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RELATIONS BETWEEN THE UNION AND THE STATE
(Arts. 245 to 293)
QUESTION BANK
Q.1. Examine the legislative relations between the Centre and the State.
Q.2 Discuss fully the provisions regarding the administrative relations between
the Union and the State.
SHORT NOTES
Doctrine of pith and substance.
.
1.
2.
3.
4.
Borrowing by States.
State list.
Concurrent list.
5. Union list.
6. Administrative Relations.
SYNOPSIS.
A. Legislative Relation [Art. 245-255].
1.Territorial Jurisdiction [Art. 245].
2. Subject wise Jurisdiction [Art. 246].
-
-
-
List –I-, The Union List.
List –II-, The State List.
List-III-, The concurrent List.
The Residuary powers [Art. 248].
Principles of interpretation of Lists-
1. Pre-dominance of the Union List
2. Each-entry to be interpreted broadly.
3. The Doctrine of pith and substance.
4. The Doctrine of Colourable Legislation.
B. Administrative Relation [Art. 256-263].
-
Control of Union over State.
1. Direction by Centre to State [Art.256].
2. Delegation of Union function to the State.[Art. 258].
3. All India services [Art. 312].
4. Grant in aid.
5. Dispute relating to water [Art. 262].
C. Financial Relations [Art. 264 to 293].
NOTES.
“Law Master’s Publication” “Relations between Union and States” Prof. Santosh D. Bhosale 142
1. Finance Commission.
2. Planning commission.
3. Borrowing by Centre and State.
The basic principle of federalism is that the Constitution divides the legislative,
executive, and financial powers between the Centre and the States. The power is
concentrated in one body in the Unitary form of Government. There may or may
not be a State Government. However, in federalism, it is very important to lay
down an accurate scheme of distribution of powers between the Central and the
State Governments to avoid conflicts. Therefore, it is important to study Centre-
State Relations in the federal Constitution. The relations envisaged in the
Constitution are of Cooperative federalism.
A. Legislative Relations (Art. 245-255):-
The division of legislative functions between Centre and State
is two-fold, i.e., territory-wise and subject-wise.
1. Territorial Jurisdiction of Legislature (Art. 245):-
The Parliament is empowered to make laws for the whole or any part
of the territory of India. Similarly, the State legislatures are empowered to make
laws for the whole or any part of the State (Art. 245 (1)). The law made by
Parliament is not invalid merely because it has extra-territorial operation (Art. 245
(2)). However, state law, which has operations outside the state, is not valid. To
determine whether the law passed by the state legislature has extra-territorial
operation or not. the principle of ‘territorial nexus’ is to be invoked. It provides
“Law Master’s Publication” “Relations between Union and States” Prof. Santosh D. Bhosale 143
that the State law having the extra-territorial operation is valid if there is a
sufficient connection between the State and the object of passing the law.
Facts: Bombay State levied a tax on lotteries and prize competitions in
Newspapers. The tax was extended to a newspaper printed and published in
Banglore (Karnataka State) but with wide circulation in Bombay.
S.C. Held:-that a sufficient territorial nexus exists to enable Bombay State to tax
the newspaper.
2. Subject-matter-wise jurisdiction:-
Art. 246 lists the subject-matter-wise distribution of powers between the
Union and the States. Art. 247 provides for Schedule VII in the Constitution; there
are three Lists, viz.- the Union List, the State List, and the Concurrent List.
List-I- The Union List: -
List-I- The Union List comprises 97 subjects, matters, or items. The subjects
mentioned in the Union List are of national importance and require the Union
Parliament to pass laws on them. It contains subject matters: defence, foreign
affairs, banking, currency and coins, railway, postage, Union taxation, etc. The
Parliament has exclusive power to make laws on any of these 97 subjects
mentioned in the Union list.
List-II- The State List:-
The State list consists of 66 subjects. These subjects are of local
importance and, therefore, require the State to make laws on them. These subjects
are public health and sanitation, agriculture, forest, fisheries, education, State
Taxation, maintaining law and order, etc. The State has the exclusive power to
make laws on any subject mentioned in the State List.
