(e)  “office  bearer”  means  a  President,  Vice-President,  Chairperson,

Vice-Chairperson, Secretary or Treasurer, of a co-operative society and

includes any other person to be elected by the board of any co-operative

society;

(f) “Registrar”  means the Central Registrar appointed by the Central

Government in relation to the multi-State co-operative societies and the

Registrar for co-operative societies appointed by the State  Government

under  the  law  made  by  the  Legislature  of  a  State  in  relation  to

co-operative societies;

(g) “State Act” means any law made by the Legislature of a State;

(h)  “State  level  co-operative  society”  means  a  co-operative  society

having its area of operation extending to the whole of a State and defined

as such in any law made by the Legislature of a State.

2 4 3 ZI .   Incorporation  of  co-operative  societies.—Subject  to  the

provisions of this Part, the Legislature of a State may, by law, make provisions

with  respect  to  the  incorporation,  regulation  and  winding  up  of  co-operative

societies based on the principles of voluntary formation, democratic    member-

control, member-economic participation and autonomous functioning.

1. Ins. by the Constitution (Ninety-seventh Amendment) Act, 2011, s. 4 (w.e.f. 15-2-2012).

168

243ZJ.  Number  and  term  of  members  of  board  and  its  office

bearers.—(1)  The board  shall  consist  of  such  number  of  directors  as  may  be


bearers.—(1)  The board  shall  consist  of  such  number  of  directors  as  may  be

provided by the Legislature of a State, by law:

Provided  that  the  maximum  number  of  directors  of  a  co-operative

society shall not exceed twenty-one:

Provided further that the Legislature of a State shall, by law, provide for

the  reservation  of  one  seat  for  the  Scheduled  Castes  or  the  Scheduled  Tribes

and two seats for women on board of every co-operative society consisting of

individuals  as  members  and  having  members  from  such  class  of  category  of

persons.

(2)  The  term  of  office  of  elected  members  of  the  board  and  its  office

bearers  shall  be  five  years  from  the  date  of  election  and  the  term  of  office

bearers shall be conterminous with the term of the board:

Provided  that  the  board  may  fill  a  casual  vacancy  on  the  board  by

nomination  out  of  the  same  class  of  members  in  respect  of  which  the  casual

vacancy  has  arisen,  if  the  term  of  office  of  the  board  is  less  than  half  of  its

original term.

(3)  The  Legislature  of  a  State  shall,  by  law,  make  provisions  for

co-option of persons to be members of the board having experience in the field

of banking, management, finance or specialisation in any other field relating to


co-option of persons to be members of the board having experience in the field

of banking, management, finance or specialisation in any other field relating to

the objects and activities undertaken by the co-operative society, as members of

the board of such society:

Provided  that  the  number  of  such  co-opted  members  shall  not  exceed

two  in  addition  to  twenty-one  directors  specified  in  the  first  proviso  to

clause (1):

Provided further that such co-opted members shall not have the right to

vote  in  any  election  of  the  co-operative  society  in  their  capacity  as  such

member or to be eligible to be elected as office bearers of the board:

Provided also that the functional directors of a co-operative society shall

also be the members of the board and such members shall be excluded for the

purpose of counting the total number of directors specified in the first proviso

to clause (1).

169

243ZK. Election of members of board.—(1) Notwithstanding anything

contained in any law made by the Legislature of a State, the election of a board

shall  be  conducted  before the  expiry  of  the term  of  the  board so  as to  ensure

that the newly elected members of the board assume office immediately on the

expiry of the term of the office of members of the outgoing board.

(2)  The  superintendence,  direction  and  control  of  the  preparation  of

electoral  rolls  for,  and  the  conduct  of,  all  elections  to  a  co-operative  society

shall vest in such an authority or body, as may be provided by the Legislature

of a State, by law:


shall vest in such an authority or body, as may be provided by the Legislature

of a State, by law:

Provided  that  the  Legislature  of  a  State  may,  by  law,  provide  for  the

procedure and guidelines for the conduct of such elections.

243ZL.  Supersession  and  suspension  of  board  and

interim

management.—(1)  Notwithstanding  anything  contained  in  any  law  for  the

time being in force, no board shall be superseded or kept under suspension for a

period exceeding six months:

Provided that the board may be superseded or kept under suspension in a

case—

(i) of its persistent default; or

(ii) of negligence in the performance of its duties; or

(iii) the board has committed any act prejudicial to the interests of

the co-operative society or its members; or

(iv) there is stalemate in the constitution or functions  of the board;

or

(v)  the authority or body as provided by the Legislature of a State,

by  law,  under  clause  (2)  of  article  243ZK,  has  failed  to  conduct

elections in accordance with the provisions of the State Act:

Provided further that the board of any such co-operative society shall not

be  superseded  or  kept  under  suspension  where  there  is  no  Government

shareholding  or  loan  or  financial  assistance  or  any  guarantee  by  the

Government:

Provided  also  that  in  case  of  a  co-operative  society  carrying  on  the

business of banking, the provisions of the Banking Regulation Act, 1949 shall

also apply:

170


business of banking, the provisions of the Banking Regulation Act, 1949 shall

also apply:

170

Provided  also  that  in  case  of  a  co-operative  society,  other  than  a

multi-State  co-operative  society,  carrying  on  the  business  of  banking,  the

provisions of this clause shall have the effect as if for the words “six months”,

the words  “one year” had been substituted.

(2)  In  case  of  supersession  of  a  board,  the  administrator  appointed  to

manage  the  affairs  of  such  co-operative  society  shall  arrange  for  conduct  of

elections  within  the  period  specified  in  clause  (1)  and  handover  the

management to the elected board.

(3)  The  Legislature  of  a  State  may,  by  law,  make  provisions  for  the

conditions of service of the administrator.

243ZM.  Audit  of  accounts  of  co-operative  societies.—(1)  The

Legislature  of  a  State  may,  by  law,  make  provisions  with  respect  to  the

maintenance of accounts by the co-operative societies and the auditing of such

accounts at least once in each financial year.

(2)  The  Legislature  of  a  State  shall,  by  law,  lay  down  the  minimum

qualifications  and  experience  of  auditors  and  auditing  firms  that  shall  be

eligible for auditing accounts of the co-operative societies.

(3) Every co-operative society shall cause to be audited by an auditor or


eligible for auditing accounts of the co-operative societies.

(3) Every co-operative society shall cause to be audited by an auditor or

auditing  firms  referred  to  in  clause  (2)  appointed  by  the  general  body  of  the

co-operative society:

Provided that such auditors or auditing firms shall be appointed from a

panel approved by a State Government or an authority authorised by the State

Government in this behalf.

(4)  The  accounts  of  every  co-operative  society  shall  be  audited  within

six months of the close of the financial year to which such accounts relate.

(5)  The  audit  report  of the  accounts  of  an apex  co-operative society,  as

may be defined by the State Act, shall be laid before the State Legislature in the

manner, as may be provided by the State Legislature, by law.

243ZN.  Convening  of  general  body  meetings.—The  Legislature  of  a

State  may,  by  law,  make  provisions  that  the  annual  general  body  meeting  of

every co-operative society shall be convened within a period of six months of

close of the financial year to transact the business as may be provided in such

law.

171

243ZO.  Right  of  a  member to  get information.—(1) The Legislature

of a State may, by law,  provide for access to every member of a co-operative

society to the books, information and accounts of the co-operative society kept

in regular transaction of its business with such member.

(2)  The  Legislature  of  a  State  may,  by  law,  make  provisions  to  ensure


in regular transaction of its business with such member.

(2)  The  Legislature  of  a  State  may,  by  law,  make  provisions  to  ensure

the  participation  of  members  in  the  management  of  the  co-operative  society

providing  minimum  requirement  of  attending  meetings  by  the  members  and

utilising the minimum level of services as may be provided in such law.

(3)  The  Legislature  of  a  State  may,  by  law,  provide  for  co-operative

education and training for its members.

