POWERS OF THE FEDERATION
Before I describe the powers of the
Federal Government it might be desirable to explain what is the essence of a
Federal Form of Government.
There is no simpler way of
explaining it than by contrasting it with the Unitary Form of Government.
Although the Federal Form of
Government is distinct from the Unitary form, it is not easy to see
distinction. On the other hand there is, outwardly at
any rate, a great deal of similarity between the
two. The Government of almost every country in
these days is carried on by an inter-related group
of Administrative Units operating in specific areas and discharging specific
public functions. This is true of a country with a Federal Form of Government and also of a country with a Unitary form of
Government. In a Federal Constitution there is a
Central Government and there are inter-related to it several Local Governments.
In the same way in a Unitary Constitution there is
a Central Government and there are inter-related
to it several Local Governments.
On the surface, therefore, there appears to be no difference between the two.
There
is, however, a real difference between them although it is not obvious. That
difference lies in the nature of the inter-relationship
between the Central and the Local Administrative Units. This difference may be
summed up in this way. In the Unitary Form of Government, the powers of the
local bodies are derived from an Act of the Central Government. That being so
the powers of the Local Government can always be
withdrawn by the Central Government. In the Federal
form of Government the powers of the Central Government
as well as of the Local Government are derived by
the law of the Constitution which neither the Local Government nor the Central Government can
alter by its own Act. Both derive their powers
from the law of the
Constitution and each is required by the
Constitution to confine itself to the powers given to it. Not only does the
Constitution fix the powers
of each but the constitution establishes a
judiciary to declare any Act whether of the Local or the Central Government as void if it
transgresses the limits fixed for it by the Constitution.
This is well stated by Clement in his volume on the Canadian Constitution in
the following passage:
" Apart from detail, the term
federal union in these modem times implies an agreement ............ to commit
............ people to the control of one common government
in relation to such matters as are agreed upon as
of common concern, leaving each local government still independent and
autonomous in all other matters, as a necessary corollary the whole-arrangement constitutes a
fundamental law to be recognised in and enforced
through the agency of the Courts.
" The
exact position of the line which is to divide matters of common concern to the whole
federation from matters of local concern in each
unit is not of the essence of federalism. Where it is to be drawn in any proposed scheme depends upon
the view adopted by the federating communities as to what, in their actual circumstances, geographical, commercial, racial or
otherwise, are really matters of common concern and as such proper to be
assigned to a common government. But the maintenance of the line, as fixed by
the federating agreement, is of the essence of modem federalism;
at least, as exhibited in the three great Anglo Saxon federations today, the United States of
America, the Commonwealth of Australia, and the Dominion of Canada. Hence the
importance and gravity of the duty thrown upon the Courts as the only
constitutional interpreter of the organic instrument which contains the fundamental
law of the land."
Thus to draw a line for the purpose
of dividing the powers of Government between the Central and Local Governments
by the law of the Constitution and to maintain that line through the judiciary are the two essential features
of the Federal Form of Government. It is these two features which distinguish
it from the Unitary Form of Government. In short every federation involves two things :
(1) Division of Powers by metes and
bounds between the Central Government and the Units which compose it by the law of the Constitution, which is beyond the power
of either to change and to limit the action of each to the powers given and
(2) a Tribunal beyond the control of either to decide when the issue
arises as to whether any particular act of the Centre or of the Unit,
Legislative. Executive, Administrative or Financial is beyond the powers given
to it by the Constitution.
Having
explained what is meant by Federal Government, I will now proceed to give you
some idea of the Powers which are assigned by the constitution to the Federal
Government.
For the purposes of distributing
the Legislative Powers the possible subjects of
Legislation are listed into three categories. The first category includes
subjects, the exclusive right to legislate upon which is given to the Federal Legislature. This list is called the Federal List. The second category includes
subjects, the exclusive right to legislate upon
which is given to the Provincial Legislature. The list is called the Provincial
List. The third category includes subjects over
which both the Federal as well as the Provincial
Legislature have a right to legislate. This list is called the Concurrent list. The scope and contents of
these lists are given in Schedule VII to the Government of India Act.
In accordance with the fundamental
principles of Federation
a law made by the Federal Legislature if it relates to a matter which is
included in the Provincial List, would be ultra vires
and a nullity.
Similarly, if the Provincial Legislature were to make a law relating to a
matter falling in the Federal List such a Provincial Law would be ultra vires
and therefore a nullity. This is,
however declared by statute and section 107 is now
the law on the point. Cases of conflict of legislation touching the Federal
List and the Provincial List are not likely to occur often. But cases of
conflict between the two are sure to arise in the concurrent field of legislation.
The law as to that you will find in section 107. Sub-section (7) lays down when
a Federal Law shall prevail over a Provincial Law. Sub-section (2) lays down as
to when a Provincial Law shall prevail over the Federal Law. Reading the
sub-sections together the position in law is this. As a rule a Federal Law
shall prevail over a Provincial Law if the two are in conflict. But in cases where the Provincial Law, having been
reserved for the consideration of the Governor-General or for the signification
of His Majesty's pleasure, has received the assent of the Governor-General or
His Majesty, the Provincial Law shall prevail until the Federal Legislature
enacts further legislation with respect to the
same matter.
With regard to the question of this
distribution of powers of legislation every Federation is faced with a problem.
