This document summarizes key provisions related to taxation and public funds in the Indian Constitution. It discusses Articles 265, 266, 267, 283, and 292 which address topics like no taxation without authority of law, consolidated funds, contingency funds, regulation of public funds, and borrowing by the government of India. The document is intended to provide a basic understanding of the constitutional framework for taxation and public financial management in India.

1. Presented by –Nishant sharma
HPF&AS Trainee 2018

2. contents
1. Introduction
2. Articles -1.Article 266
2.Article 267
3.Article 283
4.Article 292
3. Conclusion

3. Introduction
 Constitution is the foundation and source of
powers to legislate all laws in India.
Parliament, as well as State Legislatures gets
the power to legislate various laws from the
Constitution only and therefore every law
has to be within the vires of the
Constitution.

4. Introduction
 Talking about the taxation laws and the
interpretation of taxation laws, every lawyer or a
tax professional practicing taxation laws must
understand the basic provisions of Constitution
relating to taxation including the powers of
Parliament and State Legislatures to legislate
regarding levy and collection of tax, the
restrictions imposed by our Constitution on such
powers, entries concerning taxation in Central List
i.e List-1 and State List i.e List-2 of Seventh
Schedule to Constitution of India.

5.  All laws and executive actions are subordinate to the
Constitution. To form clear understanding of the basic
concepts relating to taxation laws one must
understand the relevant provisions of the
Constitution, as the power to levy and collect tax by
State Governments or Union Government comes from
the Constitution only.
 One thing must be kept in mind that there is always an
object behind every law and that object ultimately
exists to achieve the objects enumerated in the
Preamble of our Constitution.

6. Article 265
 under Article 265 of the Constitution of India no tax
shall be levied or collected without an authority of law
 under Article 265 of the Constitution of India no tax shall
be levied or collected without an authority of law and
that Article 265 contemplates two stages - one is levy of tax
and other is collection of tax and that levy of tax includes
declaration of liability and assessment, namely,
quantification of the liabilities. After the quantification of
the liability follows the collection of tax and it should be
only by an authority of law. The authority of law should be
only by a legislative fiat but not by an executive fiat.
Levying of interest is one of the modes of recovery of tax or
collection of tax to compel the assessee to pay the tax in
time

7. Article 265
 . In other words levy of interest is a part of collection of tax and,
therefore, it is covered by the second limb of Article 265. If it
forms part of collection of tax under Article 265, it should be by
an authority of law. The delinquent taxes do not bear interest as
such or by way of penalty, in the absence of express provision of
law imposing liability expressly for the reason that taxes are not
debts in the ordinary sense of contractual obligations and,
therefore, not within the meaning of the general interest clause;
that as impositions by governmental authorities, they do not
bear interest except by the express provision of statute and once
the assessment has become final all that remains to be done is to
collect the tax assessed and when the stage of collection is
reached the manner of collection must be authorised by law and
the State is prohibited from adopting illegal or arbitrary methods
of collecting tax already levied and assessed

8. Article 265
 . The word 'levy' is used to include both first two stages
involved in the process of taxation, viz., the levy
properly so-called and the determination of the
amount of the tax and the words "levy" and
"collection" are used in Article 265 of the Constitution
in a comprehensive manner and that they are intended
to include and envelop the entire process of taxation
commencing from the taxing Statute to the taking
away of the money from the pocket of the citizen

9. Article 266 in The Constitution Of
India
 266. Consolidated Funds and public accounts of India and of the
States(1) Subject to the provisions of Article 267 and to the
provisions of this Chapter with respect to the assignment of the
whole or part of the net proceeds of certain taxes and duties to
States, all revenues received by the Government of India, all
loans raised by that Government by the issue of treasury bills,
loans or ways and means advances and all moneys received by
that Government in repayment of loans shall form one
consolidated fund to be entitled the Consolidated Fund of India,
and all revenues received by the Government of a State, all loans
raised by that Government by the issue of treasury bills, loans or
ways and means advances and all moneys received by that
Government in repayment of loans shall form one consolidated
fund to be entitled the Consolidated Fund of the State