243ZP.  Returns.—Every  co-operative  society  shall  file returns, within

six months of the close of every financial year, to the authority designated by

the State Government including the following matters, namely:—

(a) annual report of its activities;

(b) its audited statement of accounts;

(c) plan for surplus disposal as approved by the general body  of the

co-operative society;

(d) list of amendments to the bye-laws of the co-operative society, if

any;

(e) declaration regarding date of holding of its general body meeting

and conduct of elections when due; and

(f)  any  other  information  required  by  the  Registrar  in  pursuance  of

any of the provisions of the State  Act.

243ZQ.  Offences  and  penalties.—(1)  The  Legislature  of  a  State  may,

by law, make provisions for the offences relating to the co-operative societies

and penalties for such offences.

(2)  A  law  made  by  the  Legislature  of  a  State  under  clause  (1)  shall


and penalties for such offences.

(2)  A  law  made  by  the  Legislature  of  a  State  under  clause  (1)  shall

include the commission of the following act or omission as offences, namely:—

(a)  a  co-operative  society  or  an  officer  or  member  thereof  wilfully

makes  a  false  return  or  furnishes  false  information,  or  any  person

wilfully  not  furnishes  any  information  required  from  him  by  a  person

authorised in this behalf under the provisions of the State Act;

172

(b)  any  person  wilfully  or  without  any  reasonable  excuse  disobeys

any  summons,  requisition  or  lawful  written  order  issued  under  the

provisions of the State Act;

(c)  any  employer  who,  without  sufficient  cause,  fails  to  pay  to  a

co-operative society amount deducted by him from its employee within a

period of fourteen days from the date on which such deduction is made;

(d) any officer or custodian who wilfully fails to handover custody of

books,  accounts,  documents,  records,  cash,  security  and  other  property

belonging  to  a  co-operative  society  of  which  he  is  an  officer  or

custodian, to an authorised person; and

(e)  whoever,  before,  during  or  after  the  election  of  members  of  the

board or office bearers, adopts any corrupt practice.

243ZR.  Application  to  multi-State  co-operative  societies.—The


board or office bearers, adopts any corrupt practice.

243ZR.  Application  to  multi-State  co-operative  societies.—The

provisions  of  this  Part  shall  apply  to  the  multi-State  co-operative  societies

subject to the modification that any reference to “Legislature of a State”, “State

Act” or “State Government” shall be construed as a reference to “Parliament”,

“Central Act” or “the Central Government” respectively.

243ZS.  Application  to  Union  territories.—The provisions of this Part

shall  apply  to  the  Union  territories  and  shall,  in  their  application  to  a  Union

territory, having no Legislative Assembly as if the references to the Legislature

of a State were a reference to the administrator thereof appointed under article

239 and, in relation to a Union territory having a Legislative Assembly, to that

Legislative Assembly:

Provided that the President may, by notification in the Official Gazette,

direct that the provisions of this Part shall not apply to any Union territory or

part thereof as he may specify in the notification.

243ZT.  Continuance  of  existing  laws.—  Notwithstanding  anything  in

this Part, any provision of any law relating to co-operative societies in force in

a  State  immediately  before  the  commencement  of  the  Constitution  (Ninety-

seventh   Amendment)  Act,  2011,  which  is  inconsistent  with  the  provisions  of

this Part, shall continue to be in force until amended or repealed by a competent

Legislature  or  other  competent  authority  or  until  the  expiration  of  one  year

from such commencement, whichever is less.]

173

PART X


Legislature  or  other  competent  authority  or  until  the  expiration  of  one  year

from such commencement, whichever is less.]

173

PART X

THE SCHEDULED AND TRIBAL  AREAS

244. Administration of Scheduled Areas and Tribal Areas.—(1) The

provisions of the Fifth Schedule shall apply to the administration and control of

the  Scheduled  Areas  and  Scheduled  Tribes  in any  State 1***  other   than 2[the

States of Assam, 3[, 4[Meghalaya, Tripura and Mizoram]]].

(2)  The  provisions  of

the

administration  of  the  tribal  areas  in  2[the  States  of  Assam,  3[, 5[Meghalaya,

Tripura and Mizoram]]].

the  Sixth  Schedule  shall  apply

to

6[244A. Formation of an autonomous State comprising certain tribal

areas in Assam and creation of local Legislature or Council of Ministers or

both therefor.—(1) Notwithstanding anything in this Constitution, Parliament

may, by law, form within the State of Assam an autonomous State comprising

(whether wholly or in part) all or any of the tribal areas specified in 7[Part I] of

the table appended to paragraph 20 of the Sixth Schedule and create therefor—

(a)  a  body,  whether  elected  or  partly  nominated  and  partly

elected, to function as a Legislature for the autonomous State, or

(b) a Council of Ministers,

or both with such constitution, powers and functions, in each case, as may be

specified in the law.

(2) Any such law as is referred to in clause (1) may, in particular,—


specified in the law.

(2) Any such law as is referred to in clause (1) may, in particular,—

1.  The  words  and  letters  "specified  in  Part  A  or  Part  B  of  the  First  Schedule"  omitted  by  the

Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).

2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for "the State of

Assam" (w.e.f. 21-1-1972).

3. Subs. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 2, for "and Meghalaya" (w.e.f. 1-

4-1985).

4. Subs. by the State of Mizoram Act, 1986 (34 of 1986), s. 39, for  "Meghalaya and Tripura" (w.e.f.

20-2-1987).

5. Subs. by s. 39, ibid., for "Meghalaya and Tripura and the Union territory of Mizoram". (w.e.f. 20-2-

1987).

6. Ins. by the Constitution (Twenty-second Amendment) Act, 1969, s. 2 (w.e.f. 25-9-1969).

7.  Subs.  by  the  North-Eastern  Areas  (Reorganisation)  Act,  1971  (81  of  1971),  s.  71,  for  "Part  A"


(w.e.f. 21-1-1972).

174

(a)  specify  the  matters  enumerated  in  the  State  List  or  the

Concurrent List with respect to which the Legislature of the autonomous

State  shall  have  power to  make  laws  for the  whole  or any  part  thereof,

whether  to  the  exclusion  of  the  Legislature  of  the  State  of  Assam  or

otherwise;

(b) define the matters with respect to which the executive power

of the autonomous State shall extend;

(c)  provide  that  any  tax  levied  by  the  State  of  Assam  shall  be

assigned  to  the  autonomous  State  in  so  far  as  the  proceeds  thereof  are

attributable to the autonomous State;

(d)  provide  that  any  reference  to  a  State  in  any  article  of  this

Constitution  shall  be  construed  as  including  a  reference  to  the

autonomous State; and

(e)  make  such  supplemental,

provisions as may be deemed necessary.

incidental  and  consequential

(3)  An  amendment  of  any  such  law  as  aforesaid  in  so  far  as  such

amendment  relates  to  any  of  the  matters  specified  in  sub-clause  (a)  or

sub-clause (b) of clause (2) shall have no effect unless the amendment is passed

in each House of Parliament by not less than two-thirds of the members present

and voting.

(4) Any such law as is referred to in this article shall not be deemed to


in each House of Parliament by not less than two-thirds of the members present

and voting.

(4) Any such law as is referred to in this article shall not be deemed to

be  an  amendment  of  this  Constitution  for  the  purposes  of  article  368

notwithstanding that it  contains  any  provision  which  amends  or  has  the effect

of amending this Constitution.]

175

PART XI

RELATIONS BETWEEN THE UNION AND THE STATES

CHAPTER I.—LEGISLATIVE RELATIONS

Distribution of  Legislative Powers

245.  Extent  of laws  made  by Parliament  and  by the  Legislatures  of

States.—(1)  Subject  to  the  provisions  of  this  Constitution,  Parliament  may

make  laws  for  the  whole  or  any  part  of  the  territory  of  India,  and  the

Legislature of a State may make laws for the whole or any part of the State.

(2)  No  law  made  by  Parliament  shall  be  deemed  to  be  invalid  on  the

ground that it would have extra-territorial operation.

246.  Subject-matter  of  laws  made  by  Parliament  and  by  the

Legislatures  of  States.—(1) Notwithstanding anything in clauses (2) and (3),

Parliament has exclusive power to make laws with respect to any of the matters

enumerated in List I in the Seventh Schedule (in this Constitution referred to as

the “Union List”).

(2)  Notwithstanding  anything  in  clause  (3),  Parliament,  and,  subject  to


the “Union List”).