That problem arises because there can be no guarantee that enumeration of the
subjects of legislation is exhaustive and includes every possible subject of
legislation. However complete and exhaustive the listing may be there is always the
possibility of some subject remaining unenumerated. Every Federation has to
provide for such a contingency and lay down to whom the powers to legislate
regarding these residuary subjects shall belong. Should they be given to the
Central Government or should they be given to the Units ? Hitherto there has been only one way of dealing
with them. In some Federations. these residuary powers are given to the Central
Government, as in Canada. In some Federations they
are given to the Units, as in Australia. The Indian Federation has adopted a
new way of dealing with them. In the Indian Federation they are neither
assigned to the Central Government nor to the Provinces. They are in a way
vested in the Governor-General by virtue of section 104. When a Legislation is
proposed on a subject which is not enumerated in any of the three lists it is
the Governor-General, who is to decide whether the powers shall be exercised by
the Federal Legislature or by the Provincial Legislature.
The first question is, what is the
extent of the executive powers of the Federation ? Is it co-extensive
with the legislative powers ? In some of the Federations this was not made clear by statute. It was
left to judicial decision. Such is the case in
Canada. The Indian Constitution does not leave this matter to courts to decide.
It is defined expressly in the Act itself. The relevant section is section
8(7). It says that the executive authority of the Federation extends—
(a) to
matters with respect to which the Federal Legislature has powers
to make laws;
(b) to raising in British India on
behalf of His Majesty of naval, military and air forces and to the governance
of His Majesty's forces borne on the Indian establishment ;
(c) to
the exercise of such rights, authority and jurisdiction as are exercisable by His Majesty by treaty, grant, usage, sufference, or otherwise in and in relation to the
tribal areas.
There is no difficulty in following
the provisions of this sub-section. There might perhaps be some difficulty in
understanding sub-clause (a). It says
that the executive powers must be co-extensive with the legislative powers of the Federation.
Now the legislative power of the Federation extends not only to the Federal
List but also to the Concurrent List Docs the executive power of the Federation
extend to subjects included in the Concurrent List
? Two points must be borne in mind before
answering this question. First, the Concurrent List is also subject to the
legislative authority of the Province. Second, according to section 49(2) that
the executive authority of each Province extends
to the matters with respect to which the Legislature of the Province has power
to make laws. The answer to the question whether the executive authority of the
Federation extends also to the Concurrent list is that the Executive Authority
in respect of the Concurrent List belongs to the Federal
Government as well as to the Provincial Government. This is clear from the terms of section 126(2). It belongs to Provincial
Government except in so far as the Federal
Legislature has covered the field. It belongs to the Federal Government except in so far as the Provincial
Legislature has covered the field.
The Concurrent List is not the only
list which is subject to Legislation by the Federal Legislature. The Federal Legislature has the right to
legislate even on Provincial subjects under
Section 102 in causes of emergency and under
Section 106 to give effect to international
agreements. Does the Executive Authority of the Federation extend to such
matters also? The answer is that when a field is covered by Federal Legislation that field also becomes the field of Executive Authority of the
Federation.
The Administrative Powers of the
Federation follow upon the Executive Powers of the Federation just as the
Executive Powers of the Federation follow upon the Legislative Powers of the
Federation.
To this there is one exception.
That exception relates to the administration of subjects included in the
Concurrent List. The Concurrent List is a list to which the Legislative
Authority of the Federation extends by virtue of Section 100. As has already
been pointed out the executive authority of the Federation extends in so far as
Federal Legislation has covered the field. But the administrative powers for
subjects falling in the Concurrent List do not belong
to the Federation. They belong to the Provinces.
The revenues of the Federal
Government are derived from four different sources:
(1) Revenue from Commercial Enterprise, (2) Revenue from Sovereign Functions; (3) Revenue
from Tributes; and (4) Revenue from Taxes.
Under the first head fall all
revenues from Posts and Telegraphs. Federal
Railways, banking profits and other commercial operations. Under the second head come revenues from currency and coinage,
from bona vacantia
and territories
administered directly by the Federal Government.
Under the third head are included Contributions and Tributes from the Indian
States.
The classification of Revenue from
taxes follows upon the Powers of Taxation given to
the Federal Government by the Constitution. The Powers of Taxation given to the
Federal Government fall into three main categories. in
the first category fall those powers of taxation which is wholly appropriable by the Federal Government. In the second category, fall those powers of taxation which are
exercisable for raising revenue which is divisible
between the Federal Government and the Provincial Governments.
The heads of revenue which fall
under the first category of Taxing Powers cover those which are specifically mentioned is the Federal List—
produced in India except— (a) alcoholic liquors for human consumption ; (b) opium, Indian
hemp and other narcotic drugs and narcotics, non-narcotic drugs;
(c) medical and toilet preparations containing alcoholic, or any substance included in sub-paragraph (b) of this entry.
3. Corporation tax.
4. Salt
9. The rates of stamp duty in respect of bills of exchange, cheques. promissory notes,
bills of lading,
letters of credit, policies of insurance proxies and receipts.
10. Terminal taxes on goods or passengers carried by railway or air; taxes
on railway fares and freights.
1. Marriage and divorce.
Being in the Concurrent list, the
Federal Legislature has power to legislate upon
with respect to these. Can the Federal Legislature also while legislating upon
them raise revenue from them ? The Act does not
seem to furnish any answer to this question. It may however be suggested that
the rules contained in section 104 regarding the exercise of Residuary Powers
will also apply here.
