The principle that 'no tax shall be levied or collected except by authority of law' is laid down in:

Article 265 says: "No tax shall be levied or collected except by authority of law."

Meaning of Article 265:

• The government cannot impose or collect any tax merely by an executive order; it must be authorised by a law passed by the legislature (Parliament or a State Legislature).
• The law must be valid, that is, made by a competent legislature and not in violation of the Fundamental Rights or any other provision of the Constitution.
• Any tax collected without the authority of law is illegal, and must be refunded.

Historical background:

• The principle "no taxation without representation" has a long history in Britain and the USA.
• In Britain, the Bill of Rights (1689) declared that the Crown could not levy taxes without the consent of Parliament.
• In the American colonies, the slogan "no taxation without representation" was a major cause of the American Revolution.

Importance in India:

• Article 265 protects citizens against arbitrary taxation by the executive.
• It ensures that taxation is subject to the control of the elected representatives of the people.
• The courts have held that the "authority of law" means a valid law, and that a tax can be challenged if the law under which it is levied is invalid.

Related principle on expenditure:

Just as no tax can be levied without law, no money can be withdrawn from the government's main funds except in accordance with a law passed by the legislature (the Appropriation Act).

The budget:

• Every year, the government presents the Annual Financial Statement (the budget) to Parliament.
• The Finance Bill gives legal authority to the taxes proposed in the budget.

Why not the other options?

• ✗Article 268 deals with certain duties levied by the Union but collected by the States; Article 280 with the Finance Commission; Article 300A with the right to property.