This article is written by Divya Raisharma, an undergraduate student at Government Law College, Mumbai. This article explains Article 27 of the Indian Constitution. It explains the freedom given under Article 27, its elements when the article is violated, and the correlation it has with secularism and freedom of religion. It also mentions the Constituent Assembly Debate on Article 27, relevant case laws and the frequently asked questions (FAQs).
It has been published by Rachit Garg.
Article 27 is a fundamental right in Chapter III of the Indian Constitution. It is listed under the heading of ‘Freedom of Religion.’ It gives citizens the fundamental right to not be compelled to pay taxes by the state, which would promote a particular religion or religious denomination. This right, in a way, protects the ‘freedom of conscience under Article 25 of the Constitution. It consists of four elements of importance, i.e., – person, tax, promotion, or maintenance of a religion or religious denomination.
What is the freedom enshrined under Article 27 of the Indian Constitution
Under Article 27 of the Indian Constitution, a person can not be compelled to pay tax, proceeds of which would be used to pay for the expenses incurred on the promotion or maintenance of any particular religion or religious denomination.
Generally, tax is a compulsory obligation and liability of the taxpayers. But, this article frees a person from the obligation of paying any tax in case such tax funds would be used for the promotion or maintenance of any religion or religious denomination.
For example: If a state imposes a tax for the promotion of the Hindu religion, it would be entirely lawful for a person to refuse to pay such a tax.
Elements of Article 27 of the Indian Constitution
Definition of person
The meaning of the word ‘person’ in legal use differs greatly from its meaning in ordinary use.
As per the Oxford dictionary, the word ‘person’ means an individual human being. But, when the same word is used in a legal text, we refer to the definition provided by the taxation statute of the General Clauses Act, 1897.
Hence, if the said tax is a tax under the Income Tax Act,1961, it would be necessary to refer to the definition of ‘person’ under the Income Tax Act. In case the statute does not define the term ‘person’, only then the definition mentioned in the General Clauses Act must be referred to.
As per the General Clauses Act, the term ‘person’ means:
- An individual;
- A company, whether incorporated or not;
- A body of individuals, whether incorporated or not; and
- An association, whether incorporated or not.
As per the Income Tax Act, 1961, the term ‘person’ means:
- An individual;
- A company;
- A Hindu undivided family;
- A firm;
- An association of persons, whether incorporated or not;
- A body of individuals, whether incorporated or not;
- A local authority; and
- An artificial juridical person.
Whereas, under the Central Goods and Services Act, 2017, a ‘person’ means:
- An individual;
- A Hindu undivided family;
- A company;
- A firm;
- A Limited Liability Partnership;
- An association of persons;
- A body of individuals, whether incorporated or not, in India or outside India;
- A trust;
- A local authority;
- Central or State Government;
- A society under the Society Registration Act, 1860;
- An artificial juridical person;
- A co-operative society;
- A body corporate incorporated under the laws of a foreign country;
- Any government company, as defined under the Companies Act, 2013; and
- Any company established under a State Act or Central Act.
As per the Oxford dictionary meaning, the term ‘tax’ means a charge imposed by the government upon certain persons for the sake of payment of public services.
The definition of the word ‘tax’ is not provided under the General Clauses Act. Hence, in search of its meaning, the definition assigned under the specific statute must be referred to.
For example, as per the Income Tax Act, ‘tax’ under the Act means the income-tax chargeable under the provisions of this Act. Hence, if the said tax is charged under the Income Tax Act, it is pertinent to refer to the definition provided by the Income Tax Act.
As per The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar Of Sri Shirur Mutt (1954), the essential elements of a tax are as follows:
- It must be enforced as a common burden of taxpayers.
- The purpose of collecting the tax must be for the state’s general revenue.
- The proceeds from such a tax must go to the consolidated funds of the state.
