The theory of territorial nexus is being used by the judicial system to determine whether there is a territorial nexus between the legislation and the authority of the legislative body. In the absence of this, the law violates the territorial nexus ideology and may be declared unconstitutional. To put it another way, any legislature can only pass legislation on issues outside its territorial jurisdiction if it creates a territorial nexus.
In this article, we will specify the philosophy or theory of territorial nexus and take a glance at some famous Supreme Court decisions where this Doctrine was used to determine the legality of a statute.
Doctrine of Territorial Nexus
It implies that legislation enacted by a legislature is not enforceable beyond the state unless the state & the object have a reasonable nexus or connection.
Territorial nexus is a term that refers to the intersection of two or more
Parliament has the competence to create laws for extraterritorial activities or legislation for the whole or any part of the country, according to Article 245 of the Indian Constitution. The state legislature has the authority to enact laws that apply to the entire state or just a part of it. As a result, both the union & the state have geographical control over the making of laws.
Article 246 of Indian Constitution
The following is stated in:
- The union list enumerates the subject topics for which Parliament has explicit legislative jurisdiction (list I of the 7th schedule)
- For the subjects listed in the state list, the state has the authority to enact legislation (list II of the 7th schedule)
- For the subject areas mentioned in the concurrent list, respectively the state & federal (union) governments have the authority to enact legislation (list III of the 7th schedule).
If the Indian parliament passes a law concerning extra-territorial operations, it is not subject to challenge U/A 245(2) of the Indian constitution. As a consequence, the constitutionality of legislation can’t be disputed. In this specific instance, a court system is obligated by law to uphold the rule of law the laws of the extra-territorial operation enacted. This legislation cannot be ruled unconstitutional.
Provisions of the Constitution
The doctrine’s authority is derived from Art. 245 of the Constitution Of India. Article 245 (2) states that no law enacted by the Parliament is invalid because it has extra-territorial application, i.e. it has an effect outside of India’s borders.
Important and Major Decisions
A.H Wadia v. Income-tax Commissioner(1948)
It was determined in A.H. Wadia v. Income Tax Commissioner (1948) that a major challenge to the extraterritoriality of implementation couldn’t be raised against a Legislative Act of Parliament on the basis of a legal validity challenge.
State of Bombay vs. RMDC, AIR 1957, SC
Whereas the defendant didn’t reside in Bombay, he held competitions with cash rewards through a news publication published and printed in Bangalore that had a huge circulation in Bombay. All of the necessary elements for the competition, such as filling out the forms & paying entry fees, the event took place in Bombay. The state government attempted to impose a tax on the defendant for conducting activity in the state.
The Apex Court had to decide whether the defendant, the competition’s organizer, who was situated outside of Bombay, could have been duly taxed under the Act.
It was determined that all of the events that the contender is normally expected to perform took place mostly, if not completely, within Bombay. These situations formed an adequate territorial nexus for the state of Bombay to levy a tax on the defendant.
Tata Iron & Steel Company vs. Bihar State
The Sales Tax Act, adopted by the Bihar State, allows for the application of a sales tax.
The issue is whether the sale was accomplished within the state or outside the state if the items were manufactured, discovered, and produced within the state.
The court determined that there was adequate territorial nexus & upheld the Act’s validity.
The facts or circumstances of the case will ascertain whether there is a sufficient & adequate nexus between the legislation & the object sought to be taxed.
It was stated that the adequacy of the territorial linkage required consideration of two aspects: –
- The linkage should be real & not illusionary; and
- The responsibility deliberately sought to be imposed should be relevant to that connection.
Parliament has the authority to enact legislation both within its territorial jurisdiction and for extra-territorial general purposes with a legitimate and legal linkage with India. As the legislature has the authority to do so, any legislation or laws pertaining to this subject fall under its purview.
The legitimacy of these statutes cannot be challenged. Any law enacted by the parliament that has no nexus with India will be declared extra vires and will be regarded as laws enacted for a foreign country.
As a result, any law made by the parliament that has a genuine correlation to India cannot be ruled unlawful or unconstitutional. It would be extra vires if such laws approved by parliament formed no nexus with India.
The legislative authority is granted to the legislature in order to pass laws within the territorial boundaries and also for the sole purpose of taking cognizance of extra-territorial general purposes & exercising state or collective powers as stated in our constitution.
The principle of trust of the public states that all laws enacted by the legislature with regard to extra-territorial operational processes should be implemented for the purpose of preserving India’s welfare & security, implying that no legislation for extra-territorial operations should be enforced if there is no nexus between the law & legislation with India.
Important Role of Territorial Nexus
In Indian law, the Territorial Nexus plays an Important Role:
As previously stated in this article, Art. 245 of the Constitution of India specifies the nature and extent to which parliamentary powers are delegated to parliament or a state legislature for the purpose of enacting legislation pertaining to the territory.
Parliament has the authority & right to enact laws & legislation in the areas over which it has jurisdiction. Parliament has jurisdiction over the entire country or any portion of it. They could also be enacted by parliament for extra-territorial activities if the law has a strong sufficient connection to India.
These regulations cannot be called into question or declared unconstitutional. All laws, however, must adhere to the Indian constitution’s provisions.
The authority granted by parliament is not absolutely accurate. Extra-territorial laws are enacted by the parliament with the aim of operating effectively outside of India’s borders. The state legislature lacks the power to enact legislation governing extra-territorial operations. Unfortunately, there is one exception to the state legislature’s limitation, and that is territorial nexus.
If it is determined that there is a sufficient linkage between the object and the legislation enacted by the state legislature will have an impact beyond the state’s borders.
In order to invoke territorial nexus jurisdiction, the following conditions must be met:
- If a state engages in extraterritorial operations,
- If the object, as well as the state, have a legitimate relationship. It must be apparent that the object must always be located outside of the state’s territorial boundaries, but it should have a territorial link to the state.
In summary, Art. 245 & 246 of the Indian Constitution limit the state’s jurisdiction. There is one exception, however, which permits a state government to pass laws for extra-territorial objectives if the purpose and the state are sufficiently connected directly.
It implies that the object is outside the state’s geographical boundaries yet has a territorial relationship with it.
The territorial nexus has a wide range of applications and therefore is applicable beyond India’s borders. Territorial connection is a framework that enables the force of law to simply extend it beyond a country’s borders.