Can the government impose taxes without a law? What Article 265 says
Have you filed your income tax return for FY 2025-26? With the 31 July 2026 deadline approaching, taxpayers should ensure they understand not only their tax obligations but also the constitutional principles that govern taxation in India.
One of the most important safeguards for taxpayers is Article 265 of the Indian Constitution, which states: “No tax shall be levied or collected except by authority of law.”
This seemingly simple provision lays down a fundamental constitutional principle: the government cannot impose or collect taxes through executive orders, departmental circulars, or administrative instructions alone. Every tax must have a valid legal basis enacted by a competent legislature.
Article 265: A constitutional shield against arbitrary taxation
Article 265, therefore, embodies the rule of law of constitution-driven taxation to ensure fiscal transparency and administration. It requires two essential elements:
- The tax must be levied by a valid law.
- It must also be collected strictly in accordance with the law.
If either of these conditions is not met, the tax may be considered arbitrary and unconstitutional.
The Supreme Court has repeatedly upheld this principle through landmark judgments.
In Commissioner, Hindu Religious Endowments v. Sri Lakshmindra Thirtha Swamiar of Shirur Mutt (1954), the Court distinguished a tax from a regulatory fee 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. In other words, taxes must be rooted in legislation, not administrative discretion.
Why Article 265 remains relevant
As India’s tax regime evolves with GST, digital taxation and technology-driven compliance, Article 265 continues to serve as a vital constitutional safeguard.
It protects taxpayers from arbitrary tax demands while ensuring that governments remain accountable to Parliament and state legislatures. It also promotes transparency by requiring every tax to have a clear legal foundation.
The Income Tax Act and other direct and indirect tax laws ultimately derive their authority from this constitutional provision.
For taxpayers, Article 265 reinforces an important principle: they are entitled to know the legal basis for every tax imposed on them. Tax authorities cannot collect revenue merely because doing so is administratively convenient.
In a constitutional democracy, taxation is not an executive privilege but a legislative function. Article 265 continues to uphold 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.
Disclaimer: This article is for informational and educational purposes only and does not constitute legal or tax advice. It provides a general explanation of Article 265 of the Constitution of India. The application of constitutional and tax laws may vary based on individual circumstances. Readers should consult a qualified legal or tax professional for specific advice.