List III- Concurrent List: -
It consists of 47 subjects. Both the Centre and the State can make laws
on the subjects mentioned in the concurrent list. But in case of a conflict between
laws passed by the Center and State on the concurrent list subject, the law passed
by the Center shall prevail. (Art. 254 (1)).
The Residuary power (Art. 248): -
The Parliament has exclusive power to pass laws with respect to any new
matter not mentioned in either of these lists (Art. 248 and Entry 97 of the Union
list). So a subject like cybercrime (i.e. computer), a new one ((i.e. not mentioned
in either of these lists) empowers Parliament to make law on it.
1
AIR. 1957 SC 699.
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Principles of Interpretation of the Lists: -
Though legislative powers are divided between the Centre and the
States, it is not a scientific division. Questions usually arise as to whether a
particular subject falls in the sphere of the Union or the State Government. It is the
duty of the Supreme Court to solve this problem. Therefore, to solve the above
problem, the Supreme Court has evolved the following rules. -
1.
Predominance of the Union list: -
This rule states that the Union list predominates the State and concurrent
list. The concurrent list predominates over the State list. Thus it establishes the
predominance of the Union list.
2.
Each entry is to be interpreted broadly:-
Subject to the overriding predominance of the Union list, an entry in the
Concurrent List should be interpreted broadly. The ‘widest possible’ and “most
liberal” interpretation should be given to the language of each entry.
Bombay High Court has held that the entries given in lists of Sch-VII are legislative
heads. Therefore, these entries should be liberally and widely interpreted. Not only
main matters but any incidental or ancillary matters are also to be included in the
entry field.
3.
The Doctrine of pith and substance:-
If the law passed by one Legislature encroaches upon the field assigned to
the other, the court will apply the doctrine of pith and substance to determine
whether the legislature concerned is competent to make that particular law. If the
pith and substance (i.e., the true object of the legislation) relate to the matter within
the competence of the legislature which enacted the controversial law, such law is
to be treated as valid and within the competence of the legislature that made it,
even though it might incidentally encroach upon other legislature’s competence.
In order to ascertain the true character of the legislature, the court should
2
(AIR 2006 (NOC) 901 (Bom)).
3
Sharat Hydro Power Corpn. Ltd. v. State of Assam. (2004 AIR SCW 2308 (A)).
Supreme Court Observed- that, in a federal Constitution, in which there is a division of legislative powers
between the Central and the Provincial Legislatures controversies often arise as to whether one or the other
legislature is not exceeding its legislative power and encroaching on the other’s constitutional legislative
power. To examine whether a legislation has encroached in the field of’ other legislatures, in fact or in
substance, or is incidental, keeping in view of the true nature of the enactment, the Courts have evolved the
doctrine of “pith and substance” for the purpose of determining whether it is legislation with respect to
“Law Master’s Publication” “Relations between Union and States” Prof. Santosh D. Bhosale 145
Facts- The Bombay Prohibition Act, which prohibited the sale and possession of
liquor in the State was challenged on the ground that it incidentally encroached
upon “the import and export of liquor across the customs frontier,” – which is the
Central subject. It was contended that the prohibition on the purchase, use,
possession , and the sale of liquor would affect the import of liquor, which is a
Central subject.
Held:- The Act is valid because the pith and substance of the Act fall under the
State List and not under the Union List, even though the Act incidentally has
encroached upon the Union List.
4.
The Doctrine of Colourable Legislation: -
The doctrine of ‘colourable legislation’ is based on the maxim ‘what cannot
be done directly, cannot also be done indirectly’. The doctrine becomes applicable
when a legislature seeks to do something indirectly that it cannot do directly. The
doctrine thus refers to the question of the legislature's competence to enact a
particular law. In other words, although, apparently, a legislature in passing a
statute purports to act within the limits of its power yet, in substance and in reality,
it has transgressed these powers by taking resort to a mere pretense or disguise.
