Article 27 of the indian constitution

Article 27: The Constitutional Guardrail Between Tax and Religion

Article 27 of the Indian Constitution is a concise yet powerful provision that serves as a key fiscal pillar of Indian secularism.¹ Nestled within the Right to Freedom of Religion, it protects individuals from being forced to financially support any particular religion through the mechanism of taxation.² This article ensures that the State, in its capacity as a tax-levying authority, remains neutral and does not use public funds, collected coercively from all citizens, for the promotion or upkeep of any single faith.³ Its interpretation by the judiciary has created a crucial distinction between a ‘tax’ and a ‘fee’, a concept that defines the boundary of State-religion financial interactions.

The Core Principle: No Compulsion to Pay Religious Taxes

“Freedom as to payment of taxes for promotion of any particular religion.— No person shall be compelled to pay any taxes, the proceeds of which are specifically appropriated in payment of expenses for the promotion or maintenance of any particular religion or religious denominatio⁴n.”⁵

The essence of this article is straightforward:

• It confers a right on every person, not just citizens, to refuse to pay a tax if the money collected from that tax is specifically earmarked to be spent on promoting or maintaining a particular religion.⁶
• It acts as a prohibition on the State, preventing it from imposing a religiously-motivated tax.⁷

The historical context for this provision is rooted in pre-colonial and colonial practices where rulers would sometimes levy special taxes, such as the jizya, on subjects of other faiths.⁸ The framers of the Constitution were determined to ensure that the new Indian republic would not engage in such discriminatory practices and that the public exchequer, funded by a diverse populace, would not be used to favour any one religion over others.

The Decisive Distinction: Tax vs. Fee

The most critical aspect of Article 27’s jurisprudence is the distinction it makes between a “tax” and a “fee.” The Supreme Court has clarified that the prohibition in Article 27 applies only to taxes, not to fees. But what is the difference?

1. A Tax: A tax is a compulsory exaction of money by a public authority for public purposes, enforceable by law.⁹ It is a common burden imposed on the public, and the taxpayer receives no direct, specific service or benefit in return for paying it. The money collected through taxes goes into the general revenue of the State and is used for the collective good, such as defence, infrastructure, and public health.
2. A Fee: A fee, on the other hand, is a charge levied for a specific service rendered.¹⁰ It is based on the principle of quid pro quo (something for something). The money collected as a fee is generally set aside to cover the expenses of providing that particular service, and it is not merged with the general revenue.

This distinction was masterfully explained by the Supreme Court in the landmark case of The Commissioner, Hindu Religious Endowaments, Madras v. Sri Lakshmindra Thirtha Swamiar of Shirur Mutt (1954).¹¹ In this case, the Madras government levied an “annual contribution” on religious institutions to meet the expenses of the government-appointed commission that administered them.¹² The Court had to decide if this contribution was a tax (prohibited by Article 27) or a fee.

The Court held that since the payment was levied to meet the cost of secular administrative services provided by the government to the religious institutions, and not for the promotion or maintenance of the religion itself, it was a fee, not a tax.¹³ Therefore, it was not barred by Article 27. This principle has been consistently followed. For example, a fee charged to pilgrims to provide special arrangements like sanitation, security, and health services during a pilgrimage is constitutionally valid as it is a charge for services rendered, not a tax to promote religion.

Contemporary Relevance: The GST and Haj Subsidy Debates

Article 27 continues to be relevant in modern fiscal debates.

• Goods and Services Tax (GST): Questions have been raised about whether the levy of GST on certain services provided by religious institutions violates Article 27. For instance, GST may be applicable on the renting of community halls within a temple precinct for commercial events. The legal consensus is that such a levy is not a violation. GST is a broad-based, secular tax on the supply of goods and services.¹⁴When a religious institution engages in a commercial activity, it is treated like any other service provider, and the tax is levied on that secular transaction, not for the promotion of religion.
• Government Grants and Subsidies: Another area of debate has been government expenditure on religious activities, such as the erstwhile Haj subsidy. In Prafull Goradia v. Union of India (2011), the Supreme Court addressed this issue.¹⁵ It clarified that Article 27 prohibits the levy of a tax to promote a religion, but it does not prohibit the expenditure of general tax revenue (which is not specifically collected for this purpose) on religious activities, as long as the State treats all religions with equality. The Court observed that if the State makes provisions for one community, it must make similar provisions for others. However, it also directed the government to progressively phase out the Haj subsidy.¹⁶

Conclusion: Upholding State Neutrality

Article 27 is a vital, albeit narrowly tailored, provision that reinforces the secular character of the Indian State. It acts as a constitutional guardrail, preventing the State from using its coercive power of taxation to favour or fund any particular religion. By establishing a clear, judicially-enforced distinction between a prohibited tax and a permissible fee, it allows the State to regulate the secular aspects of religious institutions without infringing upon the core principle of religious neutrality. It ensures that no citizen is forced to become an unwilling financial contributor to a faith they do not profess, thereby upholding both freedom of conscience and the financial integrity of the secular republic