(1) Income Tax other than
Corporation Tax and (2) Jute Export duty. Those which are made divisable according to the Federal Law are : (1) Duty on Salt,
(2) Excise duty on Tobacco and
other goods and (3) Duties of Export.
In respect of the financial powers of the Federation there is one feature which by reason of its
peculiarity is deserving of attention. The Act in
giving the Federal
Government the right to tax, makes a distinction
between power to levy the tax and the right to
collect it and even where it gives the power to levy the tax it does not give it the right to
collect it. This is so in the case of surcharge on Income tax and the
Corporation tax. The Income tax is only leviable in the Provinces and not in
the States although it is a tax for Federal purposes. The State subjects are liable
to pay only a Federal surcharge on Income Tax because
such a surcharge is leviable both within the
Provinces as well as the Slates. But under section 138 (3) the Federal Government has no right to collect it within the
States. The collection is left to the Ruler of the
State. The Ruler, instead of collecting the
surcharge from his subjects, may agree to pay the
Federation a lump sum and the Federation is bound to accept
the same. Similar is the case with regard to the Corporation tax. The Federation can levy it on
State subjects but cannot collect it directly by
its own agency. Section 139 provides that the collection
of the Corporation tax shall as of right be the
function of the Ruler.
V
CHARACTER
OF THE FEDERATION
How does the Indian Federation compare with other Federations? This is not only a natural inquiry but it is also a necessary inquiry. The method of comparison and
contrast is the best way to understand the nature of a
thing. This comparison can be instituted from points of view. There is no time
for a comparison on so vast a scale. I must confine this comparison to some
very moderate dimensions. Therefore I propose to raise only four questions: (1)
Is this Federation a perpetual Union? (2) What is the relationship of the Units
to the Federal Government ? (3) What is the
relationship of the Units as between themselves ? (4) What is the
relationship of the people
under the Units?
There is no doubt that the accession of the
Indian States to the Federation is to be perpetual so long as the Federation created by the Act
is in existence.
While the Federation exists there is no right to secede. But that is not the real question. The real
question is, will the federation continue even
when the Act is changed ? In other words the question
is, is this a perpetual Union with no right to secede or, is this a mere alliance with a right to break away? In my
opinion the Indian Federation is not a perpetual
union and that the Indian States have a right to secede. In this respect the constitution
of the United States and this Indian Federation
stand in clear contrast. The constitution of the United
States says nothing as to the right of secession.
This omission was interpreted in two different ways. Some said that it was not
granted because it was copy recognized. Others
said it was not excluded because it was not negatived. It was this controversy over the question namely whether the right of
secession was excluded because it was not recognized which led to the Civil War
of 1861. The Civil War settled two important principles: (1) No State has a right to declare an Act of the
Federal Government invalid; (2) No State has a right to secede from the Union.
In the Indian Federation it would be unnecessary
to go to war for establishing the right to secession because the Constitution
recognizes the right of the Indian States to secede from the Indian Federation
if certain eventualities occur. What is a perpetual
Union and what is only a compact is made nowhere
so clear as by Black-stone in his analysis of the nature of the Union between
England and Scotland. To use his language the Indian
Federation is not an incorporate Union because in a Union the two contracting
States are totally annihilated without any power of revival. The Indian
Federation is an alliance between two contracting
parties, the Crown and the Indian States, in which neither is annihilated but
each reserves a right to original Status if a breach of condition occurs. The
Constitution of the United States originated in a
compact but resulted in a union. The Indian
Federation originates in a compact and continues
as a compact. That the Indian
Federation has none of the marks of a Union but on
the other hand it has all the marks of a compact is beyond dispute. The distinguishing marks of a Union were well described by
Daniel Webster, when in one of his speeches on the American Constitution he said—
"...The constitution speaks of that political system which is established as ' the Government of the United States '. Is it not doing a strange violence to languages to
call a league or a compact between sovereign
powers a Government? The Government of a State is
that organisation in which political power resides ".
" ...The broad and clear difference
between a government and a league or a compact is
that a government is a body politic; it has a will of its own: and it
possesses powers and faculties to execute its own
purposes Every compact looks to some power to
enforce its stipulations.
Even in a compact between sovereign communities there always exists this ultimate reference to a power to ensure its execution; although
in such a ease, this power is but the force of one party against the force of another, that is to say,
the power of war. But a Government executes its
decisions by its own supreme authority. Its use of force in compelling obedience to its own enactments is not war. It contemplates
no opposing party having a right of resistance. It
rests on its power to enforce its own will; and when it ceases to possess this power it is no
longer a Government ".
In the light of this the following
facts should be noted. The Act does not ordain and
establish a Federal Government for British India and the Indian States. The Act ordains and establishes a Federal Government for
British India only. The Federal Government will become a Government for the States only
when each State adopts it by its Instrument of
Accession. Again note that the subjection of the
States to the Federal Government is not to be for all times. It is to continue only under
certain circumstances. It is to continue so long
as certain provisions of the Act are continued without a change. Thirdly, where
change in the provisions is permissible such change shall not bind the State unless it agrees to
be bound by it,
All these
are unmistakable signs which show that the Indian
Federation is a compact and not a perpetual Union. The essence of a compact is that it
reserves the right to break away and to return to the original position.
