CERTIFICATE

This is to certify that VIVEK KUMAR, a bona-fide research scholar in

Faculty of Law, Maharshi Dayanand University, Rohtak has satisfactorily
prepared the thesis under the title “CENTRE-STATE RELATIONS AND
COOPERATIVE FEDERALISM UNDER INDIAN CONSTITUTION;
A CRITICAL STUDY” under my supervision and guidance. To the best of
my knowledge and belief, the work is original. I am satisfied that the work is
worthy of care for the award of degree of Doctor of Philosophy in Law.

DR. JITENDER SINGH DHULL

(Supervisor)
Faculty of Law
Maharshi Dayanand University
Rohtak-124001

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 ACKNOWLEDGEMENT

Traditional and formal words of acknowledgement will not project the picture of the
volcano of feelings while expressing deep sense of gratitude to many a known and
unknown hands which pushed me forward, lips put elixir in my chest organ, learned
souls put me on the right path and enlightened me with the experience, knowledge and
wisdom. I am sure no words can adequately express my feelings and joy. I shall remain
grateful to all of them.

At the outset of this epistle, I consider myself fortunate and greatly privileged to have
work under the aegis of Dr. Jitender Singh Dhull. There benevolent guidance, adroit
methodology of working, meticulous supervision, whole hearted encouragement and
critical appreciation in the execution of my research work were primarily responsible
for the present accomplishment. He always encouraged me and underpinned my efforts
and always helped to placate the embattled situations. Thank you very much sir for the
trust you had in my ability.

I am extremely grateful to (Dr. KavitaDhull, Head, Faculty of Law, Maharshi

Dayanand University, Rohtak, and all the other Faculty members for their valuable
suggestions, constant encouragement, and gentle approach throughout this study.

I am evenly grateful to the Library staff of the Faculty and the University who amicably
provided me the rich text for my research work.

I take privilege to acknowledge my friends and in troubleshooting during the entire

duration of my research. In spite of their huge commitments, they were supporting me
morally throughout this study. Words fail to describe their love and care during the
arduous period of my research work.

During the course of present study, I received help from many people in some way or
other. It is extremely difficult to thank all of them individually by name. This
shortcoming may please be pardoned.

Place: Rohtak (VIVEK KUMAR)

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 ABBREVIATIONS

A.C : Appeal Cases

A.E.R: All England Reports

AIR: All India Reporters

Art Article

BNA British North America

C.C Canadian Constitution

C.W.R.: Supreme Court Weekly Report

G.S.T.: Goods and Service Tax

H.C.: High Court

J.I.L.I: Journal of Indian Law Institute

J.P.C: Joint Parliamentary Committee

RBI Reserve Bank of India

RNR Revenue Natural Rate

S.C: Supreme Court

S.C.C.: Supreme Court Cases

S.C.R: Supreme Court Reports

U.P. Utter Pradesh

V.A.T : Value Added Tax

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 TABLE OF CASES
 A.S. Krishna v. State of Madras

 Abdul Quader& Co. V. Sales Tax Officer, Hyderabad

 AG.for Ontario V. Canada Temperance, Federation

 Agencia Commercial International Ltd. v. Custodian of Banco National

Ultramarino

 Amalgamated Society of Engineers V. Adelaide Steamship Co.

 Amir Khan V. State

 AshwanderV. T. V.A.

 Att. Gen. Ontario V. Att. Gen. Canada

 Balaji V. Income-Tax Officer

 BanarasiDass V. Wealth Tax Officer

 Barium Chemicals Ltd. V. Company Law Board

 Bengal Immunity Co. Ltd. v. State of Bihar

 Calcutta Gas Co. V. State of West Bengal

 Champion v. Ames

 Check- Post Officer V. K.P. Abdulla &Bros

 Chitralekha V. State of Mysore

 Corporation of Calcutta V. Liberty Cinema

 Coughlin v, Ontario Highway Transport Board

 Deepchand v. State of U.P.

 DevikaBiswas v UOI

 Ex- Army‟s Protection Services Pvt. Ltd. v. UOI

 Farey V. Burvett

 Fort Frances Pulp and Power Co. Ltd. V. Manitoba Free Press Co. Ltd.

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 Gajapati V. State of Orissa

 Governor-General v. Raleigh Investment Co.