10. Article 266 in The Constitution Of
India
 (2) All other public moneys received by or on behalf of
the Government of India or the Government of a State
shall be entitled to the public account of India or the
public account of the State, as the case may be
 (3) No moneys out of the Consolidated Fund of India
or the Consolidated Fund of a State shall be
appropriated except in accordance with law and for the
purposes and in the manner provided in this
Constitution

11. The account of govt. are kept In
three parts-
 Consolidated Funds of India
 Contingency Funds of India
 Public Account
 Consolidated Fund of India

12.  This is the chief account of the Government of India. The
inflow to this fund is by way of taxes like Income Tax,
Central Excise, Customs and also non-tax revenues which
arise to the government in connection with the conduct of
its business. Loans raised by issue of treasury bills are also
received in this fund. The government meets all its
expenditure including loan repayments from this fund. No
amount can be withdrawn from the fund without
the authorisation from the Parliament. This fund is
formed under the provision of Aricle 266 (1) of the Indian
Constitution.
 Each state may have its own consolidated fund of the state
with similar provisions.
 Public Account

13.  The Public Account is constituted under Article 266
(2) of the Constitution. All other public moneys (other
than those covered under Consolidated Fund of India)
received by or on behalf of the Government of India
are credited to the public account of India.

14.  The transactions under Debt, Deposits and Advances
in this part are those in respect of which Government
incurs a liability to repay the money received or has a
claim to recover the amounts paid. The receipts under
Public Account do not constitute normal receipts of
Government. Parliamentary authorization for
payments from the Public Account is therefore not
required.
 Each state may have its own Public Fund on similar
lines.

15. Article 267 in The Constitution Of
India
 267. Contingency Fund(1) Parliament may by law
establish a Contingency Fund in the nature of an
imprest to be entitled the Contingency Fund of India
into which shall be paid from time to time such sums
as may be determined by such law, and the said Fund
shall be placed at the disposal of the President to
enable advances to be made by him out of such Fund
for the purposes of meeting unforeseen expenditure
pending authorisation of such expenditure by
Parliament by law under Article 115 or Article 116

16. Article 267 in The Constitution Of
India
 (2) The Legislature of a State may by law establish a
Contingency Fund in the nature of an imprest to be
entitled the Contingency Fund of the State into which
shall be paid from time to time such sums as may be
determined by such law, and the said Fund shall be
placed at the disposal of the Governor of the State to
enable advances to be made by him out of such Fund
for the purposes of meeting unforeseen expenditure
pending authorisation of such expenditure by the
Legislature of the State by law under Article 205 or
Article 206 Distribution of Revenues between the
Union and the States

17.  The Constitution of India authorized[2] the parliament to
establish a contingency fund of India. The Contingency
Fund of India is established under Article 267(1)of the
Indian Constitution. It is in the nature of an imprest
(money maintained for a specific purpose). Accordingly,
Parliament enacted the contingency fund of India Act 1950.
The fund is held by the Finance Secretary (Department of
Economic Affairs) on behalf of the President of India and it
can be operated by executive action. The Contingency
Fund of India exists for disasters and related unforeseen
expenditures.[3] In 2005, it was raised from Rs. 50 crore
to Rs 500 crore

18. Article 267 in The Constitution Of
India
 .[4] Approval of the Parliament of India for such expenditure and
for withdrawal of an equivalent amount from the Consolidated
Fund is subsequently obtained to ensure that the corpus of the
Contingency Fund remains intact. Similarly, Contingency Fund
of each State Government is established under Article 267(2) of
the Constitution – this is in the nature of an imprest placed at
the disposal of the Governor to enable him/her to make advances
to meet urgent unforeseen expenditure, pending authorization
by the State Legislature. Approval of the Legislature for such
expenditure and for withdrawal of an equivalent amount from
the Consolidated Fund is subsequently obtained, whereupon the
advances from the Contingency Fund are recouped to the Fund.
The corpus varies across states and the quantum is decided by
the State legislatures.