In this respect therefore the Indian Federation differs from the Federations in U.S.A., Canada and Australia. It differs
from the U.S.A., because
the right to secede,
is recognized by the Indian Constitution if the constitution is altered, while it is not recognized by the
Constitution of the U.S.A.,
even if the constitution is altered against the wishes of a particular State. In regard to
Australia and Canada such a question cannot really arise and if it did, a civil war would be quite
unnecessary to decide the issue. In these federations the
sovereignty, whether it is exercised by the Federal Governments or the Units belongs to the Crown and the maintenance of the Federation or its break up remains
with the King and Parliament. Neither the Federation
nor the Units could decide the issue otherwise than with the consent of
Parliament. If a break-up
came, it would be a mere withdrawal of the sovereignty of the Grown and its re-distribution which the Crown is
always free to do. The break up could be legal and even if it was perpetrated
by non-legal means it could give sovereignty to the rebellious units because it
belongs to the Crown. The same would have been the
case, if the Indian Federation had been the Federation of British Indian
Provinces only. No question of secession could have
arisen. The Provinces would, have been required to
remain in the position in which the Crown might think it best to place them.
The Indian Federation has become different
because of the entry of the Indian States. The entry of the Indian
States is not for all times and under all circumstances. Their
entry is upon terms and conditions. That being so the
Indian Federation
could not be a perpetual union, indeed, the Indian States would not enter into matrimony
with the Indian Provinces unless the terms of divorce were settled before-hand. And so they are. That is why the Indian Federation is
a compact and not a union.
That each separate, unit should have approximately equal political rights is a
general feature of federations. Equality of status among the different
units is a necessity. To make
them unequal in status
is to give units the power to become dominant- partners. The existence of dominant partners in a federation, as
observed by Dicey is
fraught with two dangers. Firstly, the dominant
partners may exercise an authority almost inconsistent with federal
equality. Secondly, it may create combinations inside, the Federation of dominant units and subordinate units and vice versa. To prevent such en unhealthy slate of affairs, all federations
proceed upon the principle of equality of status. How far does this
principle obtain in
the Indian Federation?
As you know for purposes of Legislation
the field is divided into three parts and there are three lists prepared which are called the Federal List the Concurrent
List and the Provincial List.
The Federal List contains 59 items as subjects of legislation. The Con-current List contains. 36 items..
The first
thing to note is that both these lists are binding upon the Provinces. They cannot pick and choose as to the matters
in these two lists in respect of which they will subject themselves to the authority of the Federation. The Provinces have no liberty to contract out of
these two lists. The position of
a Federating State is
quite different. A Federating
State can wholly keep
itself cut of the
Concurrent List.
Under section 6(2) there. is no
objection to the Ruler of any Indian State to agree to federate in respect of matters included in the Concurrent
List. But there is no obligation upon them
to do so. Such an agreement is not a condition precedent to their
admission into the Federation.
With regard
to the Federal List, there is no doubt an
obligation on the Ruler of a State to subject himself to the legislative authority of the Federation in
respect of the Federal List, but his subjection to the Federation will be confined to matters specified by him in his
Instrument of Accession. There are as I stated
altogether 59 items in the Federal List. There is
no obligation upon
the Prince to accept all subjects in the Federal List as a condition precedent
for his entry into Federation. He may accept some
only or he may accept all. Again one Ruler may
accept one item and another Ruler may accept another. There is no rule laid down in the constitution that some items must be accepted by every Ruler who chooses to enter the Federation. The Federation,
therefore, while it affects British India and the Provinces uniformly and completely so far as the legislative
authority of the
Federation is concerned, it touches different
States in different degrees. A Ruler may federate
in respect of one subject yet he is as good a member of the Federation as a Ruler who
accepts all the fifty-nine items in the Federal
List.
The Provincial List is a list which
is subject to the exclusive Legislative authority of the Provinces.
There is no corresponding State List given in the
Act for the Federated States. It cannot be given. But it
can be said that it includes all these
subjects which are not surrendered by the State to
the Federation. Now with regard to the exclusive authority of the Provincial
Legislature, still in. the event of emergency
it is open to the Federal Legislature to make laws for a Province or any part
thereof with respect to
any of the matters enumerated in the Provincial
List, if the Governor-General has in his discretion declared under section 102 by proclamation that a grave emergency
exists whereby the security of India is threatened whether by way of war or by internal disturbances. There is no such provision
in respect of the Indian States. A grave emergency which threatens India may
quite well arise within a State as
it may within the territories of a Province. It is thus clear that while the Federal
Legislature can intervene and make
laws for a Province when there is emergency, it cannot
intervene and make laws for the Federated States under similar
circumstances.
Again in the matter of the Executive the States and the Provinces do
not stand on the same footing. Section 8
defines the scope of the executive authority of
the Federation which according to section 7 is exercisable
by the Governor-General on behalf of His
Majesty. According to sub-section (1) to sub-clause (a) the authority of the
Federal Executive extends to matters with respect to which the Federal
Legislature has power to make laws, but
this clause has also exclusive authority with respect to certain matters included in the concurrent List
subject to certain limitations ; but with regard to the states the case is very
different. With regard to the States the federation can have no executive
authority in respect of subjects in the concurrent List, but also the
federation is not entitled to have exclusive authority with respect to matters
included in the Federal Legislative List.
Sub-clause 2 of section 8 is very important. It says: "The executive authority of the
Ruler of a Federated State shall notwithstanding anything in this section,
continue to be exercisable in that state
with respect to matters with respect to which the federal Legislature has power
to make laws for that State except in so far as the executive authority of the Federation becomes exercisable in the State to the exclusion of the
executive authority of the Ruler by virtue of a federal law.".
