11/17/2015

ConsitutionalLaw,LL.B3rdterm:TopiBasar:Article245DoctrineofTerritorialNexus
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Consitutional Law, LL.B 3rd term: Topi Basar

Tuesday,August22,2006

Article 245 Doctrine of Territorial Nexus

CasesStateofBombayvs.R.M.D.C(AIR1957SC699)
TataIronandSteelCompanyvs.BiharState(AIR1958SC482)
StateofBiharVs.Sm.CharusilaDasi,(AIR1959SC1002)

Article245Extentoflawsmadebyparliamentandbythe
legislaturesofstates
1)Subjecttotheprovisionsofthisconstitution,Parliamentmay
makelawsforthewholeoranypartoftheterritoryofIndia,and
thelegislatureofastatemaymakelawsforthewholeoranypart
ofthestate.
2)Nolawmadebyparliamentshallbedeemedtobeinvalidonthe
groundthatitwouldhaveextraterritorialoperation.
Subjecttotheprovisionsofthisconstitution,thisphrasemeansthat
thepowerenjoyedbytheparliamenttomakelawsforthewholeor
anypartoftheterritoryofIndiawillbereadinsubjecttoother
provisionsoftheconstitution.Inotherwords,thispowerisnot
absolute.Otherprovisionslikethedistributionof
powers,fundamentalrightsandotherprovisionsoftheconstitution
asinterpretedbythecourts.

About
Thisisthehomepageforthecourse
onConstitutionalLaw,LawCenter1,
FacultyofLaw,DelhiUniversity,
India.ByTopiBasar,Lecturer,
FacultyofLaw.DelhiUniversity.
topi@topibasar.in
Blog:http://topibasar.blogspot.com

About Me
Name:DrTopiBasar
Asst.Prof.,FacultyofLaw,University
ofDelhi,India.
Viewmycompleteprofile

Previous
Federalism
Introduction
Coursesyllabi(Constitutionallaw)
KeyTerms

ExtraterritorialoperationLawmadetooperateoutside
territoriallimitsofIndia.
Statelawswouldbevoidifithasextraterritorialoperationi.e.,
takeseffectoutsidethestate.However,thereisoneexceptionto
thisgeneralrule.Astatelawofextraterritorialoperationwillbe
validifthereissufficientnexusbetweentheobjectandthestate.
ThisisclarifiedbythecaseStateofBombayvs.R.M.D.C.
TheDoctrineofTerritorialnexuscanbeinvokedunderthefollowing
circumstances
Whetheraparticularstatehasextraterritorialoperation.
Ifthereisaterritorialnexusbetweenthesubjectmatterofthe
Actandthestatemakingthelaw.
Itsignifiesthattheobjecttowhichthelawappliesneednotbe
physicallylocatedwithintheterritorialboundariesofthestate,but
musthaveasufficientterritorialconnectionwiththestate.
Astatemaylevyataxonaperson,property,objectortransaction
notonlywhenitissituatedwithinitsterritoriallimits,butalsowhen
ithasasufficientandrealterritorialconnectionwithit.
StateofBombayvsRMDCTheRespondentwasnotresidingin
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ConsitutionalLaw,LL.B3rdterm:TopiBasar:Article245DoctrineofTerritorialNexus

BombaybutheconductedCompetitionswithprizemoneythrougha
newspaperprintedandpublishedfromBanglorehavingawide
circulationinBombay.Alltheessentialactivitieslikefillingupof
theforms,entryfeesetcforthecompetitiontookplacein
Bombay.Thestategovt.soughttolevytaxtherespondentfor
carryingonbusinessinthestate.
ThequestionfordecisionbeforetheSupremeCourtwasifthe
respondent,theorganiserofthecompetition,whowasoutsidethe
stateofBombay,couldbevalidlytaxedundertheAct.
DecisionItwasheldthatthereexistedasufficientterritorialnexus
toenabletheBombayLegislaturetotaxtherespondentasallthe
activitieswhichthecompetitorisordinarilyexpectedtoundertake
tookplacemostlywithinBombay.

TataIronAndSteelCompanyvs.BiharStateThestateofBihar
passedaSales
TaxActforlevyofsalestaxwhetherthesalewasconcludedwithin
thestateoroutsideifthegoodswereproduced,foundand
manufacturedinthestate.Thecourtheldtherewassufficient
territorialnexusandupheldtheActasvalid.Whetherthereis
sufficientnexusbetweenthelawandtheobjectsoughttobetaxed
willdependuponthefactsandcircumstancesofaparticularcase.
Itwaspointedoutthatsufficiencyoftheterritorialconnection
involvedaconsiderationoftwoelementsa)theconnectionmust
berealandnotillusoryb)theliabilitysoughttobeimposedmust
bepertinenttothatconnection.
StateofBiharvsCharusilaDasi
BiharlegislatureenactedtheBiharHinduReligiousTrusts
Act,1950,fortheprotectionandpreservationofproperties
appertainingtotheHindureligioustrusts.
TheActappliedtoalltrustsanypartofwhichwassituatedinthe
stateofBihar.
TheRespondentcreatedatrustdeedofherpropertiesofseveral
housesandlandinBiharandCalcutta.Thetrustbeingsituatedin
Bihar.
ThemainquestionfordecisionwaswhethertheActapplytotrust
propertieswhicharesituatedoutsidethestateofBihar.
Thecourthadtodecidewhetherthetrustthuscreatedwasa
privatetrustorpublictrust.
CanthelegislatureofBiharmakealawwithrespecttosucha
trustsituatedinbiharandotherpropertiesappertainingtosuch
trustwhicharesituatedoutsideBihar?
DecisionApplyingthedoctrineofterritorialnexus,theSupreme
courtheldthattheActcouldaffectthetrustpropertysituated
outsideBihar,butappertainingtoatrustsituatedinBiharwhere
thetrusteesfunctioned.TheActaimstoprovideforthebetter
administrationofHindureligioustrustsinthestateofBihar.The
trustbeingsituatedinBiharthestatehaslegislativepoweroverit
andalsooveritstrusteesortheirservantsandagentswhomustbe
inBihartoadministerthetrust.
Whatisnecessaryisthattheconnectionbetweenthetrustandthe
propertyappertainingtheretoisrealandnotillusoryandthatthe
religiousinstitutionandthepropertyappertainingtheretoformone
integratedwholeasonecannotbedissociatedfromtheother.

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Thecourthasappliedthedocrineofterritorialconnectionornexus
toincometaxlegislation,salestaxlegislationandalsoto
legislationimposingataxongambling.
postedbyDrTopiBasarat1:33PM

2 Comments:
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preethi,at3:00AM

Likedit...Thanksalot!!!
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