the Goods and Services Tax framework, and the growth of digital trade—the potential use of Article 307 has renewed importance. A national authority could:

• Facilitate coordination in inter-State trade disputes.
• Ensure uniform enforcement of tax and transport laws.
• Monitor compliance with trade-related constitutional guarantees.