(2)  Notwithstanding  anything  in  clause  (3),  Parliament,  and,  subject  to

clause  (1),  the  Legislature  of  any  State  1***  also,  have  power  to  make  laws

with  respect  to  any  of  the  matters  enumerated  in  List  III  in  the  Seventh

Schedule (in this Constitution referred to as the “Concurrent List”).

(3) Subject to clauses (1) and (2), the Legislature of any State 1*** has

exclusive power to make laws for such State or any part thereof with respect to

any  of  the  matters  enumerated  in  List  II  in  the  Seventh  Schedule  (in  this

Constitution referred to as the “State List”).

(4)  Parliament  has  power  to  make  laws  with  respect  to  any  matter  for

any part of the territory of India not included 2[in a State] notwithstanding that

such matter is a matter enumerated in the State List.

3[246A. Special provision with respect to goods and services tax.—(1)

Notwithstanding  anything  contained  in  articles  246  and  254,  Parliament,  and,

subject  to  clause  (2),  the  Legislature  of  every  State,  have  power  to  make  laws

with respect to goods and services tax imposed by the Union or by such State.

1. The words and letters "specified in Part A or Part B of  the First Schedule"  omitted by

the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).


the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).

2.  Subs.  by  s.  29  and  Sch.,  ibid.,  for  "in  Part  A  or  Part  B  of    the  First  Schedule"

(w.e.f. 1-11-1956).

3 .  Ins.  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016,  s.  2

(w.e.f. 16-9-2016).

176

(2) Parliament has exclusive power to make laws with respect to goods

and services tax where the supply of goods, or of services, or both takes place

in the course of inter-State trade or commerce.

Explanation.—The  provisions  of  this  article,  shall,  in  respect  of  goods

and  services tax referred to in  clause (5)  of  article  279A, take  effect  from  the

date recommended by the Goods and Services Tax Council.]

247. Power of Parliament to provide for the establishment of certain

additional courts.—Notwithstanding anything in this Chapter, Parliament may

by  law  provide  for  the  establishment  of  any  additional  courts  for  the  better

administration of laws made by Parliament or of any existing laws with respect

to a matter enumerated in the Union List.

248.  Residuary  powers  of  legislation.—(1) 1[Subject  to  article  246A,

Parliament]  has  exclusive  power  to  make  any  law  with  respect  to  any  matter

not enumerated in the Concurrent List or State List.


Parliament]  has  exclusive  power  to  make  any  law  with  respect  to  any  matter

not enumerated in the Concurrent List or State List.

(2)  Such  power  shall include the power  of  making any  law  imposing  a

tax not mentioned in either of those Lists.

249. Power  of Parliament to legislate  with respect to  a  matter in the

State  List  in  the  national  interest.—(1)  Notwithstanding  anything  in  the

foregoing  provisions  of  this  Chapter,  if  the  Council  of  States  has  declared  by

resolution  supported  by  not  less  than  two-thirds  of  the  members  present  and

voting  that  it  is  necessary  or  expedient  in  the  national  interest  that  Parliament

should make laws with respect to 2[goods and services tax provided under article

246A  or]  any  matter  enumerated  in  the  State  List  specified  in  the resolution,  it

shall  be  lawful  for  Parliament  to  make  laws  for  the  whole  or  any  part  of  the

territory of India with respect to that matter while the resolution remains in force.

(2)  A  resolution  passed  under  clause  (1)  shall remain in  force  for  such

period not exceeding one year as may be specified therein:

Provided that, if and so often as a resolution approving the continuance

in force of any such resolution is passed in the manner provided in clause (1),

such resolution shall continue in force for a further period of one year from the


in force of any such resolution is passed in the manner provided in clause (1),

such resolution shall continue in force for a further period of one year from the

date on which under this clause it would otherwise have ceased to be in force.

(3)  A  law  made  by  Parliament  which  Parliament  would  not  but  for  the

passing of a resolution under clause (1) have been competent to make shall, to the

extent of the incompetency, cease to have effect on the expiration of a period of

six months after the resolution has ceased to be in force, except as respects things

done or omitted to be done before the expiration of the said period.

1.  Subs.  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016,  s.  3,  for

"Parliament" (w.e.f. 16-9-2016).

2. Ins. by s. 4, ibid. (w.e.f. 16-9-2016).

177

250. Power  of Parliament  to legislate  with respect to  any  matter in

the  State  List  if  a  Proclamation  of  Emergency  is  in  operation.—(1)

this  Chapter,  Parliament  shall,  while  a

Notwithstanding  anything

Proclamation  of  Emergency  is  in  operation,  have  power to  make laws  for the

whole or any part of the territory of  India with respect to 1[goods and services

tax provided under article 246A or] any of the matters enumerated in the State

List.

in

(2)  A  law  made  by  Parliament  which  Parliament  would  not  but  for  the


List.

in

(2)  A  law  made  by  Parliament  which  Parliament  would  not  but  for  the

issue of a Proclamation of Emergency have been competent to make shall, to the

extent of the incompetency, cease to have effect on the expiration of a period of

six months after the Proclamation has ceased to operate, except as respects things

done or omitted to be done before the expiration of the said period.

251. Inconsistency between laws made by Parliament under articles

249  and  250  and  laws  made  by  the  Legislatures  of  States.—Nothing  in

articles  249  and  250  shall  restrict  the  power  of  the  Legislature  of  a  State  to

make  any  law  which  under  this  Constitution  it  has power  to  make,  but  if  any

provision  of  a  law  made  by  the  Legislature  of  a  State  is  repugnant  to  any

provision of a law made by Parliament which Parliament has under either of the

said  articles  power  to  make,  the  law  made  by  Parliament,  whether  passed

before or after the law made by the Legislature of the State, shall prevail, and

the  law  made  by  the  Legislature  of  the  State  shall  to  the  extent  of  the

repugnancy, but so long only as the law made by Parliament continues to have

effect, be inoperative.

252.  Power  of  Parliament  to  legislate  for  two  or  more  States  by


effect, be inoperative.

252.  Power  of  Parliament  to  legislate  for  two  or  more  States  by

consent  and  adoption  of  such  legislation  by  any  other  State.—(1)  If  it

appears to the Legislatures of two or more States to be desirable that any of the

matters  with  respect  to  which  Parliament  has  no  power  to  make  laws  for  the

States except as  provided in  articles  249 and  250  should be  regulated in  such

States by Parliament by law, and if resolutions to that effect are passed by all

the Houses of the Legislatures of those States, it shall be lawful for Parliament

to  pass  an  act  for  regulating  that  matter  accordingly,  and  any  Act  so  passed

shall  apply  to  such  States  and  to  any  other  State  by  which  it  is  adopted

afterwards by resolution passed in that behalf by the House or, where there are

two Houses, by each of the Houses of the Legislature of that State.

1 .  Ins.  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016,  s.  5

(w.e.f. 16-9-2016).

178

(2) Any Act so passed by Parliament may be amended or repealed by an

Act  of  Parliament  passed  or adopted in like  manner but  shall  not,  as  respects

any  State  to  which  it  applies,  be  amended  or  repealed  by  an  Act  of  the

Legislature of that State.


any  State  to  which  it  applies,  be  amended  or  repealed  by  an  Act  of  the

Legislature of that State.

253.  Legislation  for  giving  effect  to  international  agreements.—

Notwithstanding  anything  in  the  foregoing  provisions  of  this  Chapter,

Parliament has power to make any law for the whole or any part of the territory

of  India for implementing any treaty, agreement or convention with any  other

country  or  countries  or  any  decision  made  at  any  international  conference,

association or other body.

254. Inconsistency between laws made by Parliament and laws made

by  the  Legislatures  of  States.—(1)  If  any  provision  of  a  law  made  by  the

Legislature  of  a  State  is  repugnant  to  any  provision  of  a  law  made  by

Parliament  which  Parliament is  competent to  enact,  or  to  any  provision  of  an

existing  law  with respect to  one  of  the  matters  enumerated in the  Concurrent

List, then, subject to the provisions of clause (2), the law made by Parliament,

whether passed before or after the law made by the Legislature of such State,

or, as the case may be, the existing law, shall prevail and the law made by the

Legislature of the State shall, to the extent of the repugnancy, be void.

