The Legislative Lists

Clause (3) gives the State legislature exclusive power over List II, and it is expressed to be "subject to clauses (1) and (2)".

Clause (4) gives Parliament power to legislate for any part of India not included in a State, with respect to any matter, including a matter in the State List.

Read the non obstante and subject-to phrases together and the hierarchy falls out: List I prevails over List III and List II; List III prevails over List II. The State List is the only one that is subordinate to both the others, so a State's exclusive field is exclusive only where nothing in the other two Lists covers the ground.

That is the structural reason Indian federalism tilts to the Centre, and it is worth saying in an essay in exactly this form: the tilt is not in the length of the Union List, it is in the ordering of the clauses.

The three Lists

List I, the Union List, has ninety-seven entries and covers what has to be uniform for the country: defence, foreign affairs, citizenship, railways, currency, banking, insurance, corporation tax, income tax other than agricultural income, inter-State trade, and the residuary entry 97.

List II, the State List, has sixty-six entries and covers what can vary locally: public order, police, local government, public health and sanitation, agriculture, land, liquor, betting and gambling, and taxes on land, buildings and agricultural income.

List III, the Concurrent List, has forty-seven entries and covers what both levels have a real interest in: criminal law and criminal procedure, marriage and divorce, transfer of property other than agricultural land, contracts, bankruptcy, trusts, forests, education, electricity, factories, labour welfare, and economic and social planning.

Three entries moved from the State List to the Concurrent List by the Forty-second Amendment in 1976: education, forests, and weights and measures, together with the protection of wild animals and birds and the administration of justice. That single amendment did more to shift the balance than most of the emergency provisions, and it is worth naming in a federalism answer.

Interpreting an entry

Courts have settled a few rules of construction, and an examiner expects them.

An entry is given the widest possible meaning. Each general word is held to extend to all ancillary or subsidiary matters which can fairly be said to be comprehended in it. A power to legislate on a subject carries the power to legislate on everything reasonably incidental to it.

The entries are fields of legislation, not powers. They describe subject matter; the power comes from article 246.

Taxation entries are separate from general entries. A general entry on a subject does not carry a power to tax that subject: the taxing entries are set out separately in each List, and a tax must be traced to a taxing entry.

An apparent conflict is reconciled if possible. The court first tries to give effect to both entries by reading one as limited by the other; only if reconciliation is impossible does the hierarchy of clauses decide.

Facts. State of Bombay v. F.N. Balsara, AIR 1951 SC 318, 1951 SCR 682, decided 25 May 1951. The Bombay Prohibition Act 1949 prohibited the possession and sale of liquor, including imported liquor. Intoxicating liquor was a Provincial entry; import and export across customs frontiers was a Dominion entry.

Held. There was no conflict. "Possession and sale" in the Provincial entry must be read without qualification, and "import" standing alone does not include the sale or possession of the article imported. Even assuming that prohibiting purchase, possession, transport and sale would affect import, the Act was in pith and substance a law on intoxicating liquors, and an incidental encroachment on the Dominion field did not affect its validity. The American doctrine of the "original package" has no application in India, given how precisely the entries are worded.

Why it matters. It shows the reconciliation rule at work before any doctrine is needed: two entries that look as though they collide are read so that they do not.

Residuary power

Article 248 gives Parliament exclusive power to make any law with respect to any matter not enumerated in the Concurrent or State Lists, including the power to impose a tax not mentioned in either. Entry 97 of List I says the same thing from inside the List.

This reverses the arrangement in the United States and Australia, where the residue stays with the units, and it follows from India's being a holding-together federation.

Facts. Union of India v. H.S. Dhillon, AIR 1972 SC 1061, (1972) 2 SCR 33, decided 21 October 1971. Section 24 of the Finance Act 1969 amended the Wealth Tax Act to include agricultural land in the assets on which net wealth is computed. The High Court held this beyond Parliament's competence, because a tax touching agricultural land belonged to the States under Entry 49 of List II, "taxes on lands and buildings".