In plain language what the sub-section means is this—With regard to a
province the executive authority of the Federation extends to all matters over
which the Federation has legislative authority. With regard to the State the
position is different. The mere fact that the federal legislature has authority to legislate in respect of a subject does not give the Federation any
executive authority over the State in respect of that
subject. Such executive authority can be conferred
only as a result of a law passed by the
Federation. Whether it is possible to pass such a
law is problematic in view of the large
representation which the States have in Federal Legislature. Whatever may be the eventuality, in
theory the executive authority of the Federation
does not extend to a Federated State. The position is that while with regard to the
provinces she Federation can legislate as well as execute, in the case of the Federated Stales, the Federation can legislate, but cannot
execute. The execution may be with the Slate.
When you begin
to examine the constitution from the point of view of administration you
will find certain sections in the Act which lay down rules for the guidance of the
Federal Government, of the Provincial Governments
and of the State Governments.
The purpose of the sections is to tell them how they should exercise the executive authority belonging to them
respectively. These sections are 122, 126 and 128.
" 122. (1) The executive authority of every
Province and Federated State shall be so exercised as to secure respect for the laws of the Federal Legislature which apply
in that Province or State.
(2) The reference in sub-section (7)
of this section to laws of the Federal Legislature
shall, in relation to any Province, include a reference to any existing Indian Law applying in that Province.
(3) Without prejudice to any of the
other provisions of this part of this Act, in the exercise of the executive
authority of the Federation in any Province or Federated State regard shall be
had to the interests of that Province or State.".
Section 126 is addressed to the
Provincial Governments. It provides that—
" 126 (1) The executive authority of every Province shall be
so exercised as not to impede or prejudice the exercise of the executive
authority of the Federation, and the executive authority of the Federation
shall extend to the giving of such directions to a Province as may appear to the Federal Government to be
necessary for that purpose."
" 128. (7) The executive authority
of every Federated State shall be so exercised as
not to impede or prejudice the exercise of the executive authority of the
Federation so far as it is exercisable in the
State by virtue of the law of the Federal
Legislature while applies therein.
(2) If it appears to the Governor-General that the Ruler of any
Federated State has in any way failed to fulfil his obligations under the
preceding sub-section, the Governor-General, acting in his discretion, may
after considering any representations made to him by the Ruler, issue such directions to the Ruler as
he thinks fit:
Provided that if any question arises under this section as to whether
the executive authority of the Federation is exercisable in a State with
respect to which it is so exercisable, the question may, at the instance either
of the Federation or the Ruler, be referred to the Federal Court for
determination by that Court in the exercise of its
original jurisdiction under this Act.'
All these sections would have been
very useful if there was any possibility of conflict
in the exercise of their executive authority by these agencies. But these will be quite unnecessary because there
would be as a matter of fact no conflict of executive authority which can arise
only when such executive authority is followed by administrative act. When administration is divorced from
Executive Authority there is no possibility of conflict and the admonitions
contained in such sections are quite unnecessary.
Now it is possible that in the
Federal Constitution the Federal Government may be
altogether denuded of its powers of administration and may be made just as a
frame without any spring of action in it. The
constitution provides that
the Governor-General of the Federal Legislature may provide that the
administration of a certain
law passed by it instead of being carried on by the Federal Executive might be
entrusted to Units i.e. to the Provincial Governments
and the Indian States. This
is clear from the terms of section 124:
" 124. (1) Notwithstanding anything in this Act, the
Governor-General may, with the consent of the Government of a Province or the
Ruler of a Federated State, entrust either conditionally to the Government or
Ruler or to their respective Officers, functions in relation to any matter to
which the executive authority of the Federation
extends.
(2) An Act of the Federal Legislature may, notwithstanding that it
relates to a matter with respect to which a Provincial Legislature has no power
to make laws, confer powers and impose duties upon a Province or officers and
authorities thereof.
(3) An Act of the Federal Legislature which
extends to a Federated State may confer powers and
impose duties upon the State or officers and authorities thereof to be
designated for the purpose by the Ruler.
(4) Where by virtue of this
section powers and duties have been conferred
or imposed upon a Province
or a Federated State or officers or authorities thereof, there shall be paid by the Federation to the Province
or State such sum as may be agreed, or, in default
of agreement, as may be determined by an arbitrator
appointed by the Chief Justice of India, in respect of any extra
cost of administration incurred by the Province or State in connection
with the exercise of those powers and
duties."
It is quite
possible for States and Provinces to combine to rob the Federation of all administrative powers and
make it only a law making body.
" 125. (1) Notwithstanding anything in
this Act, agreements may, and, if provision has been made in that behalf
by the Instrument of Accession of the State, shall be made between the Governor-General and the Ruler of a Federated State for the
exercise by the Ruler
or his officers of functions in relation to the
administration in his State of any law of the Federal Legislature which applies therein.
(2) An agreement
made under this section shall contain provisions enabling the Governor-General in his
discretion to satisfy himself, by inspection
or otherwise that the administration of the law to which the agreement relates is earned out in accordance with the policy of the
Federal Government and, it he is not so
satisfied, the Governor-General acting in his discretion, may issue such directions to the Ruler as he thinks fit.
This
section means that a
State by its instrument of Accession may stipulate that the administration of Federal laws
in this State shall be carried out by the State agency and not by the agency of
the Federation and if it does so
stipulate then the Federation shall have no administrative power inside the State. The benefit of a law depends upon its
administration. A law may turn out to be
of no avail because the administration is either inefficient or corrupt to deprive the Federal Government of its
administrative power is really to cripple the federal Government. There is no Federation in which some units of
the Federation are permitted to say that the Federal Government shall have no
administrative power in their territory.