(2) Where a law made by the Legislature of a State 1*** with respect to

one  of  the  matters  enumerated  in  the  Concurrent  List  contains  any  provision


one  of  the  matters  enumerated  in  the  Concurrent  List  contains  any  provision

repugnant to the provisions of an earlier law made by Parliament or an existing

law with respect to that matter, then, the law so made by the Legislature of such

State shall, if it has been reserved for the consideration of the President and has

received his assent, prevail in that State:

Provided  that  nothing  in  this  clause  shall  prevent  Parliament  from

enacting  at  any  time  any  law  with respect to  the  same  matter  including a  law

adding to, amending, varying or repealing the law so made by the Legislature

of the State.

255. Requirements as to recommendations and previous sanctions to

be regarded as matters of procedure only.—No Act of Parliament or of the

Legislature of a State  1***, and no provision in any such Act, shall be invalid

by reason only that some recommendation or previous sanction required by this

Constitution was not given, if assent to that Act was given—

1. The words and letters "specified in Part A or Part B of  the First Schedule"  omitted by

the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1 -11-1956).

179

(a) where the recommendation required was that of the Governor,

either by the Governor or by the President;

(b)  where

the  recommendation  required  was

Rajpramukh, either by the Rajpramukh or by the President;

that  of

the

(c) where the recommendation or previous sanction required was

that of the President, by the President.

CHAPTER II.—ADMINISTRATIVE RELATIONS

General


that  of

the

(c) where the recommendation or previous sanction required was

that of the President, by the President.

CHAPTER II.—ADMINISTRATIVE RELATIONS

General

256. Obligation of States and the Union.—The executive power of every

State  shall  be  so  exercised  as  to  ensure  compliance  with  the  laws  made  by

Parliament  and  any  existing  laws  which  apply  in  that  State,  and  the  executive

power of the Union shall extend to the giving of such directions to a State as may

appear to the Government of India to be necessary for that purpose.

257.  Control  of  the  Union  over  States  in  certain  cases.—(1)  The

executive  power  of  every  State  shall  be  so  exercised  as  not  to  impede  or

prejudice the exercise of the executive power of the Union, and the executive

power  of the  Union  shall  extend to the  giving  of  such  directions to  a  State  as

may appear to the Government of India to be necessary for that purpose.

(2) The executive power of the Union shall also extend to the giving of

directions  to  a  State  as  to  the  construction  and  maintenance  of  means  of

communication  declared  in  the  direction  to  be  of  national  or  military

importance:

Provided  that  nothing  in  this  clause  shall  be  taken  as  restricting  the

power of Parliament to declare highways or waterways to be national highways

or national waterways or the power of the Union with respect to the highways

or waterways so declared or the power of the Union to construct and maintain


or national waterways or the power of the Union with respect to the highways

or waterways so declared or the power of the Union to construct and maintain

means of communication as part of its functions with respect to naval, military

and air force works.

(3) The executive power of the Union shall also extend to the giving of

directions  to  a  State  as  to  the  measures  to  be  taken  for  the  protection  of  the

railways within the State.

(4) Where in carrying out any direction given to a State under clause (2)

as to the construction or maintenance of any means of communication or under

clause (3) as to the measures to be taken for the protection of any railway, costs

have  been incurred in excess  of those  which  would  have  been incurred  in  the

discharge of the normal duties of the State if such direction had not been given,

there shall be paid by the Government of India to the 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 the extra costs so incurred

by the State.

180

1[257A. [Assistance to States by deployment of armed forces or other

(Forty-fourth

the  Constitution

forces  of

Amendment) Act, 1978, s. 33 (w.e.f. 20-6-1979).]

the  Union.].—Omitted  by

258. Power of the Union to confer powers, etc., on States in certain

cases.—(1)  Notwithstanding  anything in this  Constitution,  the  President  may,


258. Power of the Union to confer powers, etc., on States in certain

cases.—(1)  Notwithstanding  anything in this  Constitution,  the  President  may,

with the  consent  of  the  Government  of  a  State,  entrust either  conditionally  or

unconditionally to that Government or to its officers functions in relation to any

matter to which the executive power of the Union extends.

(2)  A  law  made  by  Parliament  which  applies  in  any  State  may,

notwithstanding that it relates to a matter with respect to which the Legislature

of  the  State  has  no  power to  make  laws,  confer  powers  and  impose  duties,  or

authorise the conferring of powers and the imposition of duties, upon the State

or officers and authorities thereof.

(3) Where by virtue of this article powers and duties have been conferred

or imposed upon a State or officers or authorities thereof, there shall be paid by

the Government of India to the 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 costs of administration incurred by the

State in connection with the exercise of those powers and duties.

2[258A.  Power  of  the  States  to  entrust  functions  to  the  Union.—

Notwithstanding  anything  in  this  Constitution,  the  Governor  of  a  State  may,

with  the  consent  of  the  Government  of  India,  entrust  either  conditionally  or

unconditionally to that Government or to its officers functions in relation to any


unconditionally to that Government or to its officers functions in relation to any

matter to which the executive power of the State extends.]

[259.  Armed  Forces  in  States  in  Part  B  of  the  First  Schedule.].—

Omitted  by  the  Constitution  (Seventh  Amendment)  Act,  1956,  s.  29  and  Sch.

(w.e.f. 1-11-1956).

260.  Jurisdiction  of  the  Union  in  relation  to  territories  outside

India.—The Government of India may by agreement with the Government of

any  territory  not  being  part  of  the  territory  of  India  undertake  any  executive,

legislative or judicial functions vested in the Government of such territory, but

every such agreement shall be subject to, and governed by, any law relating to

the exercise of foreign jurisdiction for the time being in force.

1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 43 (w.e.f. 3-1-1977).

2. Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 18 (w.e.f. 1-11-1956).

181

261. Public acts, records and judicial proceedings.—(1) Full faith and

credit shall be given throughout the territory of India to public acts, records and

judicial proceedings of the Union and of every State.

(2)  The  manner  in  which  and  the  conditions  under  which  the  acts,

records and proceedings referred to in clause (1) shall be proved and the effect

thereof determined shall be as provided by law made by Parliament.


records and proceedings referred to in clause (1) shall be proved and the effect

thereof determined shall be as provided by law made by Parliament.

(3) Final judgments or orders delivered or passed by civil courts in any

part of the territory of India shall be capable of execution anywhere within that

territory according to law.

Disputes relating to Waters

262. Adjudication of disputes relating to waters of inter-State rivers

or  river  valleys.—(1)  Parliament  may  by  law  provide  for  the adjudication  of

any dispute or complaint with respect to the use, distribution or control of the

waters of, or in, any inter-State river or river valley.

(2)  Notwithstanding  anything  in  this  Constitution,  Parliament  may  by

law  provide  that neither the  Supreme  Court nor  any  other  court  shall  exercise

jurisdiction  in  respect  of  any  such  dispute  or  complaint  as  is  referred  to  in

clause (1).

Co-ordination between States

263. Provisions with respect to an inter-State Council.—If at any time

it  appears  to  the  President  that  the  public  interests  would  be  served  by  the

establishment of a Council charged with the duty of—

(a)  inquiring  into  and  advising  upon  disputes  which  may  have

arisen between States;

(b) investigating and  discussing  subjects  in  which  some  or  all  of

the States, or the Union and one or more of  the States, have a common

interest; or

(c)  making  recommendations  upon  any  such  subject  and,  in


interest; or

(c)  making  recommendations  upon  any  such  subject  and,  in

particular,  recommendations  for  the  better  co-ordination  of  policy  and

action with respect to that subject,

it shall be lawful for the President by order to establish such a Council, and to

define  the  nature  of  the  duties to  be  performed  by  it and  its  organisation  and

procedure.

182

PART XII

FINANCE, PROPERTY, CONTRACTS AND SUITS

CHAPTER I.—FINANCE

General

1[264.  Interpretation.—In  this  Part,  “Finance  Commission”  means  a

Finance Commission constituted under article 280.]

265. Taxes not to be imposed save by authority of law.—No tax shall

be levied or collected except by authority of law.