Difference between tax and a fee
It is essential that the contribution levied on a person is ‘tax’ and not a fee. Article 27 does not cover fees levied by the state.
|Purpose||The purpose is levied for general revenue / public interest.||The purpose is levied as a charge for special service rendered (quid pro quo).|
|Compulsion||It is compulsory for all.||It is compulsory to persons rendering the service (they may or may not have a choice in availing of the service).|
|Quantum||The quantum may depend on the person’s capacity.||The quantum is mostly uniform.|
|Funds||The funds go to the consolidated fund of the state.||The funds are earmarked to meet expenses in relation to the service rendered.|
|Reference in a particular list of the Constitution||A reference for tax is made under the Union list and State list.||A reference for a fee is made under the Concurrent List.|
Promotion or maintenance of any religion or religious denomination
The state must have used such tax to promote or maintain any religion or religious denomination. Since India is a secular state, the government must not favour any particular religion or religious denomination.
It is important that the intention of the state is to promote or maintain a particular religion or religious denomination. Hence, Article 27 is not attracted in a case where a state activity has some basis in a particular religion. This would tie the hands of the state in providing food subsidies to poor people just because a religion preaches the same. What the court looks for is the intention of the state behind the activity undertaken. The intent is judged and not the end result.
The definition of the religious denomination can be found in the case of S.P. Mittal v. Union of India (1982). The Supreme Court of India has defined a religious denomination as ‘a religious sect or body having common faith and organisation and designated by a distinctive name.’
This definition can be broken down as follows:
- A religious body
- Of common faith
- Having a distinctive name
For example, the Shia sect and the Sunni sect in the Muslim religion.
When is Article 27 violated
Article 27 is violated when:
- There is a tax;
- Such tax’s proceeds would go towards the promotion or maintenance of a particular religion or religious denomination;
- A person is being compelled to pay such a tax; and
- The dominant purpose of the state behind levying such a tax is to intentionally and directly promote or maintain any particular religion or religious denomination.
Article 27 and secularism
Secularism is where the state endorses no religion as the state’s religion. A secular state should not give any preferential treatment to any particular religion. Many articles in the Constitution can be identified as articles making the Constitution secular. Article 27 is one of them.
Though Article 27 does not give the fundamental right to secular taxation laws, it undoes the legal compulsion to pay tax if the proceeds of it will be used for the benefit of a particular religion or religious denomination. It removes the compulsion to pay that otherwise would exist. It takes away the statutory liability on such unpaid tax amounts.
As per The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar Of Sri Shirur Mutt, the Supreme Court has declared the use of public funds for the promotion or maintenance of any particular religion or religious denomination to be against the Constitution. This is an effective prohibition on biased taxation laws by the state.
When the emphasis is put on the term ‘particular religion’ of Article 27, it would be wrong to say that government aid to all and every religion is allowed by the Constitution. To understand this, It is important to look at other articles under the heading of ‘Freedom of Religion.’Article 28 prohibits religious instruction in wholly government-funded educational institutions. Hence, the above interpretation is fully contradictory to the wordings of Article 28. It would also violate Article 25 as the freedom of conscience includes the freedom to not follow or believe in any religion. Hence, government aid benefitting every religion would violate the rights of atheists and agnostics.
Any interpretation of the term ‘specifically appropriated’ in Article 27 would not affect secular state actions, which, when performed in a religious institution, indirectly benefit the religion of the institute. For example, a government’s aid to an educational institute which imparts religious instructions to willing students is not violative of Article 27.
Hence, the secularism in Article 27 is neither anti-religion nor pro-religion. Just as the ideals of Indian secularism, the secularism in Article 27 synergies the state activities and religion.
Article 27 and freedom of religion
As per The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar Of Sri Shirur Mutt case, religion is a system of belief regarded by those who profess that religion to be conducive to their spiritual well-being.
Freedom of religion means the freedom to practice one’s religion or conscience without unreasonable restrictions. Article 27 is a fundamental right under the heading of ‘Freedom of Religion’.