The Indian Federation is an exception.
Not only is there a difference between the Provinces and the States in
this matter but they also differ in their liability to supervision and
direction by the Federal Government in the matter of the
exercise of their executive authority. That
difference will be
clear if you will compare section 126 with section
128.
Section 126 enacts that the
executive authority of every province shall be exercised as not to impede or prejudice the exercise of the executive authority of the Federation and the executive authority of the
Federation shall extend to the giving of such directions to a Province as may appear to the Federal Government to be necessary for that purpose. Section 128 is a section which enacts a similar rule with respect to a Federated State, but there is a significant
difference between the two sections. Section 126 says
that the executive authority of the Federation
extends to the giving of such directions to a
province as may appear to the Federal Government
to be necessary for that purpose, while section 128 does not give such a power. That means that the Federation
does not possess the inherent executive authority to
give a direction to
the Ruler of a Federated State to prevent him from so exercising the executive authority of the State as to impede or
prejudice the exercise of the executive authority
of the; Federation. That
is one very significant difference. Such
authority, instead of being given to the
Federation, is given to the
Governor-General, who, of course,
under the law is distinct from the Federal Government and it is the Governor-General
who is empowered to
issue such directions to the Ruler as he
thinks fit. A further
distinction is also noticeable. When directions are issued to the
Governor of
a province under
section 126 he is bound
to carry them out. Be has no right to question the necessity of the
directions nor can he question the capacity of the Governor-General to issue
such directions. With
regard to the Ruler
of a Stale, however, the position is entirely different.
He can question such a direction, and have the
matter adjudicated in the Federal Court because the
proviso to sub-section
2 of section 128 says that if any question arises under this section as to whether the executive authority under this section of the Federation is exercisable in a State
with respect to any matter
or as to the extent to which it is so exercisable, the question may at the
instance either of the. Federation or the Ruler be referred to the Federal Court for
determination by that
Court.
Coming to the question of Finance, the disparity
between the Provinces and the States is a glaring disparity. Take the case
of the taxing
authority of the Federation
over the Provinces
and the States. It may
be noted that the
revenues of the Federation are derivable from sources which fall under
two main heads—those derive, from taxation and
those not derived
from taxation. Those not derived from taxation fall under six heads—
(3) Profits, if any, on the operation of Federal Railways.
(4) Profits, if any, from Mint and Currency
operations.
(5) Profits, if any, from any other
Federal enterprise, such as Reserve Bank, and
As regards the revenues derived
from taxation under the Government of India Act, they
fall under two heads; Ordinary taxation and
Extraordinary taxation. Ordinary taxation includes levy from following sources:
(1) Customs duties;
(2) Export duties;
(3) Excise duties;
(4) Salt;
(5) Corporation tax;
(6) Tax on income, other than
agricultural; and
(1) Surcharges on Income-tax.
(2) Surcharges on succession
duties.
(3) Surcharges on terminal taxes on
goods or passengers carried by rail or air and all taxes on railway freights.
(4) Surcharges on Stamp duties,
etc.
Now, while the provinces are liable to bear taxation under any of these heads
whether the taxation is of an ordinary character or is of an extra-ordinary character, the same is not true of the States. For instance,
the States are not liable in ordinary time to
ordinary taxes falling under heads 6 and 7, while the
Provinces are liable,
With regard to extraordinary taxation,
the States are not liable to contribute even in times of financial stringency the taxes
levied under items 2, 3 and 4 and even where they are liable to contribute 'under head 1 of the extraordinary sources of revenue, it must be certified that all other economies have been
made.
There is another difference from
the financial point of view between the States and
the Provinces. The field of taxation for provincial Governments has been
defined in the Act. A provincial Government cannot
raise revenue from any source other than those mentioned in the Act. Such is
not the case with the State. There is nothing in the Government of India Act, which defines the powers of a Federated
State with regard to its
system of taxation. It may select any source of
taxation to raise revenue
for the purpose of internal
administration and may even levy customs duties upon articles entering its territory from a
neighbouring province although that neighbouring province is a unit of the Federal Government of which the Federated State is also
a unit. This is a most extraordinary feature of this Indian Federation and also
one of its worst features. One of the results of a Federation, if not its primary
object, has been the freedom of trade and commerce inside the territory of the Federation. There is no
federation known to history which has permitted one unit of the Federation to
levy customs duties or raise other barriers with a
view to prevent inter-State commerce. The Indian
Federation is an exception to that rule and this is a feature of the Indian
Federation which makes it stand out in glaring contrast with other federations
with which people are familiar today.
One of the characteristics of a Federal
Constitution is that although the territory comprised in the Federation is
distributed or held by different units, still they constitute one single
territory. At any rate for customs purposes the territory is treated as a
single unit. Every Federal Constitution contains
powers and prohibitions to prevent trade and customs barriers being erected by
one unit against another.
The American constitution by
Section 9 of Article II prohibits a State from preventing the import or export
of goods or from levying import or export duties upon goods passing in or out
of the State boundary. Section 8(3) of Article II gives the Federal Government
the power of regulating trade or commerce between the States of the Union.
In Australia by virtue of Section 92 of its Constitution both the States
and the Federal Government
are bound so to exercise their power of regulation as not to transgress the
fundamental guarantee of the Constitution embodied in Section 92 that " trade and commerce
among the States whether by means of internal
carriage or ocean navigation shall be absolutely free".
