According to reports from Mint, Article 265 of the Indian Constitution states that no tax can be levied or collected except by the authority of law. This fundamental constitutional provision ensures that every tax must have a valid legal basis enacted by Parliament or a state legislature, preventing arbitrary taxation by the government. The rule requires that taxes must be levied by valid law and collected strictly in accordance with that law, with any deviation potentially making the tax arbitrary and unconstitutional. As the 31 July 2026 deadline for FY 2025-26 income tax returns approaches, taxpayers should understand that every tax must have a clear legal foundation and cannot be imposed through executive orders, departmental circulars, or administrative instructions alone.
As reported by Mint, the Supreme Court has repeatedly upheld Article 265 through landmark judgments. In Commissioner, Hindu Religious Endowments v. Sri Lakshmindra Thirtha Swamiar of Shirur Mutt (1954), the Court distinguished taxes from regulatory fees and emphasised that taxation must derive its authority from legislation. Similarly, in K.T. Moopil Nair v. State of Kerala (1961), the Court struck down a discriminatory land tax, holding that taxation cannot violate constitutional guarantees. More recently, in Union of India v. VKC Footsteps India Pvt. Ltd. (2021), while interpreting the GST framework, the Supreme Court reiterated that tax rights and liabilities must flow from the statute itself, not from executive interpretation. The Court emphasised that taxes must be rooted in legislation, not administrative discretion, reinforcing that taxes cannot be imposed through executive orders or administrative instructions alone.
According to Mint, Article 265 embodies the rule of law of constitution-driven taxation to ensure fiscal transparency and administration. The provision requires that taxes must be levied by valid law and collected strictly in accordance with that law, with any deviation potentially making the tax arbitrary and unconstitutional. The Income Tax Act and other direct and indirect tax laws ultimately derive their authority from this constitutional provision, ensuring that tax authorities cannot collect revenue merely because doing so is administratively convenient. For taxpayers, Article 265 reinforces an important principle: they are entitled to know the legal basis for every tax imposed on them, with the government accountable to Parliament and state legislatures for all taxation decisions.
As reported by Mint, Article 265 continues to serve as a vital constitutional safeguard as India's tax regime evolves with GST, digital taxation and technology-driven compliance. The provision protects taxpayers from arbitrary tax demands while ensuring that governments remain accountable to Parliament and state legislatures. In a constitutional democracy, taxation is not an executive privilege but a legislative function, with Article 265 upholding fiscal discipline, constitutional governance and the rule of law by ensuring that no tax can be levied or collected without the authority of a valid law. The provision promotes transparency by requiring every tax to have a clear legal foundation, ensuring that taxation remains a constitutional function rather than an administrative convenience.
