Finance Commission
Article 280 provides for the appointment by the President of a Finance Commission consisting of a chairman and four members every five years. The Commission shall make recommendations to the President in regard to the distribution of proceeds between the Union and the States and to suggest principles which should govern the grants-in-aid to the States from the Consolidated Fund of India. The President shall cause the recommendations of the Commission and action taken thereon to be laid before each House of Parliament (articles 280281).
Miscellaneous Financial Provisions
Custody etc. of Consolidated Funds, Contingency Funds and · money credited to public accounts are to be regulated by Parliament and each State Legislature concerned (article 283). Suitors’ deposits and other money received by public servants and courts shall be paid into the ‘public accounts of the Union or the State concerned as the case may be (article 284). Property of the Union shall be exempted from taxation by the States and the property of the States shall be similarly exempted from taxation by the Union (articles 285 and 289). Articles 286-288 place restrictions as to the imposition of tax by the States on consumption or sale of electricity or water and on the sale or purchase of goods outside the State or in case of export or import.
Article 290 provides for adjustments to be made between the Union and State Governments in respect of payment of certain expenses of any Court or Commission and pensions of persons in service before the Constitution. Article 290 A provides for certain sums to be paid annually to Devaswom Funds of Travancore and Tamil Nadu from the Consolidated Funds of these States.
Borrowing
The executive power of the Union extends to borrowing upon the Consolidated Fund of India within limits set by Parliament by law (article 292). A State may also similarly borrow subject to limits set by law by the State Legislature. The government of India, within its borrowing powers, may make loans to any State or give guarantees in respect of loans raised by the State. So long as such loans remain outstanding, the State Government may not raise any further loans without the consent of the Government of India (article 293).
Property, Contracts, Rights, Liabilities, Obligations and Suits
Articles 294, 295 and 290 provide that any property, assets, rights, liabilities and obligations vesting in or accruing to the Government of the Dominion or of any of the Provinces or of any of the Indian States before me commencement of the Constitution shall vest’ in the Union or the concerned State. Things of value within territorial waters or continental shelf and resources of the exclusive economic zone shall vest in the Union (article 297).
The executive power of the Union and of each State shall extend to carrying on any trade or business and to acquire, hold or dispose of property and make contracts subject to any law made by the respective legislature (article 298). This article obviously is an independent or additional source of executive power outside article 245. The Supreme Court in Khazan Singh v. State of U.P. (AIR 1974 SC 669) held that the power of a State under article 298 to carry on trade etc, extends to carrying on a trade-in other States also (Also see Anraj vs. the State of Maharashtra, AỊR 1984 SC 781).
All contracts made in the exercise of the executive power of the Union or of a State (i) are to be expressed in the name of the President or the Governor as the case may be and (ii) shall be executed by such officers and (iii) in such manner as may be laid down by him. No personal liability is to attach to the President or the Governor or to the persons executing the contracts etc. (Article 299). It clearly follows that article 299 is mandatory and no contracts etc. are valid unless they are entered into strictly in accordance with the requirements of this provision (Bihar F.G.F Cooperative Society v. Sipai Singh, AIR 1977 SC 2149; Mulanchand V. State of M.P., AIR 1968 SC 1818: State of West Bengal V. B.K. Mondal, AIR 1962 SC 779; Karamshi v. the State of Bombay, AIR 1964 SC 1714).
The Government of India or of a State may sue or be sued by its name subject to any law made by Parliament or the State Legislature. If the Dominion of India was a party in any suit, the Union of India will stand substituted and if a Province or Indian State was a party it will be substituted by the corresponding State (article 300). Right to Property: Originally the Constitution had incorporated the right to property as a fundamental right under articles 19(f) and 31. The 44th Constitution Amendment omitted articles 19(1) and 31 with effect from 20 June 1979. Simultaneously, a new article – article 300A – was added to lay down that “no person shall be deprived of his property save by authority of law”. Thus, the right to property ceased to be a fundamental right but remained a constitutional right and a legal right. In case of the violation of the right under article 32 cannot be invoked, High Court can certainly be approached under article 226. The validity of a law passed under article 300A can be challenged on the ground of no provision being made for payment of compensation for depriving a citizen of his property (Bishamber v. State of U.P., AIR 1982 SC 33; Menaka Gandhi v. Union of India, AIR 1978 SC 597). (Also see under Fundamental Rights).
Freedom Of Trade, Commerce And Intercourse
Article 301 lays down that trade, commerce and intercourse throughout the territory of India shall be free. Parliament may, however, impose by law restrictions in the public interest on inter-State trade, commerce and intercourse (articles 301 and 302). Neither Parliament nor a State Legislature can make a law that gives preference to one State over another in the matter of trade and commerce except that Parliament may by law authorise discrimination that may become necessary for dealing with a situation of scarcity of goods in any part of India (article 303).
The restriction from which freedom of trade etc. is guaranteed should be such as would directly or immediately obstruct the free flow of movement of trade. Regulatory measures or compensatory legislation imposing a tax for facilitating trade cannot be considered violative of the freedom of trade. Both inter-State and intra-State trade is covered by the freedom of trade provision. Trade, commerce and intercourse include the movement of goods and persons.
Freedom of trade etc. under article 301 is subject to restrictions under article 302. and 303. Also, under article 304 a State may impose a tax on goods coming from another State that are subject to a similar tax so as to ensure that there is no discrimination between the goods from the other State and those manufactured within the State. Restrictions may also be imposed by the State by law in the public interest but a Bill for this purpose can be introduced only with the prior sanction of the President. Nothing in articles 301 and 303 shall affect the existing laws and laws providing for State monopolies (article 305). Article 307 provides for the Parliament to appoint an appropriate authority for implementing the provisions of articles 301 to 304.