On reading, Article 25 gives us the freedom of conscience, that is, the freedom to follow our conscience. Hence, if a person’s conscience suggests not to follow a particular religion, it is a right as per the Constitution. It also means, in a sense, the right to not be compelled to foster a particular religion or religious denomination. Article 27 is supportive of this interpretation of Article 25. As a person is not to be compelled to pay tax benefitting any religion, atheists’ right to their freedom of conscience is protected.
Under Article 25, the state is not prevented from regulating any secular activity which may be associated with religious practice. For example, the secular activity of regulating religious institutes for the purpose of better administration is allowed. When this statement is read with Article 27, we can also conclude that any tax imposed on the secular administration of a religious institute will not violate Article 27. This view is also upheld in the case of The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar Of Sri Shirur Mutt.
Constituent Assembly debate on Article 27 of the Indian Constitution
During the constituent assembly debates, some Amendments were proposed to Article 27 by the members of the constituent assembly.
One of the proposed Amendments was by Mr Syed Abdur Rouf, wherein the addition of the words ‘wholly or partly’ was proposed. The said insertion would have made a specific appropriation of taxes, wholly or partially, violative of Article 27. This Amendment was opposed by Shri. M. Ananthasayanam Ayyangar. He deemed the Amendment unnecessary as the Article is sufficient enough to be interpreted as the same.
Another proposed Amendment which was discussed was by Mr Naziruddin Ahmad. He proposed the words ‘the proceeds of which’ to be substituted by the words ‘on any income of which’. He contended that taxes are paid on income and not on gross receipts. This is a different interpretation of Article 27 than the general interpretation. As per the general interpretation, the proceeds from taxes collected should not be used for the promotion or maintenance of any particular religion. But as per Mr Naziruddin Ahmad’s interpretation, the taxes collected from the proceeds/income of an undertaking should not be used for the promotion or maintenance of any particular religion. Mr. Naziruddin Ahmad’s interpretation takes into account only the income tax, while the general interpretation takes into account all kinds of taxes (for example, the goods and services tax levied on the price of the good or service)
Shri Ayyangar stood in the Article’s support. Though he made his comments as a reply to Mr Naziruddin Ahmad, he took a wrongful interpretation of Mr Naziruddin Ahmad’s proposed Amendment. As per him, Mr Naziruddin Ahmad’s proposed Amendment was to exempt the income of all temples and religious endowments. Notwithstanding that, he made an important statement that the Charter of Liberty and religious freedom should see to it that no religious denomination is given an advantage over another denomination.
Shri Guptanath Singh also misinterpreted the Article as an article exempting taxation on religious institutions’ property.
At the end of the discussion, all of the proposed amendments were rejected by the constituent assembly.
Landmark case laws on Article 27 of the Indian Constitution
The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar Of Sri Shirur Mutt (1954)
- The petitioner is the Mathadhipati of the Shri Krishna Math.
- A suo moto proceeding was initiated by the Board under Section 62 of the Madras Hindu Religious Endowments Act (Act II of 1927) (hereinafter referred to as the earlier Act). Under this proceeding, a notice was issued to the Mathadhipati on grounds of mismanagement. It also stated that a scheme is to be framed for the administration of the Math’s affairs in the interest of proposer administration of the Math.
- The petitioner filed the petition in the High Court of Madras, praying for a writ of prohibition to prohibit the Board from taking further steps towards the scheme for the administration of the Math.
- While the petitions were still pending, the Madras Hindu Religious and Charitable Endowments Act, 1951 (hereinafter referred to as the new Act), was passed by the Legislature. The Act came into force on the 27th of August, 1951.
- In view of the earlier Act being replaced by the new Act, the petitioner was allowed to end his petition.
- After this, the petitioner questioned the constitutionality of the new Act.
- In view of the above matter, the Madras High Court pronounced several Sections of the new Act to be unconstitutional as they violate the fundamental rights of the petitioner guaranteed under articles 19(1)(f), 25, 26, and 27 of the Constitution.
- The Commissioner came to appeal before the Supreme Court of India against the Madras High Court judgement.
