Automobile Transport (Rajasthan) v State of Rajasthan (1962)

Constitutional Law II · Freedom of Trade

Facts.

Rajasthan levied taxes on motor vehicles used on State roads. Transport operators challenged them under Article 301.

Issue.

Does every tax touching transport violate Article 301, or is a charge for using facilities different?

Held.

A compensatory tax — a reasonable charge for the use of roads/facilities that helps trade — does not violate Article 301; only taxes that impede trade do.

Why it matters.

It supplies the rule that decides almost every trade-and-commerce problem: facilitating levy = valid; blocking levy = void.

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