In Canada section 121 enacts that " all articles of the growth, produce, or
manufacture of am' one Province shall, from and after the
Union, be admitted free into each of the other Provinces."
In the Indian Constitution the provision
relating to freedom of trade and commerce within
the Federation is contained
in Section 297. It reads as follows: "297. (1) No Provincial Legislature or Government shall—
(a) by virtue of the entry in the
Provincial Legislative List relating to trade and commerce within the Province,
or the entry in that list
relating to the production, supply, and
distribution of commodities, have power to pass
any law or take any executive action prohibiting
or restricting the entry into. or export from, the Province of goods of any class or description; or
(b) by virtue of anything in this Act have power to
impose any tax, cess, toll,
or due which, as between goods manufactured or produced in the Province and similar goods not so manufactured or produced, discriminates in favour of the
former, or which, in
the case of goods manufactured or produced outside
the Province, discriminates
between goods manufactured or produced in one locality and similar goods
manufactured or produced in another locality.
Now it will be clear from the terms
of this section that the freedom of trade and commerce is confined only to the
provinces. That means the Indian States are free
to prohibit the entry of goods from the Provinces
absolutely or subject them to duty. This is quite contrary to the fundamental
idea underlying a federal union. To allow one unit of the Federation to carry
on commercial warfare against another unit is nothing
but negation of
federation.
Before I enter into this question it is necessary to clear
the ground by pointing out
certain distinctions.
The words ' State '
and ' Society ' are often presented as though
there was a contrast between the two. But there is no distinction of a fundamental
character between a State and a society. It is true that the plenary powers of
the State operate through the sanction of law
while society depends upon religious and social sanctions for the enforcement
of its plenary powers. The fact, however, remains that both have plenary powers to coerce. As such, there
is no contrast between state and society. Secondly,
the persons composing society are persons who are
also members of the State. Here again, there is no difference
between State and Society.
There is, however, one difference, but it
is of another kind. Every person, who is a member of society
and dwells in it, is not necessarily a member of the State.
Only those who dwell within the boundary of the
State do not necessarily belong to the State. This
distinction between those, who belong to the State and those who do
not, is very crucial and should not be forgotten because it has important
consequences. Those who belong to State are
members and have the benefit? of membership
which consists of the totality rights and duties which they possess over against the State. From the side of duly the relation
is best indicated by the word subject, from the side of rights it is best designated by the word
citizen. This difference involves the consequence
that those who dwell in the State without belonging
to it have no benefit of membership which means
that they are foreigners and not citizens.
Theoretically, the task of differentiating the foreigners from the
citizens of a State would seem to be an easy task, in fact, almost a mechanical task. This is
particularly true of an Unitary State. Here there is a simple question: What
is the relation of this State as against any and
all foreign States ? In a Federal State the matter is complicated by the fact that every
individual stands in a dual relationship. On the
one hand, he sustains certain relations to the Federal State as a whole; and on the other he sustains certain relations to the State in which he may reside. The moment an
attempt is made to define the status of a person in a Federal State, therefore, not
one question, but
several must be answered: What is the relation of this person to the Federal State, as
against any and all foreign States ? What is the relation of this
person to the State in which he resides ? Further is it possible to be a citizen of one State and not
a citizen of Federal State ?
Such questions
did not arise in Canada and Australia when they became
federations. The reason was that persons residing in their respective units were natural born British subjects—a status which remained with them when the
Federation came. After the Federation the powers of naturalization
was given to the Federation and consequently every
one who is naturalized by the Federation is a citizen of the Federation and
therefore of every unit in it.
Such questions however did arise in the U.S.A., Switzerland and Germany because before the Federation their
units were all foreign.
States and their subjects were foreign subjects.
But, it is noteworthy that in all these cases a common citizenship was established as a part of
the federation. A rule was established whereby it
was accepted that a citizenship of one unit carried with it a citizenship of
the Federation.
The case of the Indian Federation is
similar to that of The U.S.A., Germany and Switzerland. The subject of an Indian State is a foreigner in British India as well as in another Indian State. The
subject of a British Indian Province is
a foreigner in every Indian State.
What does the Indian Federation do with regard to this matter ? Does it forge a common Citizenship for all Units which become
members of the Federation
? The answer is no. A British
Indian will continue
to be a foreigner in every Indian State
even though it is a Federal State after the Federation, as he was before the Federation. Similarly a subject of a Federated Indian Stale will be a foreigner
in every British Indian Province after the Federation as he was before Federation.
There is no common nationality. The whole principle of the
Federation is that the ruler of a Federated State shall remain the ruler of the
State and his subjects shall remain his subjects and the Crown as the ruler of
the Federated Provinces shall remain the ruler of the Provinces and his
subjects shall remain his subjects. This difference in citizenship manifests
itself in two specific ways. Firstly, it manifests itself in the matter of
right to serve. Federation being established
under the Crown, only persons who are subjects of the Crown are entitled to
serve under it. This is recognised by
Section 262. This of course is an
injustice to the subjects of the States.
To prevent this injustice which of course is a logical consequence of
difference of citizenship, power is given to the Secretary of State to declare
the subjects of the Indian States of
affairs and although the injustice to
Indian State subjects is mitigated, the injustice against
British Indians in the matter of right to employment in Indian States
continues. For, Indian States are not required to declare that British Indians
shall be deemed to be eligible for service under
them. That notwithstanding Federation such an anomaly should exist shows that
this Federation is a freak.
