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In Atiabari Tea Co. case (1961) and Automobile Transport case (1962), the Supreme Court held that Article 301's freedom of trade is subject to regulatory measures that are ______ and not compensatory taxes that are discriminatory.
- protectionist
- reasonable and in public interest
- arbitrary
- State-specific
Answer: reasonable and in public interest
Article 301 jurisprudence: (a) Atiabari Tea Co. (1961): Freedom of trade under Article 301 not absolute; subject to regulatory measures (e.g., licensing, safety standards) that are reasonable and in public interest, but not to compensatory taxes that directly impede trade, (b) Automobile Transport (1962): Clarified compensatory taxes (fees for facilities like roads) permissible if non-discriminatory and proportionate to benefits provided, (c) Subsequent cases: Balance between free flow of goods (national economic integration) and State regulatory powers (public health, environment, revenue), (d) GST impact: Subsumed multiple State/Union taxes, reducing barriers to inter-State trade; Council mechanism resolves rate/regulation disputes. Illustrates judicial role in calibrating economic federalism: enabling national market while respecting legitimate State interests.