266.  Consolidated  Funds  and  public  accounts  of  India  and  of  the

States.—(1)  Subject  to  the  provisions  of  article  267  and  to  the  provisions  of

this  Chapter  with  respect  to  the  assignment  of  the  whole  or  part  of  the  net

proceeds  of  certain  taxes  and  duties  to  States,  all  revenues  received  by  the

Government  of  India,  all  loans  raised  by  that  Government  by  the  issue  of

treasury  bills, loans  or  ways  and  means  advances and all  moneys  received  by

that Government in repayment of loans shall form one consolidated fund to be

entitled    “the  Consolidated  Fund  of  India”,  and  all  revenues  received  by  the


entitled    “the  Consolidated  Fund  of  India”,  and  all  revenues  received  by  the

Government  of  a  State,  all  loans  raised  by  that  Government  by  the  issue  of

treasury  bills, loans  or  ways  and  means  advances and all  moneys  received  by

that Government in repayment of loans shall form one consolidated fund to be

entitled “the Consolidated Fund of the State”.

(2) All other public moneys received by or on behalf of the Government

of India or the Government of a State shall be credited to the public account of

India or the public account of the State, as the case may be.

(3)  No  moneys  out  of  the  Consolidated  Fund  of  India  or  the

Consolidated  Fund  of  a  State  shall  be appropriated  except  in  accordance  with

law and for the purposes and in the manner provided in this Constitution.

267.  Contingency  Fund.—(1)  Parliament  may  by  law  establish  a

Contingency Fund in the nature of an imprest to be entitled “the Contingency

Fund of India”  into which shall be paid from time to time such sums as may be

determined by such law, and the said Fund shall be placed at the disposal of the

President  to  enable  advances  to  be  made  by  him  out  of  such  Fund  for  the

purposes  of  meeting  unforeseen  expenditure  pending  authorisation  of  such

expenditure by Parliament by law under article 115 or article 116.


purposes  of  meeting  unforeseen  expenditure  pending  authorisation  of  such

expenditure by Parliament by law under article 115 or article 116.

1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for art. 264

(w.e.f. 1-11-1956).

183

(2) The Legislature of a State may by law establish a Contingency Fund in

the nature of an imprest to be entitled “the Contingency Fund of the State” into

which shall be paid from time to time such sums as may be determined by such

law, and the said Fund shall be placed at the disposal of the Governor 1*** of the

State to enable advances to be made by him out of such Fund for the purposes of

meeting unforeseen expenditure pending authorisation of such expenditure by the

Legislature of the State by law under article 205 or article 206.

Distribution of Revenues between the Union and the States

268.  Duties  levied  by  the  Union  but  collected  and  appropriated  by

the States.—(1) Such stamp duties 2*** as are mentioned in the Union List shall

be levied by the Government of India but shall be collected—

(a) in the case where such duties are leviable within any 3[Union

territory], by the Government of India, and

(b)  in  other  cases,  by  the  States  within  which  such  duties  are

respectively leviable.

(2) The proceeds in any financial year of any such duty leviable within

any  State  shall  not  form  part  of  the  Consolidated  Fund  of  India,  but  shall  be

assigned to that State.


any  State  shall  not  form  part  of  the  Consolidated  Fund  of  India,  but  shall  be

assigned to that State.

4268A. [Service tax levied by Union and collected and appropriated by

the  Union  and  the  States.].—Omitted  by  the  Constitution  (One  Hundred  and

First Amendment) Act, 2016, s. 7 (w.e.f. 16-9-2016).

1.  The  words  "or  Rajpramukh"  omitted  by  the  Constitution  (Seventh  Amendment)  Act,

1956, s. 29 and Sch. (w.e.f. 1-11-1956).

2.  The  words  "and  such  duties  of  excise  on  medicinal  and  toilet  preparations"

omitted  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016,  s.  6,

(w.e.f. 16-9-2016).

3. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for "State

Specified in Part C of the First Schedule" (w.e.f. 1-11-1956).

4. Ins. by the  Constitution (Eighty-eighth Amendment) Act, 2003, s. 2 (not enforced).

184

269.  Taxes  levied  and  collected  by  the  Union  but  assigned  to  the

States.— 1 [(1)  Taxes  on  the  sale  or  purchase  of  goods  and  taxes  on  the


States.— 1 [(1)  Taxes  on  the  sale  or  purchase  of  goods  and  taxes  on  the

consignment of goods 2[except as provided in article 269A] shall be levied and

collected by the Government of India but shall be assigned and shall be deemed

to have been assigned to the States on or after the 1st day of April, 1996 in the

manner provided in clause (2).

Explanation.—For the purposes of this clause,—

(a) the  expression  "taxes  on the  sale  or  purchase  of  goods"  shall

mean  taxes  on sale  or  purchase  of  goods  other  than  newspapers, where

such  sale  or  purchase  takes  place  in  the  course  of  inter-State  trade  or

commerce;

(b) the expression "taxes on the consignment of goods" shall mean

taxes  on  the  consignment  of  goods  (whether  the  consignment  is  to  the

person making it or to any other person), where such consignment takes

place in the course of inter-State trade or commerce.

(2) The net proceeds in any financial year of any such tax, except in so

far as those proceeds represent proceeds attributable to Union territories, shall

not  form  part  of  the  Consolidated  Fund  of  India, but  shall  be  assigned to  the

States  within  which  that  tax  is  leviable  in  that  year,  and  shall  be  distributed

among those States in accordance with such principles of distribution as may be

formulated by Parliament by law.]

3[(3) Parliament may by law formulate principles for determining when a


among those States in accordance with such principles of distribution as may be

formulated by Parliament by law.]

3[(3) Parliament may by law formulate principles for determining when a

4[sale  or  purchase  of,  or  consignment  of  goods]  takes  place  in  the  course  of

inter-State trade or commerce.]

5[269A.  Levy  and  collection  of  goods  and  services  tax  in  course  of

inter-State  trade  or  commerce.— (1)  Goods  and  services tax  on  supplies in

the course of inter-State trade or commerce shall be levied and collected by the

Government of India and such tax shall be apportioned between the Union and

the  States  in  the  manner  as  may  be  provided  by  Parliament  by  law  on  the

recommendations of the Goods and Services Tax Council.

1. Subs. by the Constitution (Eightieth  Amendment)  Act, 2000. s. 2,  for  cls.  (1) and  (2)

(w.e.f. 9-6-2000).

2 .  Ins.  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016  s.  8,

(w.e.f. 16-9-2016).

3. Ins. by the Constitution (Sixth Amendment) Act, 1956, s. 3 (w.e.f. 11-9-1956).

4 .  Subs.  by  the  Constitution  (Forty-sixth  Amendment)  Act,  1982.  s.  2,  for  "sale  or


purchase of goods"  (w.e.f. 2-2-1983).

5 .  Ins.  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016,  s.  9

(w.e.f. 16-9-2016).

185

Explanation.—For  the  purposes  of  this  clause,  supply  of  goods,  or  of

services,  or  both  in  the  course  of  import  into  the  territory  of  India  shall  be

deemed  to  be  supply  of  goods,  or  of  services,  or  both  in  the  course  of  inter-

State trade or commerce.

(2)  The  amount  apportioned  to  a  State  under  clause  (1)  shall  not  form

part of the Consolidated Fund of India.

(3)  Where  an  amount  collected as  tax levied under  clause (1) has  been

used for payment of the tax levied by a State under article 246A, such amount

shall not form part of the Consolidated Fund of India.

(4)  Where  an  amount  collected  as  tax  levied  by  a  State  under  article

246A  has  been  used  for  payment  of  the  tax  levied  under  clause  (1),  such

amount shall not form part of the Consolidated Fund of the State.

(5) Parliament may, by law, formulate the principles for determining the

place of supply, and when a supply of goods, or of services, or both takes place

in the course of inter-State trade or commerce.]


place of supply, and when a supply of goods, or of services, or both takes place

in the course of inter-State trade or commerce.]

1 [270.  Taxes  levied  and  distributed  between  the  Union  and  the

States.—(1) All taxes and duties referred to in the Union List, except the duties

and  taxes referred  to in 2[articles  268,  269  and 269A], respectively, surcharge

on  taxes  and  duties  referred  to  in  article 271 and  any  cess  levied  for  specific

purposes  under  any  law  made  by  Parliament  shall  be  levied  and  collected  by

the  Government  of  India  and  shall  be  distributed  between  the  Union  and  the

States in the manner provided in clause (2).