Secondly, this difference in
citizenship shows itself in the terms of the oath prescribed for members of the
Legislature by Schedule IV.
In the case of a member who is a
British subject the form of the oath is as under:
"I, A.B., having been elected (or
nominated or appointed) a member of this Council (or Assembly), do solemnly
swear (or affirm) that I will be faithful and bear true allegiance to His
Majesty the King, Emperor of India, His heirs and
successors, and that I will faithfully discharge
the duty upon which I am about to enter."
In the case of a person who
is a subject of a Ruler of an Indian State the form of the oath is as follows:
"I, A.B., having been elected (or
nominated or appointed) a member of this Council (or Assembly), do solemnly
swear (or affirm) that saving the faith and allegiance which I owe to C.D„ his heirs and successors, I will be faithful and
bear true allegiance in any capacity as Member of this Council (or Assembly) to
His Majesty the King. Emperor of India, His heirs
and successors, and that I will faithfully
discharge the duty upon which 7 am about to enter."
The subject of an Indian State, it is obvious from the terms of the
oath, owes a double allegiance. He owes allegiance
to the ruler of his State and also to the King.
Superficially the position seems not very
different from what one find in the United States. In the United States the
individual is a citizen of the Union as well as of
the State and owes allegiance to both powers. Each power has a right to Command
his obedience. But ask the question, to which, in
case of conflict, is obedience due and you will see the difference between the
two. On this question this is what Bryce has to
say:
"The right of the State to obedience
is wider in the area of matters which it covers. Prima fade every State-law, every
order of a competent State authority binds the citizen, whereas the National
government has but a limited power; it can
legislate or command only for certain purposes or
on certain subjects. But within the limits of its power, its authority is higher than that of the State,
must be obeyed even at the risk of disobeying the
State.
" Any act of a State Legislature or
a State Executive conflicting with the Constitution, or with an act of the
National Government, done under the Constitution, is really an act not of the
State Government, which cannot legally act against the Constitution, but of
persons falsely assuming to act as such government, and is therefore ipso jure void. Those
who disobey Federal authority on the ground of the commands of a State
authority are therefore insurgents against the Union who must be coerced by its
power. The coercion of such insurgents is directed not against the State but
against them as individuals though combined
wrongdoers. A State cannot secede and cannot rebel. Similarly, it cannot be
coerced.” Can the Federal Government in India take
the stand which the Union Government can when there
is a conflict of allegiance? There can be no doubt that it cannot, for the
simple reason that the allegiance to the King saves the allegiance to the
Ruler. This is a very unhappy if not a dangerous situation. (5) Strength of the
Federal Frame
The existence in the country of one
Government which can speak and act in the name of and with the unified will of
the whole nation is no doubt the strongest Government that can be had and only
a strong Government can be depended upon to act in an
emergency. The efficiency of a Governmental system must be very weak where
there exists within a country a number of Governments
which are distinct
centres of force, which constitute separately organized political bodies into
which different parts of the nation's strength flows and whose
resistance to the will of the Central Government is likely to be more effective
than could be the resistance of individuals,
because such bodies are each of them endowed with
a government, a revenue, a militia, a local
patriotism to unite them. The former is the case
where the unitary system of Government prevails. The latter is the case where
the Federal form of Government prevails.
The Indian Federation by reason of
the fact that it is a Federation has all the weaknesses
of a Federal form of Government. But the
Indian Federation has its own added weaknesses which are not to be found in
other Federations and which are likely to devitalise it altogether. Compare the
Indian Federation with the Federation of the
United States. As Bryce says.
" the authority of the national Government
over the citizens of every State is direct and immediate, not exerted through
the State organization, and not requiring the co-operation of the State Government. For most purposes the National
Government ignores the States, and it treats the citizens equally bound by its
laws. The Federal Courts, Revenue Officers and Post Office draw no help from
any Slate Officials, but depend directly on
Washington ............. There is no local self-Government in Federal Matters ............ the
Federal authority, be it executive or judicial,
acts upon the citizens of a State directly by means of its own officers who are
quite distinct from and independent of State Officials. Federal indirect taxes,
for instance, are levied all along the coast and over the country by Federal customhouse collectors and excise men
acting under the orders of the treasury department
at Washington. The judgments
of Federal Courts are carried out by U.S. Marshals, likewise dispersed over the country
and supplied with a staff of assistants. This is a provision of the utmost
importance, for it enables the central, national Government to keep its fingers
upon the people everywhere, and make its laws and
the commands of its duly constituted authorities respected whether the State
within whose territory it acts be heartily loyal or not, and whether the law
which is being enforced be popular or abnoxious. The machinery of the national
Government ramifies over the whole union as the
nerves do over the whole body, placing every point in direct connection with
the Central executive.”
Not one of these things can be predicated of the Indian Federation. It
is a dependent Government and its relation with
the people is not direct.
In the
United States, the States as States have no place in the Central
Government and although the States elect representatives to the Federal Legislature, political action at the centre does
not run in State channels. There is no combination of
States into groups and it is not the fashion for States to combine in an
official way through their State organizations.
How different is the Indian Federation! States, as such, have been given de jure recognition, they have been given
de jure
exemptions, and immunities from law. There are great possibilities of combined action
and counteraction by States and Provinces over these exemptions and immunities.
This is another reason which leads to the feeling
that the Indian Federation will have very
little vitality.
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