Theory of territorial nexus

various case laws are dealt with including landmark as well as recent. described about the territorial relations in legislative bodies or authorities.

1. Theory Of Territorial Nexus Bharati Vidyapeeth Deemed University (New Law College) Pune (Maharashtra) Divya Khandelwal LL.M .- 1 year

2. Introduction Distribution of powers is an essential feature of Federalism. Power is divided between the states and the centre to Legislative, Administrative and Financial authorities. Centre legislative body + State legislative body = legislative relations Function of legislative body is to make laws . Power to make laws include power to give effect to the law prospectively as well as retrospectively . The legislature has power to alter a law retrospectively.

3. Legislative relations (Article - 245 to 255) Constitution of India makes two-fold distribution of legislative powers :

4. Territory means boundaries + Nexus means relations . Invoked under two circumstances : Whether a particular state has extra-territorial operation. If there is a territorial nexus between the subject-matter of the act and the state making the law . It signifies that the object to which the law is applied need not be physically located within the territorial boundaries, but what is necessary is that it should have a sufficient territorial connection . Doctrine of Territorial – Nexus

5. Article – 245 Extent of laws made by Parliament and by the Legislatures of States Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India , and the Legislative of a State may make laws for the whole or any part of the State . No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation .

6. Wallace v. Income-Tax commissioner, Bombay A.I.R. 1948 P.C. 118 Held that the company could levy an income tax on the entire income and not only on the portion accruing from India. The sufficient territorial nexus is present between the Company and India.

7. A. H. Wadia v. Income-tax Commissioner A.I.R. 1949 F.C. 18 S.C. Held that, “In the case of Sovereign legislature, question of extra-territoriality of any enactment can never be raised in the municipal courts as a ground for challenging its validity. The legislation may offend the rules of International law, may not be recognised by foreign courts, or there may be practical difficulties in enforcing them but these are questions of policy with which the domestic tribunals are not concerned.”

8. State of Bombay v. R.M.D.C. A.I.R. 1957 SC 699 The State of Bombay levy taxes on lotteries and prize competitions. It was held valid because there is sufficient territorial nexus between the State of Bombay and Bangalore as it was printed and published in Bangalore but had wide circulation in Bombay.

9. Held that there was sufficient territorial nexus and upheld the Act as valid. Whether there is sufficient nexus between the law and object sought to be taxed will depend upon the faces and circumstances of a particular case. Tata Iron and Steel Co. Ltd. v. State of Bihar A.I.R. 1958 SC 452

10. SC held that the Act could affect the trust property situated outside Bihar, but Appertaining to a trust situated in Bihar where the trustees functioned. What is necessary is that the connection between the trust and the property appertaining thereto is real and not illusory and that the religious institution and the property appertaining thereto form one integrated whole as one cannot be dissociated from the other. State of Bihar v. Charusila Dasi A.I.R. 1959 SC 1002

11. State of A.P. V. National Thermal Power Corporation Ltd. (2002) 5 SCC 203 S.C. Has stated the principle of Territorial Nexus as follows : “It is by reference to the ambit or limits of territory by which the legislative powers vested in the Parliament and the State Legislatures are divided in Art-245 . Generally speaking, a legislation having extra-territorial operation can be enacted only by parliament and not by any State legislature, possibly the only exception being one where extra-territorial operation of a State Legislation is sustainable on the ground of territorial nexus. Such territorial nexus, when pleaded must be sufficient and real and not illusory .”

12. G.V.K. Inds . Ltd. and Anr . V. Income Tax Officer and Anr . (2011) 4 SCC 36 Held that any law enacted by the parliament with respect to extra-territorial aspects or causes that have no nexus with India would be ultra vires and would be law made for a foreign territory .

13. Sondur Gopal v. Sondur Rajini A.I.R. 2013 SC 2678 The general principle underlying of States is that laws made by one State cannot have operation in another State. A law which has extra-territorial operation cannot directly be enforced in another State but such a law is not invalid and saved by Article-245(2) of the constitution.

14. Conclusion Thus there is no general definition of doctrine and what territorial connection or nexus is necessary for an application of the law to a particular object . For considering and the sufficiency of the territorial connection involves the following : the connection must be real and not illusory, & the liability sought to be imposed under the act must be pertinent or relevant to that connection.