3[(1A)  The tax  collected  by  the  Union  under  clause  (1)  of  article  246A

shall  also  be  distributed  between  the  Union  and  the  States  in  the  manner

provided in clause (2).

(1B)  The  tax  levied  and  collected  by  the  Union  under  clause  (2)  of

article  246A  and  article  269A,  which  has  been  used  for  payment  of  the  tax

levied  by  the  Union  under  clause  (1)  of  article  246A,  and  the  amount

apportioned  to  the  Union  under  clause  (1)  of  article  269A,  shall  also  be


apportioned  to  the  Union  under  clause  (1)  of  article  269A,  shall  also  be

distributed between the Union and the States in the manner provided in clause

(2).]

1 .  Subs.  by  the  Constitution  (Eightieth  Amendment)  Act,  2000,  s.  3,  for  art.  270

(w.e.f. 1-4-1996).

2. Subs. by the Constitution (Eighty-eighth Amendment) Act, 2003, s. 3, for “articles 268

and 269” (not enforced) and further subs. by the Constitution (One Hundred and First

Amendment) Act, 2016, s. 10, for arts. 268, 268A and 269 (w.e.f. 16 -9-2016).

3. Ins. by s. 10, ibid. (w.e.f. 16-9-2016).

186

(2)  Such  percentage,  as  may  be  prescribed,  of  the  net  proceeds  of  any

such tax  or  duty  in  any  financial  year  shall  not  form  part  of the Consolidated

Fund of India, but shall be assigned to the States within which that tax or duty

is  leviable  in  that  year,  and  shall  be  distributed  among  those  States  in  such

manner  and  from  such  time  as  may  be  prescribed  in  the  manner  provided  in

clause (3).

(3) In this article, "prescribed" means, —

(i) until a Finance Commission has been constituted, prescribed by


clause (3).

(3) In this article, "prescribed" means, —

(i) until a Finance Commission has been constituted, prescribed by

the President by order, and

(ii) after a Finance Commission has been constituted, prescribed by

the  President  by  order  after  considering  the  recommendations  of  the

Finance Commission.]

271.  Surcharge  on  certain  duties  and  taxes  for  purposes  of  the

Union.—Notwithstanding anything in articles 269 and 270, Parliament may at

any time increase any of the duties or taxes referred to in those articles 1[except

the goods and services tax under article 246A,] by a surcharge for purposes of

the Union and the whole proceeds of any such surcharge shall form part of the

Consolidated Fund of India.

[272.  Taxes  which  are  levied  and  collected  by  the  Union  and  may  be

distributed  between  the  Union  and  the  States.].—Omitted  by  the  Constitution

(Eightieth Amendment) Act, 2000, s. 4. (w.e.f. 9-6-2000).

273.  Grants  in  lieu  of  export  duty  on  jute  and  jute  products.—(1)

There  shall  be  charged  on  the  Consolidated  Fund  of  India  in  each  year  as

grants-in-aid of the revenues of the States of Assam, Bihar, 2[Odisha] and West

Bengal, in lieu of assignment of any share of the net proceeds in each year of


Bengal, in lieu of assignment of any share of the net proceeds in each year of

export  duty  on  jute  and  jute  products  to  those  States,  such  sums  as  may  be

prescribed.

(2)  The  sums  so  prescribed  shall  continue  to  be  charged  on  the

Consolidated Fund of India so long as any export duty on jute or jute products

continues to be levied by the Government of India or until the expiration of ten

years from the commencement of this Constitution whichever is earlier.

1 .  Ins.  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016,  s.  11

(w.e.f. 16-9-2016).

2.  Subs.  by the Orissa (Alteration   of Name)  Act, 2011 (15 of 2011), s. 5,  for "Orissa"

(w.e.f. 1-11-2011).

187

(3) In this article, the expression “prescribed” has the same meaning as

in article 270.

274.  Prior  recommendation  of  President  required  to  Bills  affecting

taxation  in  which  States  are  interested.—(1)  No  Bill  or  amendment  which

imposes or varies any tax or duty in which States are interested, or which varies

the meaning of the expression “agricultural income” as defined for the purposes

of the enactments relating to Indian income-tax, or which affects the principles

on which under any of the foregoing provisions of this Chapter moneys are or


of the enactments relating to Indian income-tax, or which affects the principles

on which under any of the foregoing provisions of this Chapter moneys are or

may  be  distributable  to  States,  or  which  imposes  any  such  surcharge  for  the

purposes  of  the  Union  as  is  mentioned  in  the  foregoing  provisions  of  this

Chapter, shall be introduced or moved in either House of Parliament except on

the recommendation of the President.

(2)  In  this  article,  the  expression  “tax  or  duty  in  which  States  are

interested” means—

(a) a tax or duty the whole or part of the net proceeds whereof are

assigned to any State; or

(b)  a  tax  or  duty  by  reference  to  the  net  proceeds  whereof  sums

are for the time being payable out of the Consolidated Fund of India to

any State.

275.  Grants  from  the  Union  to  certain  States.—(1)  Such  sums  as

Parliament may by law provide shall be charged on the Consolidated Fund of

India in each year as grants-in-aid of the revenues of such States as Parliament

may determine to be in need of assistance, and different sums may be fixed for

different States:

Provided that there shall be paid out of the Consolidated Fund of India as

grants-in-aid of the revenues of a State such capital and recurring sums as may

be  necessary  to  enable  that  State  to  meet  the  costs  of  such  schemes  of

development  as  may  be  undertaken  by  the  State  with  the  approval  of  the


development  as  may  be  undertaken  by  the  State  with  the  approval  of  the

Government of India for the purpose of promoting the welfare of the Scheduled

Tribes in that State or raising the level of administration of the Scheduled Areas

therein to that of the administration of the rest of the areas of that State:

Provided further that there shall be paid out of the Consolidated Fund of

India as grants-in-aid of the revenues of the State of Assam sums, capital and

recurring, equivalent to—

188

(a) the average excess of expenditure over the revenues during the

two years immediately preceding the commencement of this Constitution

in respect of the administration of the tribal areas specified in 1[Part I] of

the table appended to paragraph 20 of the Sixth Schedule; and

(b)  the  costs  of  such  schemes  of  development  as  may  be

undertaken  by  that  State  with  the approval  of  the  Government  of  India

for the purpose of raising the level of administration of the said areas to

that of the administration of the rest of the areas of that State.

2[(1A) On and from the formation of the autonomous State under article

244A,—

(i)  any  sums  payable  under  clause  (a)  of  the  second  proviso  to

clause  (1)  shall,  if  the  autonomous  State  comprises  all  the  tribal  areas

referred  to  therein,  be  paid  to  the  autonomous  State,  and,  if  the

autonomous  State  comprises  only  some  of  those  tribal  areas,  be

apportioned between the State of Assam and the autonomous State as the


autonomous  State  comprises  only  some  of  those  tribal  areas,  be

apportioned between the State of Assam and the autonomous State as the

President may, by order, specify;

(ii)  there  shall  be  paid  out  of  the  Consolidated  Fund  of  India  as

grants-in-aid of the revenues of the autonomous State sums, capital and

recurring,  equivalent  to  the  costs  of  such  schemes  of  development  as

may  be  undertaken  by  the  autonomous  State  with  the  approval  of  the

Government  of  India  for

level  of

administration of that State to that of the administration of the rest of the

State of Assam.]

(2)  Until  provision  is  made  by  Parliament under  clause  (1),  the powers

conferred on Parliament under that clause shall be exercisable by the President

by order and any order made by the President under this clause shall have effect

subject to any provision so made by Parliament:

the  purpose  of  raising

the

Provided that after a Finance Commission has been constituted no order

shall  be  made  under  this  clause  by  the  President  except  after  considering  the

recommendations of the Finance Commission.

276.  Taxes  on  professions,  trades,  callings  and  employments.—(1)

Notwithstanding anything in article 246, no law of the Legislature of a State relating

to taxes for the benefit of the State or of a municipality, district board, local board or

other  local  authority  therein  in  respect  of  professions,  trades,  callings  or


other  local  authority  therein  in  respect  of  professions,  trades,  callings  or

employments shall be invalid on the ground that it relates to a tax on income.