- Whether the Contribution levied under Section 76 of the Madras Hindu Religious Endowments Act a tax or a fee?
- Whether such contribution violates Article 27?
Before announcing the verdict, the Supreme Court made some important observations:
- Tax is a compulsory and enforced common burden on the taxpayer. Its imposition is made without bestowing any special benefit to the payer. it is levied for the purpose of general revenue. The quantum of tax payable mostly depends on the capacity of the payer.
- A ‘fee’ is generally defined as a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the government on account of the process of rendering the special service.
- An example of fee is when money is set aside and appropriated specifically for the performance of some work, and it is not merged into the public revenues. In that case, it can not be a tax.
- The State might consider it desirable to provide some special service to certain groups of people in the larger interest of the public. Then, those people must accept these services, whether they are willing to receive these services or not.
The Supreme Court of India held that:
- The contribution that has been levied under Section 76 of the Act shows characteristics similar to income tax as:
- It depends upon the payer’s capacity and not upon the quantum of benefit that is supposed to be conferred.
- The institutions that come under the lower income group and have an income of less than rupees one thousand annually, are excluded from the liability to pay the additional charges under clause (2) of the Section.
- All the collections from Section 76 go to the state’s consolidated fund.
- All the related expenses are met out of the general revenues as seen for in other government expenses. The expenses are not met out of the collection from Section 76.
- The money raised by the contribution levy is not ear-marked for the government’s expenses to perform the services.
- The contribution under Section 76 is a tax.
- The object of the contribution under Section 76 of the new Act is the proper administration of religious institutions and the endowments attached to the religious institutions.
- Hence, Article 27 is not violated.
Mahant Sri Jagannath Ramanuj Das v. The State Of Orissa (1954)
- In 1939, the Orissa Hindu Religious Endowment Act (further referred as ‘the earlier Act’) was passed.
- Every Math or temple with an annual income of more than Rs. 250 crores were required to pay an annual contribution at a certain progressive percentage of the annual income under Section 49 of the Act.
- The said contribution was used to meet the expenses spent on the administration of the religious endowments.
- Some Mahants challenged the constitutionality of the earlier Act.
- The plea was dismissed.
- When the earlier Act was replaced by the Odisha Hindu Religious Endowments Act of 1951, another plea was submitted challenging the constitutionality of the new act.
- Whether the contribution levied under Section 49 of the Act is a tax?
- Whether Section 49 of the Act is violative of Article 27 of the Constitution?
The Supreme Court held that:
- The contribution levied under Section 49 of the Act is to be regarded as fees.
- The object of the fees levied is the proper and secular administration of the religious institutes. The fees will be used to meet up administrative expenses.
- Article 27 is not violated as the contribution levied is not a tax.
- Article 27 is not violated because the contribution is not used to promote or maintain the Hindu religion.
Mustt. Nasima Khatun v. The State of West Bengal (1981)
- The Commissioner of Wakf, West Bengal served demand notices on the Mutawalli of the Wakf-alal-aulad under Section 59 of the Bengal Wakf Act, 1934 amended by the Bengal Wakf (Amendment) Act, 1973 demanding from them a certain amount towards the contribution of wakf fund and education fund.
- The appellant moved to the West Bengal High Court against these demand notices, and alongside challenged the constitutionality of the Bengal Wakf Act of the year 1973.
- The West Bengal High Court overruled the contentions of the appellant.
- The appellant appealed to the Supreme Court.
Whether the provision of the Bengal Wakf Act violates Article 27?
The Supreme Court held that:
- The contribution to be made under the Act is a ‘fee’, and tax within the meaning of Article 27.
- The purpose of the fee of the wakf fund is to realise secular and proper management of the Wakf property.
- The purpose of the education fund is for the education of poor and meritorious Muslim boys and girls. Education is a secular matter and has no connection to religion.