Held. The amendment is valid. Articles 246 and 248 with Entry 97 mean that any matter, including a tax, not allotted exclusively to the States under List II or concurrently under List III falls within List I. It follows, and this is the part to remember, that when a central Act is challenged the only enquiry is whether it legislates on a matter in List II, because that is the only field from which Parliament is barred. If the central Act does not enter that field, there is no point asking which entry of List I or List III it fits.

Why it matters. It is the leading authority on residuary power and it inverts the usual enquiry. For a State law you ask "which entry authorises this"; for a central law you ask only "does this trespass on List II".

Article 246A, the entry that is not in a List

The Constitution (One Hundred and First Amendment) Act, 2016 introduced the goods and services tax, and it did not do so by adding an entry to a List. It inserted article 246A, a free-standing provision which begins "Notwithstanding anything contained in articles 246 and 254" and gives Parliament and every State legislature power to make laws with respect to goods and services tax.

Two features are examinable. It is a concurrent power that sits outside the Concurrent List, with Parliament given exclusive power where the supply is inter-State. And its non obstante clause displaces article 254, so the ordinary repugnancy rule does not apply to it in the same way.

This is dealt with fully in [The Goods and Services Tax and Its Council], because the interesting question is not the drafting but the Council that article 279A creates.

Where this leads

The Lists overlap. They were bound to: no list of subjects drawn in the abstract survives contact with a real statute, because a real statute touches several subjects at once. The Constitution therefore needs techniques for deciding which List a law belongs to and what happens when two valid laws collide. Those are the next three chapters:

• Which List does this law really belong to? [Pith and Substance].
• Is the legislature pretending to legislate on its own subject while really legislating on another's? [Colourable Legislation and Incidental Encroachment].
• Both laws are valid, and they conflict. Which prevails? [Repugnancy and the Occupied Field].

A worked example

A State legislature enacts a law taxing the entry of goods into a local area for consumption, and requiring every carrier to obtain a permit before crossing the State border. A carrier challenges both.

Step one, competence for the tax. Find a taxing entry in List II. If one covers entry of goods into a local area, the State is competent, and a general entry alone would not do, because a taxing power must be traced to a taxing entry.

Step two, competence for the permit. Trade and commerce within the State is a State entry; inter-State trade and commerce is a Union entry. Ask what the permit requirement is in pith and substance about. If it regulates carriers operating within the State, it is within List II; if it operates on the movement of goods across the border as such, it is not.

Step three, is there a central law? If Parliament has legislated on the same Concurrent matter, article 254 arises, which is a separate question from competence.

Step four, Part XIII. Even a competent State law must satisfy articles 301 to 304. The tax must not discriminate against goods from other States under article 304(a); the permit requirement is a non-fiscal restriction on the freedom under article 301 and needs article 304(b), which requires the President's previous sanction.

The order matters. Competence first, then repugnancy, then the freedom of trade. A candidate who begins with article 301 will miss the point that an incompetent law never reaches it.

Quick revision

• Article 245 is reach; article 246 is subject matter.
• A Union law is not invalid for extra-territorial operation; a State law needs a territorial nexus.
• List I, ninety-seven entries; List II, sixty-six; List III, forty-seven. List I prevails over both, List III over List II.
• The tilt is in the ordering of the clauses of article 246, not in the length of the Lists.
• Entries get the widest meaning; taxing power must be traced to a taxing entry; conflicts are reconciled where possible.
• Residuary power is Parliament's under article 248 and Entry 97, and Dhillon says the only question about a central Act is whether it invades List II.
• Article 246A gives GST a concurrent power outside the Lists, and displaces article 254.

Test yourself

1. Explain how the non obstante and subject-to clauses of article 246 create the hierarchy among the three Lists.

2. What does article 245(2) provide, and what is the corresponding position of a State legislature?

3. State the rules for construing an entry in a List, and explain why a taxing power must be traced to a taxing entry.

4. What is the test in Union of India v. H.S. Dhillon for a central Act, and why does it reverse the usual enquiry?