1.  Subs.  by  the  North-Eastern  Areas  (Reorganisation)  Act,  1971  (81  of  1971)  s.  71,

for "Part A" (w.e.f. 21-1-1972).

2. Ins. by the Constitution (Twenty-second Amendment) Act, 1969, s. 3 (w.e.f. 25-9-1969).

189

(2) The total amount payable in respect of any one person to the State or

to  any  one  municipality,  district  board, local  board  or  other local authority  in

the  State  by  way  of  taxes  on  professions,  trades,  callings  and  employments

shall not exceed 1[two thousand and five hundred rupees] per annum.

2*

(3)  The  power  of  the  Legislature  of  a  State  to  make  laws  as  aforesaid

with respect to taxes on professions, trades, callings and employments shall not

be construed as limiting in any way the power of Parliament to make laws with

respect to taxes on income accruing from or arising out of professions, trades,

callings and employments.

277.  Savings.—Any  taxes,  duties,  cesses  or  fees  which,  immediately

before the  commencement  of  this  Constitution,  were  being lawfully  levied  by

the Government of any State or by any municipality or other local authority or


before the  commencement  of  this  Constitution,  were  being lawfully  levied  by

the Government of any State or by any municipality or other local authority or

body  for  the  purposes  of  the  State,  municipality,  district  or  other  local  area

may,  notwithstanding that  those taxes,  duties,  cesses  or  fees  are mentioned  in

the  Union  List,  continue  to  be levied  and to  be  applied  to  the same  purposes

until provision to the contrary is made by Parliament by law.

278. [Agreement with States in Part B of the First Schedule with regard

the  Constitution  (Seventh

to  certain

Amendment) Act, 1956, s. 29 and Sch.(w.e.f. 1-11-1956).

financial  matters.].—Omitted  by

279.  Calculation  of  “net  proceeds”,  etc.—(1)  In  the  foregoing

provisions of this Chapter, “net proceeds” means in relation to any tax or duty

the proceeds thereof reduced by the cost of collection, and for the purposes of

those provisions the net proceeds of any tax or duty, or of any part of any tax or

duty,  in  or  attributable  to  any  area  shall  be  ascertained  and  certified  by  the

Comptroller and Auditor-General of India, whose certificate shall be final.

(2)  Subject  as  aforesaid,  and  to  any  other  express  provision  of  this

Chapter,  a  law  made  by  Parliament  or  an  order  of  the  President  may,  in  any


Chapter,  a  law  made  by  Parliament  or  an  order  of  the  President  may,  in  any

case  where  under  this  Part  the  proceeds  of  any  duty  or  tax  are,  or  may  be,

assigned to any State, provide for the manner in which the proceeds are to be

calculated,  for  the  time  from  or  at  which  and  the  manner  in  which  any

payments are to be made, for the making of adjustments between one financial

year and another, and for any other incidental or ancillary matters.

1. Subs. by the Constitution (Sixtieth Amendment) Act, 1988, s. 2, for "two hundred and

fifty rupees" (w.e.f. 20-12-1988).

2. Proviso omitted by s.2,  ibid. (w.e.f. 20-12-1988).

190

1[279A.  Goods  and  Services  Tax  Council.—(1)  The  President  shall,

within  sixty  days  from  the  date  of  commencement  of  the  Constitution  (One

Hundred and First Amendment) Act, 2016, by order, constitute a Council to be

called the Goods and Services Tax Council.

(2)  The  Goods  and  Services  Tax  Council shall  consist  of  the  following

members, namely:—

(a) the Union Finance Minister — Chairperson;

(b)  the  Union  Minister  of  State  in  charge  of  Revenue  or

Finance — Member;

(c)  the  Minister  in  charge  of  Finance  or  Taxation  or  any  other


Finance — Member;

(c)  the  Minister  in  charge  of  Finance  or  Taxation  or  any  other

Minister nominated by each State Government — Members.

(3) The Members of the Goods and Services Tax Council referred to in

sub-clause  (c)  of  clause  (2)  shall,  as  soon  as  may  be,  choose  one  amongst

themselves to  be  the  Vice-Chairperson  of the  Council  for  such  period  as they

may decide.

(4) The Goods and Services Tax Council shall make recommendations to

the Union and the States on—

(a)  the  taxes,  cesses  and  surcharges  levied  by  the  Union,  the

States  and  the  local  bodies  which  may  be  subsumed  in  the  goods  and

services tax;

(b) the goods and services that may be subjected to, or exempted

from, the goods and services tax;

(c)  model  Goods  and  Services  Tax  Laws,  principles  of  levy,

apportionment  of  Goods  and  Services  Tax  levied  on  supplies  in  the

course  of  inter-State  trade  or  commerce  under  article  269A  and  the

principles that govern the place of supply;

(d) the threshold limit of turnover below which goods and services

may be exempted from goods and services tax;

(e) the rates including floor rates with bands of goods and services

tax ;

(f)  any  special  rate  or  rates  for  a  specified  period,  to  raise

additional resources during any natural calamity or disaster;


tax ;

(f)  any  special  rate  or  rates  for  a  specified  period,  to  raise

additional resources during any natural calamity or disaster;

1 .  Ins.  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016,  s.  12

(w.e.f. 12-9-2016).

191

(g)  special  provision  with  respect  to  the  States  of  Arunachal

Pradesh,  Assam,  Jammu  and  Kashmir,  Manipur,  Meghalaya,  Mizoram,

Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and

(h) any other matter relating to the goods and services tax, as the

Council may decide.

(5)  The  Goods  and  Services  Tax  Council  shall recommend  the  date  on

which  the  goods  and  services  tax  be  levied  on  petroleum  crude,  high  speed

diesel,  motor  spirit  (commonly  known  as  petrol),  natural  gas  and  aviation

turbine fuel.

(6) While discharging the functions conferred by this article, the Goods

and  Services  Tax  Council  shall  be  guided  by  the  need  for  a  harmonised

structure  of  goods  and  services  tax  and  for  the  development  of  a  harmonised

national market for goods and services.

(7) One-half of the total number of Members of the Goods and Services

Tax Council shall constitute the quorum at its meetings.

(8) The Goods and Services Tax Council shall determine the procedure


Tax Council shall constitute the quorum at its meetings.

(8) The Goods and Services Tax Council shall determine the procedure

in the performance of its functions.

(9) Every decision of the Goods and Services Tax Council shall be taken

at a meeting, by a majority of not less than three-fourths of the weighted votes

of the members present and voting, in accordance with the following principles,

namely:—

(a) the vote of the Central Government shall have a weightage of

one-third of the total votes cast, and

(b)  the  votes  of  all  the  State  Governments  taken  together  shall

have a weightage of two-thirds of the total votes cast,

in that meeting.

(10) No act or proceedings of the Goods and Services Tax Council shall

be invalid merely by reason of—

(a)  any  vacancy  in,  or  any  defect  in,  the  constitution  of  the

Council; or

(b) any defect in the appointment of a person as a Member of the

Council; or

(c)  any  procedural  irregularity  of  the  Council  not  affecting  the

merits of the case.

(11) The Goods and Services Tax Council shall establish a mechanism to

adjudicate any dispute—

192

(a) between the Government of India and one or more States; or

(b)  between the  Government  of  India  and any  State  or  States  on

one side and one or more other States on the other side; or

(c) between two or more States,

arising out of the recommendations of the Council or implementation thereof.]

280.  Finance  Commission.—(1)  The  President  shall,  within two  years

from the commencement of this Constitution and thereafter at the expiration of


280.  Finance  Commission.—(1)  The  President  shall,  within two  years

from the commencement of this Constitution and thereafter at the expiration of

every fifth year or at such earlier time as the President considers necessary, by

order constitute a Finance Commission which shall consist of a Chairman and

four other members to be appointed by the President.

(2)  Parliament  may  by  law  determine  the  qualifications  which  shall  be

requisite  for  appointment  as  members  of  the  Commission  and  the  manner  in

which they shall be selected.