It is the only case where a law has been declared invalid based on colourable
legislation. In this case, the Bihar Land Reforms Act of 1950 was held void on the
ground that, though apparently, it purported to lay down a principle for
determining compensation yet, in reality, it did not lay down any such principle
and thus indirectly sought to deprive the petitioner of any compensation.
B. Administrative Relations (Art’s. 256 to 263):-
In the federal government, the problem often comes to the distribution of
administrative powers between the centre and the states. The Union Government
is responsible for maintaining peace and order in the country. Therefore,
cooperation and coordination between the Centre and the State administrative
matters in one list or the other. Where the question for determination is whether a particular law relates to
a particular subject mentioned in one list or the other, the Courts look into the substance of the enactment.
Thus, if the substance of enactment falls within Union List then the Incidental encroachment by the
enactment on the State List would not make it invalid. This principle came to be established by the Privy
Council, for applying the principle of “pith and substance’ regard is to be had (1) to the enactment as a
whole, (ii) to its main objects and (iii) to the scope and effect of its provisions.
4
AIR. 1951 SC 318.
5
AIR. 1952 SC 252.
“Law Master’s Publication” “Relations between Union and States” Prof. Santosh D. Bhosale 146
authority become important. In an emergency, the central Government exercises
complete control over the State and its functions as if it were a unitary system.
Control of the Union over the State: -
Art 256 to 263 provides for the Union's control over the State even in normal
times through the following ways:-
1.
Direction by the Centre to the State (Art. 256):-
The Parliament and the executive power of the Union extend to giving such
directions to a State as it deems essential for the purpose (Art. 256).
If such directions are not abided by the State, the President can adopt
coercive sanctions against the State, including sanctions mentioned under Art. 356
(i.e., declaring an emergency on the failure of Constitution machinery)
2. Delegation of Union’s functions to the State (Art. 258):-
Parliament can delegate its functions to the State or use State machinery,
even without the State Government’s permission, to enforce the Union law in the
State.
3. All-India Services (Art. 312):-
Besides the separate services for the Union and the States, the Constitution
creates an additional “All India Service” common to both the Union and the State.
It is to ensure greater inter-State coordination. Two main All-India services are the
‘Indian Administrative Services’ and the ‘Indian Police Services’.
4. Grant in aid:-
The Constitution provides limited financial resources to the State. The State
depends upon the Centre for grant-in-aid to carry out its welfare activities. These
grants are allotted upon certain conditions. If these conditions are not fulfilled, the
Centre may withdraw grants. In this way, the Centre exercises strict control over
the States.
5. Dispute Relating to water (Art. 262): -
Parliament is empowered to adjudicate upon any dispute relating to the
distribution or control of water of inter-state rivers and river valleys.
C. Financial Relations (Arts. 264 to 293):-
A finical autonomy should exist for the smooth and successful conduct of
legislative and executive relations. Revenue is distributed between the Union and
the States. The State possesses exclusive jurisdiction over taxes enumerated in the
State list, and the Union is entitled to the proceeds of the taxes mentioned in the
Union list. The concurrent list includes no taxation entries. However, some of the
taxes in the Union list may be allotted wholly or partially to the States.
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NOTES.
1. Finance Commission (Art. 280): -
(a) Its Composition:-
Art. 280 provides that the President shall, within two years from the
commencement of the Constitution and thereafter at the expiration of every fifth
year or at such earlier time as he considers necessary, constitute a Finance
Commission. The Finance Commission shall consist of a chairman and four other
members appointed by the President.
(b) Qualification: -
The Chairman of the Commission shall be selected from amongst persons
who have had experience in public affairs. The other four members shall be
selected from amongst persons who: -
1.
2.
3.
4.
are or have been qualified to be appointed as a Judge of the High Court or
have special knowledge of the finance and accounts of the Government or
have had wide experience in financial matters and in administration or
have special knowledge of economics.