- The contribution levied is a fee, and such fee would be used for secular purposes. Hence, it was ruled that the Act is not violating Article 27 of the Indian Constitution
K. Reghunath v. The State of Kerala (1974)
- In Tellicherry, some places of worship were destroyed due to some unfortunate circumstances between the two communities, the Hindu community and the Muslim community.
- The government passed an order that:
- The government would bear the cost of the restoration of religious institutions;
- The government will sanction an additional contribution of Rs. 10,00,000/- to the Distress Relief Fund at the disposal of the District Collector, Cannanore, for the purpose of meeting the cost of restoration; and
- The District Collector could sanction expenditure of not more than Rs. 5000/- in each case.
- The petitioner has filed for a writ petition on the above-mentioned order.
- It was prayed by way of a writ of mandamus to direct the State of Kerala and the District Collector to refrain from spending public funds on the reconstruction of public funds.
Whether the above-mentioned order violates Article 27?
The Supreme Court held that:
- The Distress Relief Fund is not appropriated from tax money as it is made up of contributions from the government, district and taluka committees, associations, clubs, public, etc.
- Restoration of the damaged places of worship is not the promotion or maintenance of any religion.
- The writ petition was dismissed.
Prafull Goradia v. Union of India (2011)
- The Haj Committee Act provides for granting of a government subsidy for the Haj pilgrimage every year.
- The petitioner contended that a part of the direct and indirect taxes he pays goes towards the Haj pilgrimage subsidy.
- The petitioner speaks of the violation of Article 27 by provision of subsidy to Haj pilgrimage.
Whether the Haj Committee Act violates Article 27 of the Indian Constitution?
The court held that
- Article 27 is attracted in
- General statutes (such as the Income Tax Act) do not specify the utility, but a substantial portion is utilised for a particular religion; and
- Specific statutes where it states that the tax levied will be utilised for a particular religion.
- If only a relatively small part of any tax collected is utilised to provide some conveniences, facilities, or concessions to any religious denomination, that would not be violative of Article 27 of the Constitution.
- Only when a substantial part of the tax is utilised for any particular religion that Article 27 would be violated.
- Since there is no substantial utilisation of tax collected by way of direct and indirect taxation, There is no violation of Article 27.
Article 27 protects the freedom of religion from the misuse of tax laws by the state. It is important that the freedom of religion applies not only in the sphere of religious activities but also in the financial sphere. Since money runs the world, it is essential that the intersection of finance and religion is not ignored.
The article also gives people the power to take a stand for secularism. As an act of united demonstration, the refusal to pay taxes which would promote a religion can be a tool of political pressure on the state. It can be used to send the state a message of withdrawal of support or loss of trust from the people in the event of a biased religious agenda of the State.
Frequently Asked Questions (FAQs)
Is Article 27 available to non-citizens?
Yes, Article 27 is available to everyone regardless of their citizenship.
Which Article bans the collection of religious taxes?
No article in the Constitution bans the collection of religious tax per se. But the Article which comes closest to it is Article 27. Article 27 bans any compulsion to pay a religious tax.
Is it a violation of Article 27 if I am forced to pay a fee?
No, it is essential that the contribution levied is a tax and not a fee. Hence, no one can seek violation of Article 27 if forced to pay a fee.
Is it a violation of Article 27 if private parties force me to pay donation money for the organisation of religious events?
No, a violation of Article 27 occurs only when the Union government or the state government of India imposes a tax. The fundamental rights are available only against the state. Any use of force by private parties to pay donations which would be used to promote a particular religion, as seen during the Ganesh Chaturthi festival, will not violate Article 27.
Can I be forced to pay a tax that would promote the religion I follow?
No one can be forced to pay a tax that would promote a religion, even if the taxpayer follows the same religion. It is a well-established judicial principle that Article 27 applies even if the person paying the tax belongs to the religion which would be promoted by such a tax.
- DD Basu: Commentary on the Constitution of India, 9th ed, Vol 6
- MLJ: Civil Court Manual Volume 10
- MP Jain: Constitution of India
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