Article 265 of the Constitution of India lays down a fundamental principle of taxation in the country. It states: “No tax shall be levied or collected except by authority of law.” This means that no government authority—whether central or state—can impose or recover any tax without having a proper legal backing through a statute passed by the legislature. This article upholds the principle of the “rule of law” and safeguards citizens from arbitrary taxation. It ensures that taxes are imposed fairly and in accordance with laws made by duly elected representatives.
In alignment with Article 265, the Indian tax system is governed by various legislations. For instance, under Section 4 of the Income Tax Act, 1961, income tax is charged only as per the rates specified by the law. Similarly, the Goods and Services Tax (GST) Acts of 2017 empower the central and state governments to levy indirect taxes, but only within the framework established by the legislature. Even procedural aspects, such as Section 143(2) (for scrutiny assessments) or Section 147 (for reopening assessments), are strictly defined under the Income Tax Act, ensuring that the tax collection process remains lawful and transparent.
The judiciary in India has reaffirmed the sanctity of Article 265 in various rulings. In Commissioner of Income Tax vs. B. C. Srinivasa Setty (1981), the Supreme Court highlighted that in the absence of a specific provision under law, tax cannot be charged. Likewise, in State of West Bengal vs. Kesoram Industries (2004), it was held that taxes must have a clear legislative mandate. Such interpretations reinforce the notion that taxation must always follow the established statutory route and that any deviation from this principle renders the tax action invalid.
Mnemonic to remember Article 265:
🔑 “A2-65: Authority Above All”
– A stands for Article,
– 2-6-5 sounds like “To fix”, meaning tax must be fixed by law,
– “Authority Above All” reminds us that no tax without law—only authority of law can allow levy and collection.