 Gujarat University V. Sri Krishna

 Hari Krishna V, Union of India

 Hingir-Rampur Coal Company V. State of Orissa

 Housten, East & W. Texas Rly. Co. V. U.S. (Shreveport Rate Case)

 JaoraSugar MillsLtd. V. State of Madhya Pradesh

 JayantilalAmritLalShodhan v. F.N. Rana And Others

 JohannessonV. West St. Paul

 Le Mesurier V. Cannor

 MithanLal V. State of Delhi

 Mobarak Ali Ahmed V. State of Bombay

 Narothamdas case

 National Labour Relations Board V. Jones Laughlin Steel Corp

 Pronto Uranium Mines Ltd., etc., V. Ontario Labour Relations Board

 Punjab D. Industries Case

 Rohtas Industries Ltd. V. S.D. Agarwal

 Russell V. Reg

 Russet V. The Queen

 S.R. Bommai v. UOI

 S.S.Bola v. B.D.Sardana

 Sajjan Singh V. State of Rajasthan

 SardarBaladev Singh V. Commissioner of Income-Tax

 Shingara Singh V. State of Punjab

 SondurGopal v. SondurRajni

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 State of Bihar V. Kameshwar Singh

 State of Bombay V. F.N. Balsara

 State of Bombay V. Narothamdas

 State of Madras V. Gannon Dunkerley&CO.

 State of Orissa V.M. A. Tulloch &Co.

 State of Rajasthan V. Chawla and Pohumal

 Steward Machine Co. V. Davis

 SwarajAbhiyan(v) v UOI

 TikaRamji V. State of U.P.

 U. S. V. Darby Lumber Co.

 U.S. V. South Eastern Underwriters Association

 United Province V. Atiqa Begum

 Wickard V. Filburn

 Zaverbhai Amaldas V. State of Bombay

 Zubeda Begum v. Union of India

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 INDEX

Page No.
 CERTIFICATE ii
 DECLARATION iii
 ACKNOWLEDGEMENT iv
 ABBREVIATION v
 TABLE OF CASES vi
 INDEX ix

Chapter I- INTRODUCTION 1
1.1 INTRODUCTION 1
1.2 RESEARCH METHODOLOGY 6
1.3 RESEARCH HYPOTHESES 6
1.4 REVIEW OF LITERATURE 7
1.5 CHAPTER SCHEME 10

CHAPTER II-NATURE AND HISTORICAL BACKGROUND

OF COOPERATIVE FEDERALISM 13
2.1 MEANING OF COOPERATIVE FEDERALISM 13
2.2 ORIGIN OF COOPERATIVE FEDERALISM 15
2.3 HISTORY OF THE FEDERAL CONCEPT IN INDIA 16
2.4 ELEMENTS THAT SUPPORT COOPERATIVE FEDERALISM 26
2.5 COOPERATIVE FEDERALISM IS NOURISHED DUE TO CRISIS
OF WAR 27
2.6 COOPERATIVE FEDERALISM IS NOURISHED
DUE TO TECHNOLOGICAL AND COMMUNICATION GROWTH 29
2.7 ESSENTIAL FEATURES OF A FEDERAL POLITY 30
2.8 FEDERALISM IN THE INDIAN CONSTITUTION 31
2.9 CLASSIC FEDERALISM AND COOPERATIVE FEDERALISM- A
COMPARISON 32
2.10 INTER-STATE COUNCIL: AN IMPORTANT PART
OF COOPERATIVE FEDERALISM 35

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CHAPTER III- DISTRIBUTION OF LEGISLATIVE POWER 37
3.1 TERRITORIAL OPERATION OF LAWS IN INDIA 66
3.2 RESCUING STATE LAWS 67
3.3 DOCTRINE OF TERRITORIAL NEXUS 68
3.4 DOCTRINE OF TERRITORIAL NEXUS AND LEGISLATION
UNDER GOVERNMENT OF INDIA ACT, 1935 68
3.5 DELIMITATION OF LEGISLATIVE FIELDS AND
PROBLEMS OF INTERPRETATION 69
3.6 PROBLEMS RELATING TO LEGISLATIVE COMPETENCY 71
3.7 LEGISLATIVE ENTRIES AND PROBLEMS OF INTERPRETATION 72
3.7.1 DOCTRINE OF ANCILLARY AND INCIDENTAL POWERS 72
3.7.2 DOCTRINE OF HARMONIOUS CONSTRUCTION 80
3.7.3 LIBERAL AND CONSTRUCTION RULE 86
3.8 NEXUS WITH LEGISLATIVE HEADS, THE “DOCTRINE OF PITH AND SUBSTANCE”
AND OTHER RELATED DOCTRINES 87
3.9 DOCTRINE OF COLOURABLE LEGISLATION 97
3.10 EFFECT OF CONDITIONAL ENUMERATION OF THE LEGISLATIVE POWERS AND
THE DOCTRINES OF “DIRECT IMPACT” AND “DENUDATION” 102
3.11 IMPACT OF SCHEMATIC ENUMERATION ON LEGISLATIVE COMPETENCE 111
3.12 CONFLICTING COMPETENCE IN THE CONCURRENT FIELD 114
3.12.1DOCTRINE OF PARAMOUNTCY 114
3.12.2 THE PRINCIPLE OF SUPERSESSION 121
3.13 DOCTRINE OF PERMISSIBLE ENCROACHMENTS AND
POWER OF TRENCHING 128
3.14 LEGISLATION FOR UTS 128
3.15 ASSUMING STATE'S LEGISLATIVE POWERS BY PARLIAMENT IN THE NATIONAL 131
INTEREST
3.16 THE POSITION IN OTHER MAJOR FEDERAL CONSTITUTIONS 135
3.17 AN ASSESSMENT OF THE POSITION IN INDIA 151
3.18 LEGISLATION DURING EMERGENCY: 153
3.19 FEDERAL LEGISLATION WITH RESPECT TO STATE SUBJECTS WITH
STATE CONSENT 167