(c) Duties of the Finance Commission: -
It shall be the duty of the Commission to make recommendations to the
President as to-
a.
the distribution between the Union and States of certain taxes (which are
provided to be distributed between the Centre and the States as enumerated in the
Union List).
b.
The principles which should govern the grant-in-aid of the revenue to the
State out of the consolidated fund of India.
c.
Measures are needed to augment the consolidated fund of the State to
supplement the resources of the Panchayats in the State.
d.
the resources of the state's municipalities.
e. Any other matter referred to the Commission by the President in the interest
of sound finance.
The Commission shall have all the powers of the civil court in respect of
Measures are needed to augment the state's consolidated fund to supplement
summoning and enforcing the attendance of witnesses, requiring the production of
any document, and requiring any person to furnish information that the
Commission thinks to be useful and relevant.
***
2)
Planning Commission:-
“Law Master’s Publication” “Relations between Union and States” Prof. Santosh D. Bhosale 148
India is an economically underdeveloped country. It has limited resources,
whereas the demands for development are greater; hence, it becomes necessary
that planned efforts be made to use the available resources to achieve maximum
effect. This, therefore, leads to the planning and formulation of five-year plans.
The Constitution has not made any provision for establishing a planning
commission; however, the “Directive Principals” obligate the central and the State
Governments to play a creative role in promoting the socioeconomic welfare of
the people.
(a) Its Composition:-
Though the Constitution did not establish planning machinery, in
1950, the Government of India established the Commission with the Prime
Minister as its Chairman. The Commission has a few central ministers and some
non-official experts as members. There is no State representative on the
Commission.
(b) Functions/ Role of commission: -
The Role of the Commission is advisoryIt makes recommendations to the
Central Government and the National Development Council. These bodies are
responsible for making final decisions, and the Central and State Governments are
responsible for implementing the plan.
Close cooperation exists between the Commission and the Central
Government to supervise the planning results and suggest measures from time to
time. The Prime Minister heads both these organs. In addition, other Central
Ministers are invited to the Commission’s meeting from time to time when matters
concerning their department are being discussed. Likewise, the Commission
members may attend Central Cabinet meetings when economic matters are being
discussed.
***
3) National Development Council:-
Planning in India is unified and comprehensive because it deals with both
central and State subjects, it, therefore, becomes necessary to give participation to
the States in the planning process. Therefore, in 1952, the National Development
Council was established, consisting of the Prime Minister, Chief Ministers of all
States and the representatives of the Union Territories and members of the
planning commission.
Its Functions: -
The functions of the council are as follows-
“Law Master’s Publication” “Relations between Union and States” Prof. Santosh D. Bhosale 149
1.
To strengthen and mobilise the nation's efforts and resources to support the
plans.
2.
To promote common economic policies in all vital spheres.
To ensure the balanced and rapid development of all parts of India.
Review the plan's workings from time to time.
3.
4.
5.
To consider the important questions of social and economic policy affecting
national development and to recommend measures to achieve these objectives.
Difference Between the Planning Commission And Finance Commission:-
1. A Finance commission is a body Constituted under the Constitution.
Whereas the Planning Commission is a non-constitutional body. The
administrative discretion of the Central Government creates it.
2. A planning Commission greatly influences economic decisions made by
various Governments. The State Government gets a central grant on the
Commission’s advice.
The Finance Commission, through a Constitutional body, is not as
important as the Planning Commission.
****
4)
Borrowing power of Centre and State (Art.292 and 293):-
Art. 292 deals with the power of the Union and States of borrowing.
1. Power of the Union to Borrow (Art. 292):-
The Union has unlimited powers to borrow money from within or outside
the country to secure India's consolidated fund. Furthermore, the Union
Government can borrow within such limits as may be fixed by the Parliament from
time to time.
2. Powers of the State to Borrow (Art. 293):-
Subject to any limitation fixed by the state legislature, the state government
can borrow money within India's territory. Moreover, the Government of India
may extend a loan to the State under the law passed by the Parliament. However,
if a loan or any part thereof remains outstanding, no fresh loan can be raised by the
State without the consent of the Central Government.
*****