India adopts a federal structure of governance, therefore the extent of legislative powers is distributed between the Centre and the States. As per Article 245, Parliament may make laws for whole or any part of India and the legislature of a State may make laws for whole or any part of the State and Article 246 clearly mentions the extent of legislative powers of the Parliament and State governments. Schedule VII of the Constitution has three lists viz: List I (Union List), List II (State List) and List III (concurrent list). The Centre has the exclusive power to legislate over the topics mentioned in List I and the State governments have the exclusive authority to legislate on the subject-matters included in List II. The Concurrent list included those items which can be legislated upon by both the Centre and the States. In this article, we shall discuss the residuary powers of legislation
Demands of a welfare State, development in technology, change in aspirations and expectations of a developing society, the complex world situation with interdependence and hostility among nations necessitate new legislation on some such topics that they could not have been within the contemplation of framers of the Constitution. In such a situation, the subject of legislation may not squarely fall in any specific entry in the three Lists. In such a situation Parliament would have the power to legislate on the subject in the exercise of residuary powers of legislation under Article 248 and Entry 97 of List I. Under the Government of India Act 1935, residuary power of legislation was given neither to the Federal Legislature nor to the Provincial Legislature. It was left to the discretion of the Governor-General to assign these powers to either Legislature.
As was stated in the Constituent Assembly by Jawaharlal Nehru, Chairman of the Union Powers Committee: “We think that residuary powers of legislation should remain with the Centre. In view however of the exhaustive nature of the three lists draw up by us, the residuary subjects could only relate to matters which, while they may claim recognition in the future, are not at present identifiable and cannot, therefore, be included now in the lists.”
According to Article 248 of the Constitution, Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List and such power shall include the power of making any law imposing a tax not mentioned in either of those lists. This article assigns residuary powers of legislation exclusively to the Union Parliament. Entry 97 of Union List also lays down that Parliament has exclusive power to make laws with respect to any matter not enumerated in List II or III. The rationale behind the residual power is to enable the parliament to legislate on any subject, which has escaped the scrutiny of the house, and the subject which is not recognizable at present. But, the framers of the Constitution intended that recourse to residuary powers of legislation should be the last resort and not the first step. In past, several states have demanded that the residuary powers, including those of taxation, should be vested in the States. In the defence of its decision to transfer the residuary powers to the Concurrent List rather than to the States List, the Centre pointed to the strong unitary bias of the country’s federal structure
In Sat Pal & Co. v. Lt. Governor of Delhi AIR 1979 SC 1550 Case, the Court observed that the Parliament would have power to legislate on the subject in the exercise of residuary powers under Entry 97 of List I and it would not be proper to circumscribe, corrode or whittle down its power by saying that the subject of legislations was present to the minds of the farmers of the Constitution because apparently it falls in one the entries in List II and thereby deny power to legislate under Entry 97.
In I. C. Golaknath v. State of Punjab, AIR 1967 SC 1643 case, the Supreme Court had held that the power of the Parliament to amend the Constitution was derived from Article 248 read with Entry 97 of List I and that Article 368 dealt only with the procedure for amendment.
In Keshavanand Bharti v. State of Kerala, AIR 1973 SC 1461case, the Supreme Court held that Article 368 should be held to include both the power and procedure for amendment and there is no case for invoking a residuary power for the constitutional amendment.
In Hari Krishna Bhargava v. Union of India, AIR 1966 SC 619 case, the Court held that Entry 97, List I, was not the first step in the discussion of such problems, but the last resort.
In Union of India v. H. S. Dhillon, AIR 1972 SC 1061 case, the Court held that once it is found that the subject-matter of the impugned legislation does not fall under any entry in List II or III then Parliament can take recourse to the residuary power, or it can be combined with any Entry in List I.
In Attorney General for India v. Amratlal Prajivandas, AIR 1994 SC 2179 case, the Supreme Court has observed that the test to determine the legislative competence of Parliament is this: whenever the competence of Parliament to enact a specific statue is questioned one must look to the entries in List II. If the said statue is not relatable to any of the entries in List II, no further inquiry is necessary as Parliament will be competent to enact the said statue either by virtue of the entries in List I and List III or by virtue of the residuary power contained in Article 248 read with entry 97, List I.
Sarkaria Commission
In past, several states have demanded that the residuary powers, including those of taxation, should be vested in the States. In the defence of its decision to transfer the residuary powers to the Concurrent List rather than to the States List, the Centre pointed to the strong unitary bias of the country’s federal structure.
The Sarkaria Commission on Centre-State relations, which submitted its report in 1988, had also rejected the suggestion that the residuary powers should be vested in the States, even though it endorsed the Supreme Court’s interpretation that these powers cannot be so expansively interpreted as to whittle down the power of the State legislatures. The Commission, however, backed the suggestion to transfer Entry 97 from the Union List to the Concurrent List.
Recommendations of Sarkaria Commission:
- The residuary power of legislation in regard to taxation remains with Parliament because, it said, the Constitution-makers did not include any entry relating to taxation in the Concurrent List so as to avoid Union-State frictions, double taxation, and frustrating litigation.
- The power to tax might be used not only to raise resources but also to regulate economic activity, and warned that there might be situations in which a State, in the garb of introducing a new subject of taxation, may legislate in a manner prejudicial to the national interest.
- It recommended the transfer of other residuary powers to the Concurrent List because, it felt, the exercise of such power by the States would be subject to the rules of Union supremacy that have been built into the scheme of the Constitution, particularly Articles 246 and 254.
Conclusion:
Demands of a welfare State, development in technology, change in aspirations and expectations of a developing society, the complex world situation with interdependence and hostility among nations necessitate new legislation on some such topics that they could not have been within the contemplation of framers of the Constitution. In such a situation, the subject of legislation may not squarely fall in any specific entry in the three Lists. In such a situation Parliament would have the power to legislate on the subject in the exercise of residuary powers under Article 248 and Entry 97 of List I. In past, several states have demanded that the residuary powers, including those of taxation, should be vested in the States. The Sarkaria Commission has rejected this suggestion. In Union of India v. H. S. Dhillon, AIR 1972 SC 1061 case, the Court held that once it is found that the subject-matter of the impugned legislation does not fall under any entry in List II or III then Parliament can take recourse to the residuary power, or it can be combined with any entry in List I.