Article 280 of the Costitution of India with Case law
Here is a detailed explanation of Article 280 of the Constitution of India, including its text, meaning, functions, and relevant case law.
🧾 Article 280 – Finance Commission
🔹 Text of Article 280:
(1) The President shall, within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary, by order constitute a Finance Commission.
(2) It shall be the duty of the Commission to make recommendations to the President as to—
(a) the distribution between the Union and the States of the net proceeds of taxes;
(b) the principles which should govern the grants-in-aid to the States by the Centre;
(c) any other matter referred to the Commission by the President in the interest of sound finance.
(3) The Commission shall consist of a Chairman and four other members appointed by the President.
(4) Parliament may by law determine the qualifications and disqualifications of the members of the Commission and the manner in which they shall be selected.
📌 Purpose of Article 280
| Feature | Description |
|---|---|
| Objective | To ensure a fair distribution of financial resources between the Centre and States. |
| Mandate | The Finance Commission gives recommendations on sharing tax revenues, grants-in-aid, and other financial issues. |
| Frequency | Constituted every 5 years (or earlier, if necessary). |
🏛️ Finance Commissions Till Date
As of 2025, India has had 15 Finance Commissions. The 15th Finance Commission (2017–2021) was chaired by N. K. Singh.
⚖️ Important Case Law Related to Article 280
1. Union of India v. State of Bihar, AIR 1964 SC 1056
Issue: Whether the recommendations of the Finance Commission are binding.
Held: The recommendations are advisory in nature, and the President/government is not bound to accept all of them.
However, they are made by an expert constitutional body and deserve due weight in financial decision-making.
2. State of Karnataka v. Union of India, AIR 1978 SC 68
Context: Federal structure and allocation of powers between Centre and States.
Relevance: Emphasized the Finance Commission’s role in maintaining fiscal federalism, ensuring states are not financially handicapped.
3. R. K. Garg v. Union of India, (1981) 4 SCC 675
Relevance: Though this case dealt with economic legislation, it supported the principle that financial recommendations must respect constitutional mechanisms, including the role of the Finance Commission.
4. Bhaskar Shrachi Alloys Ltd. v. Union of India, (2002)
Relevance: Recognized that the distribution of financial resources must follow constitutional procedures including recommendations by the Finance Commission.
📊 Functions of the Finance Commission under Article 280
| Function | Explanation |
|---|---|
| Tax Distribution | Recommends how taxes collected by the Centre are to be shared with States (vertical and horizontal devolution). |
| Grants-in-Aid | Suggests grants to States needing additional assistance. |
| Debt Relief | May suggest ways to manage or restructure State debts. |
| Performance-Based Incentives | Recommends incentives for fiscal discipline, population control, etc. |
| Other Referrals | Handles any matter referred by the President related to finance. |
✅ Summary Table
| Feature | Detail |
|---|---|
| Article | 280 |
| Constitutional Body | Finance Commission |
| Constituted by | President of India |
| Term | Every 5 years (or earlier) |
| Total Members | 1 Chairman + 4 members |
| Main Functions | Revenue sharing, grants-in-aid, fiscal recommendations |
| Key Case Laws | Union of India v. Bihar (1964), Karnataka v. Union of India (1978) |
🔄 Comparison: Finance Commission vs GST Council
| Feature | Finance Commission | GST Council |
|---|---|---|
| Article | 280 | 279A |
| Focus | Overall fiscal federalism | GST-related decisions |
| Advisory? | Yes | Binding (in many aspects) |
| Members | Experts + Chairperson | Union & State Ministers |
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