Legislative Relation between the Union and States

Legislative relation between Union and States have been discussed in the Constitution from Article 245 to Article 255. The relations between the Centre and State have been divided into two aspects i.e., Territorial Jurisdiction and Subject Matter Jurisdiction. Territorial Jurisdiction means who can make the law applicable over a certain and specific territory while subject matter jurisdiction includes matters that would be subject to law-making, such as agriculture, electricity, water projects etc.


Article 245 provides that the parliament has the power to make laws for the entire territory of India, or for some part of it. It also provides that the state legislature has the power to make laws for the entire territory of that state or any part of the territory of that state. In addition to that it also includes extra-territorial operation, which refers to the power that parliament possesses to make laws. It does not mean that the parliament can make laws only for people residing in India or their property. Parliament also possesses extraterritorial jurisdiction over those persons or those properties situated outside India. This extraterritorial power is only possessed by the Parliament, and not by the state but in cases, where Parliament makes extraterritorial laws for persons residing outside India and their property. 


The test of Territorial Nexus finds relevance in this regard. In Wallace vs. Income Tax Commissioner[1], a company, registered in England, was a partner of an Indian firm. Indian Tax authority wanted to tax the entire income of this company. It was held that since the major income of this company comes from India, the Indian tax authority has the power to tax that income. So, the territorial nexus test says that, if the parliament wishes to make an extraterritorial law and the subject matter of such law is to be governed, there must be a reasonable connection between both.


Parliament does not enjoy absolute lawmaking power. Article 245 provides three exceptions to it’s powers: 

1) The first exception is provided under Article 240, as per which, with regards to the four union territories i.e., Dadra and Nagar Haweli, Daman and Diu, Andaman and Nicobar Islands and Lakshadweep Island the President has power for their peace, Progress and Good Governance. He can make regulations. The power of the President to make regulations extends to amending, modifying, and repealing the laws of parliament.

2) The second exception is provided under the 5th schedule, where scheduled areas are covered. This exception says that the governors of these respective States have powers that, at any point of time they can declare that in these tribal areas, laws of Parliament shall not apply.

3) The third exception is that of the 6th schedule, the State of Assam,  Mizoram,  Meghalaya, Tripura, the tribal areas of these states. The sixth schedule says that the governors of these states  at any point of time say that the specific laws of parliament will not be applied in these areas, or that they should be modified or amended.



Subject matter legislation referring to who has power, with regards to which subject matter to make laws. The power that centre and state have been categorized by 7th schedule in 3 lists:


Union list includes all those things which are of national importance like defence, atomic energy etc. So, there are a total of 100 items in the Union list. Parliament has the exclusive right to make laws related to these items.


Similarly, these items are covered in State lists, which are of local importance or regional importance. Example- agriculture, police,  prisons, all these things. So in the State list, there are a total 61 such items, and the state has exclusive power to make laws related to these items.


Third is List III known as Concurrent list, it contains such 52 items, in relation to which State and the Union both can make laws.


At this point, we will talk about two articles:

  • Firstly, we have Article 246, which says that whatever articles are there in List I and List II, parliament can make laws on any of them.
  • Secondly, we have Article 248, which is also known as residuary power. Article 248 says that, if a new subject matter or item comes up,  which has not been covered in any of these three lists and it is required to make a law on that. So that residuary power (to make law on such matters) lies with the union.

Generally, a law is made upon the subject matter but in case of conflict, Union list is greater than Concurrent list, Concurrent list is greater than State list. If there is a conflict in Union list or State list, then Union list will prevail, if there is a conflict between concurrent list and State list, Concurrent list will prevail.

Normally, this subject matter arrangement is followed but, this arrangement may be changed in some extraordinary circumstances, these are:

  1. First, at the time of National Emergency or President’s rule, Parliament gets the power to make law on any subject matter from the state list.
  2. Second, when Rajya Sabha feels that there is a subject matter in the state list which is of national importance and parliament should make a law on that, then Rajya Sabha can pass a resolution and then parliament can make a law on that. 
  3. The third is,  on the request of the State, if two or more state legislatures request the parliament that on a particular subject matter, parliament should enact the law then parliament can do that.
  4. Fourth is for the purpose of implementing International agreements for fulfilling them,  parliament can make law on any subject matter of the state list.


In the Federal form of government, division of power between the Centre and State, it is an essential feature of our Constitution. So, the Centre and State both have their own subject matters to make laws but, there are many situations where centre on state’s subjects or State in Centre’s subject want to make a law. If such a law comes into being. So, to determine this, Courts apply the Doctrine of Pith and Substance.

Prafulla Kumar vs. Bank of Commerce[2], In this case, a moneylender, who used to give away loans to recover them, how much amount can be taken and how much interest can be taken, to regulate that a state regulation “Bengal Money lenders Act, 1940” was passed because moneylending is a state subject. Money lending is listed in List II, Entry 7 but this Act was challenged by the Central Government and said that this Act, also governs promissory notes which is a central subject under List I- Entry 28. To check, if the legislation is valid or not, the court applied the doctrine of Pith and Substance and said, that wherever you want to find out the true nature of any legislation you will see the legislation as a whole meaning. It’s object, it’s scope and its effects, these three, are found out by applying the test of this doctrine. The court said the main nature of Bengal Money Lending Act, is to govern the money lending activities and it is incidentally encroaching upon the matter of promissory note, the Act was held to be valid. Similarly, we have the case of State of Bombay vs. FN Balsara[3], in this case, the law was made regarding the sale, import and possession of liquor. The Bombay Prohibition Act, this state legislation incidentally governing import and export. As well as the import and export was a central subject to determine the validity of the act, the court used the doctrine of pith and substance. And, these acts were held to be valid.


  1. (1948) 50 BOMLR 482.
  2. AIR 1947 PC 60.
  3. AIR 1951 SC 318.


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