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3.20 FEDERAL LEGISLATION WITH RESPECT TO STATE SUBJECTS TO
IMPLEMENT INTERNATIONAL TREATIES 176

CHAPTER-IV ADMINISTRATIVE RELATIONS 190

4.1 OBLIGATION OF STATES TO ALLOW UNION LAWS AND EXECUTIVE ACTS
AN UN-INTERRUPTED OPERATION 192
4.2 INTER-GOVERNMENTAL DELEGATION OF FUNCTIONS 201
4.3 INTER-STATE DISPUTES AND ROLE OF THE UNION GOVERNMENT 222
4.4 SARKARIA COMMISSION RECOMMENDATIONS ON INTER-STATE RIVER WATER
DISPUTES. 229
4.5 CENTRE‟S OBLIGATIONS WHEN CONSTITUTIONAL
MACHINERY FAILS IN STATE 229
4.6 THE AMBIT OF THE POWER TO ENSURE PROPER FUNCTIONING OF
CONSTITUTIONAL MACHINERY IN STATES 230
4.7 JUDICIAL REVIEW OF PROCLAMATION UNDER
ARTICLE 356 240
4.8 CENTRE AGENCIES IN THE STATES 241
4.8.1 GOVERNOR AS AN AGENT OF THE PRESIDENT 241
4.8.2 ALL INDIA SERVICES 245
4.8.3 INSTITUTION OF JOINT PUBLIC SERVICE COMMISSION FOR THE
TWO OR MORE STATES 247
4.9 SARKARIA COMMISSION RECOMMENDATION RELATING TO ADMINISTRATIVE
RELATIONS BETWEEN CENTRE AND STATE 248

CHAPTER- V: FINANCIAL RELATIONS 249

5.1 RISE OF FEDERAL FINANCE IN INDIA: 249
5.2 FINANCIAL RELATIONS UNDER MONTFORD REFORMS 256
5.3 FEDERAL FINANCE UNDER THE GOVERNMENT OF
INDIA ACT 1935 260
5.4 THE CONSTITUTION AND THE ACT OF 1935 262
5.5 THE CONSTITUTIONAL PATTERN 264
5.6 DISTRIBUTION OF TAX BASES AND REVENUE 267
5.7 TAXES IMPOSED BY THE UNION, BUT EARMARK TO

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THE STATES 269
5.8 DIVISIBLE TAXES 278
5.9 DOUBLE TAXATION 293
5.10 FEDERAL GRANTS-IN-AID 294
5.11 THE FINANCIAL BALANCE OF POWER BETWEEN
CENTRE AND STATE 307
5.12 THE DOCTRINE OF IMMUNITY OF INSTRUMENTALITIES
AND THE INDIAN CONSTITUTION 313
5.13 FINANCE COMMISSION OF INDIA 317
5.14 14TH FINANCE COMMISSION RECOMMENDATION REGARDING
REVENUE DISTRIBUTION 318
TH
5.15 15 FINANCE COMMISSION‟ REPORT FOR THE
YEAR 2020-21 319
5.16 THE RECOMMENDATIONS IN THE FIRST REPORT 2020-21: 319
5.17 SOME CHALLENGES IN IMPLEMENTATION OF GST 319
5.18 JOURNEY OF PLANNING COMMISSION 320
5.19 THE ESSENCE OF COOPERATIVE FEDERALISM IN
PLANNING SYSTEM. 321
5.20 PLANNING COMMISSION TO NITI AAYOG 322
5.21 RELATION BETWEEN FINANCE COMMISSION AND
THE PLANNING COMMISSION (NOW NITI AAYOG) 323
5.22 JOURNEY OF GST 325

CHAPTER 6: CONCLUSIONS AND SUGGESTIONS 330

BIBLIOGRAPHY 337

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