19.  . According to the provisions of Article 267(1), Parliament may by
law establish a Contingency Fund of India in the nature of an
imprest. Such sums of money shall be deposited into this fund as
may be determined by law made by Parliament. The
Contingency Fund of India shall be placed at the disposal of the
President who shall make advances out of this fund to meet
unforeseen expenditure pending authorization by Parliament.
The money withdrawn out of Contingency Fund is paid back to
it as and when Parliament authorizes such unforeseen
expenditure. The basic purpose behind this fund is to meet some
immediate and urgent expenditure which can not be authorised
immediately by Parliament.

20.  Similarly, under the provisions of Article 267(2) the Legislature of a
State by law may establish a Contingency Fund of the State in the
nature of an imprest. Such sums of money shall be paid into this fund
as is determined by the law made by the State Legislature. This fund
shall be placed at the disposal of the Governor who can make advances
out of this fund to meet some unforeseen expenditure, pending
authorization of such expenditure by the State Legislature.
The Government of India or of a State cannot make any expenditure
out of the Consolidated Funds without the authorisation of such
expenditure by Parliament or the State Legislature, as the case may be.
If a situation may arise when the money is needed to meet some
unexpected expenditure and the concerned Legislature will take time
to authorize such expenditure, the money can be taken out the
Contingency Fund by the President or the Governor to meet such
urgent expenditure.

21. Article 283 in The Constitution Of
India
 283. Custody, etc of Consolidated Funds, Contingency
Fun The custody of the Consolidated Fund of India and the
Contingency Fund of India, the payment of moneys into
such Funds, the withdrawal of moneys therefrom, the
custody of public moneys other than those credited to such
Funds received by or on behalf of the Government of India,
their payment into the public account of India and the
withdrawal of moneys from such account and all other
matters connected with or ancillary to matters aforesaid
shall be regulated by law made by Parliament, and, until
provision in that behalf is so made, shall be regulated by
rules made by the President

22. Article 283 in The Constitution Of
India
 (2) The custody of the Consolidated Fund of a State and the
Contingency Fund of a State, the payment of moneys into
such Funds, the withdrawal of moneys therefrom, the
custody of public moneys other than those credited to such
Funds, received by or on behalf of the Government of the
State, their payment into the public account of the State
and withdrawal of moneys from such account and all other
matters connected with or ancillary to matters aforesaid
shall be regulated by law made by the Legislature of the
State, and, until provision in that behalf is so made, shall
be regulated by rules made by the Governor of the State
 ds and moneys credited to the public accounts-

23. Article 283(1) in The Constitution
Of India 1949
 (1) The custody of the Consolidated Fund of India and
the Contingency Fund of India, the payment of
moneys into such Funds, the withdrawal of moneys
therefrom, the custody of public moneys other than
those credited to such Funds received by or on behalf
of the Government of India, their payment into the
public account of India and the withdrawal of moneys
from such account and all other matters connected
with or ancillary to matters aforesaid shall be
regulated by law made by Parliament, and, until
provision in that behalf is so made, shall be regulated
by rules made by the President

24. Article 283(2) in The Constitution
Of India
 (2) The custody of the Consolidated Fund of a State
and the Contingency Fund of a State, the payment of
moneys into such Funds, the withdrawal of moneys
therefrom, the custody of public moneys other than
those credited to such Funds, received by or on behalf
of the Government of the State, their payment into the
public account of the State and withdrawal of moneys
from such account and all other matters connected
with or ancillary to matters aforesaid shall be
regulated by law made by the Legislature of the State,
and, until provision in that behalf is so made, shall be
regulated by rules made by the Governor of the State

25. Article 292 in The Constitution Of
India
292. Borrowing by the Government of
India The executive power of the Union
extends to borrowing upon the security of
the Consolidated Fund of India within
such limits, if any, as may from time to
time be fixed by Parliament by law and to
the giving of guarantees within such limits,
if any, as may be so fixed

26. THANK YOU
NISHANT SHARMA