(3) It shall be the duty of the Commission to make recommendations to

the President as to—

(a)  the  distribution  between  the  Union  and  the  States  of  the  net

proceeds  of  taxes  which  are  to  be,  or  may  be,  divided  between  them

under this Chapter and the allocation between the States of the respective

shares of such proceeds;

(b)  the  principles  which  should  govern  the  grants-in-aid  of  the

revenues of the States out of the Consolidated Fund of India;

1[(bb)  the  measures  needed  to  augment  the  Consolidated  Fund  of  a

State to supplement the resources of the Panchayats in the State on the basis

of the recommendations made by the Finance Commission of the State;]

2[(c) the measures needed to augment the Consolidated Fund of a

State  to  supplement  the  resources  of  the  Municipalities  in  the  State  on

the  basis  of  the recommendations  made  by  the  Finance  Commission  of

the State;]


the  basis  of  the recommendations  made  by  the  Finance  Commission  of

the State;]

3 [(d)]  any  other  matter  referred  to  the  Commission  by  the

President in the interests of sound finance.

(4) The Commission shall determine their procedure and shall have such

powers in the performance of their functions as  Parliament may by law confer

on them.

1. Ins. by the Constitution (Seventy-third Amendment) Act, 1992, s. 3 (w.e.f. 24-4-1993).

2. Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, s. 3 (w.e.f. 1-6-1993).

3. Sub-clause (c) re-lettered as sub-clause (d) by s. 3, ibid. (w.e.f. 1-6-1993).

193

281.  Recommendations  of  the  Finance  Commission.—The  President

shall cause every recommendation made by the Finance Commission under the

provisions of this Constitution together with an explanatory memorandum as to

the action taken thereon to be laid before each House of Parliament.

Miscellaneous Financial Provisions

282.  Expenditure  defrayable  by  the  Union  or  a  State  out  of  its

revenues.—The Union or a State may make any grants for any public purpose,

notwithstanding that the purpose is not one with respect to which Parliament or

the Legislature of the State, as the case may be, may make laws.

283.  Custody,  etc.,  of  Consolidated  Funds,  Contingency  Funds  and


283.  Custody,  etc.,  of  Consolidated  Funds,  Contingency  Funds  and

moneys  credited  to  the  public  accounts.—(1)  The  custody  of

the

Consolidated Fund of India and the Contingency Fund of India, the payment of

moneys  into such  Funds,  the  withdrawal  of  moneys  therefrom,  the  custody  of

public moneys other than those credited to such Funds received by or on behalf

of the Government of India, their payment into the public account of India and

the  withdrawal  of  moneys  from  such  account  and all  other  matters  connected

with  or  ancillary  to  matters  aforesaid  shall  be  regulated  by  law  made  by

Parliament, and, until provision in that behalf is so made, shall be regulated by

rules made by the President.

(2)  The  custody  of  the  Consolidated  Fund  of  a  State  and  the

Contingency  Fund  of  a  State,  the  payment  of  moneys  into  such  Funds,  the

withdrawal  of  moneys  therefrom,  the  custody  of  public  moneys  other  than

those credited to such Funds received by or on behalf of the Government of the

State, their payment into the public account of the State and the withdrawal of

moneys from such account and all other matters connected with or ancillary to

matters  aforesaid  shall  be  regulated  by  law  made  by  the  Legislature  of  the

State, and, until provision in that behalf is so made, shall be regulated by rules


State, and, until provision in that behalf is so made, shall be regulated by rules

made by the Governor 1***  of the State.

284.  Custody  of  suitors'  deposits  and  other  moneys  received  by

public servants and courts.—All moneys received by or deposited with—

(a)  any  officer  employed  in  connection  with  the  affairs  of  the

Union  or  of  a  State  in  his  capacity  as  such,  other  than  revenues  or

public  moneys  raised  or  received  by  the  Government  of  India  or  the

Government of the State, as the case may be, or

(b)  any  court  within  the  territory  of  India  to  the  credit  of  any

cause, matter, account or persons,

1 .  The  words  "or  Rajpramukh"  omitted  by  the  Constitution  (Seventh  Amendment)

Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).

194

shall be paid into the public account of India or the public account of State, as

the case may be.

285.  Exemption  of  property  of  the  Union  from  State  taxation.—(1)

The  property  of  the  Union  shall,  save  in  so  far  as  Parliament  may  by  law

otherwise  provide,  be  exempt  from  all  taxes  imposed  by  a  State  or  by  any

authority within a State.


otherwise  provide,  be  exempt  from  all  taxes  imposed  by  a  State  or  by  any

authority within a State.

(2)  Nothing  in  clause  (1)  shall,  until  Parliament  by  law  otherwise

provides,  prevent  any  authority  within  a  State  from  levying  any  tax  on  any

property  of  the  Union  to  which  such  property  was  immediately  before  the

commencement  of  this  Constitution liable  or treated  as  liable,  so long  as  that

tax continues to be levied in that State.

286.  Restrictions  as to  imposition  of  tax  on  the sale  or  purchase  of

goods.—(1)  No law of a State shall impose, or authorise the imposition of, a

tax  on 1[the  supply  of  goods  or  of  services  or  both,  where  such  supply  takes

place]—

(a) outside the State; or

(b) in the course of the import of the 2[goods or services or both]

into, or export of the 2[goods or services or both] out of, the territory of

India.

3[*                                       *

*]

4[(2) Parliament may by law formulate principles for determining when a

5[supply  of  goods  or  of  services  or  both]  in  any  of  the  ways  mentioned  in

clause (1).

6[(3) *

287.  Exemption  from  taxes  on  electricity.—Save  in  so  far  as


clause (1).

6[(3) *

287.  Exemption  from  taxes  on  electricity.—Save  in  so  far  as

Parliament  may  by  law  otherwise provide,  no  law  of  a  State shall impose,  or

authorise  the  imposition  of,  a  tax  on  the  consumption  or  sale  of  electricity

(whether produced by a Government or other persons) which is—

*]

1.  Subs.  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016,  s.  13,

for  "the  sale  or  purchase  of  goods  where  such  sale  or  purchase  takes  place"

(w.e.f. 16-9-2016).

2. Subs. by  s. 13 (i)(B), ibid., for "goods" (w.e.f. 16-9-2016).

3. Explanation to cl. (1) omitted by the Constitution (Sixth Amendment) Act, 1956,  s. 4

(w.e.f. 11-9-1956).

4. Subs. by s.4, ibid., for cls. (2) and (3) (w.e.f. 11-9-1956).

5.  Subs.  by  the  Constitution  (One  Hundred  and  First  Amendment)  Act,  2016,  s.  13(ii),

for "sale or purchase of goods takes place" (w.e.f. 16-9-2016).


for "sale or purchase of goods takes place" (w.e.f. 16-9-2016).

6. Cl. (3) omitted by s. 13 (iii), ibid. (w.e.f. 16-9-2016).

195

(a)  consumed  by  the  Government  of  India,  or  sold  to  the

Government of India for consumption by that Government; or

(b) consumed in the construction, maintenance or operation of any

railway by the Government of India or a railway company operating that

railway,  or  sold  to  that  Government  or  any  such  railway  company  for

consumption  in  the  construction,  maintenance  or  operation  of  any

railway,

and any such law imposing, or authorising the imposition of, a tax on the sale

of electricity shall secure that the price of electricity sold to the Government of

India for consumption by that Government, or to any such railway company as

aforesaid for consumption in the construction, maintenance or operation of any

railway, shall be less by the amount of the tax than the price charged to other

consumers of a substantial quantity of  electricity.

288.  Exemption  from  taxation  by  States  in  respect  of  water  or

electricity in certain cases.—(1) Save in so far as the President may by order

otherwise  provide,  no  law  of  a  State  in  force  immediately  before  the

commencement  of  this  Constitution  shall  impose,  or  authorise  the  imposition

of,  a  tax  in  respect  of  any  water  or  electricity  stored,  generated,  consumed,


of,  a  tax  in  respect  of  any  water  or  electricity  stored,  generated,  consumed,

distributed or sold by any authority established by any existing law or any law

made  by  Parliament  for  regulating  or  developing  any  inter-State  river  or

river-valley.

Explanation.—The  expression  “law  of  a  State  in  force”  in  this  clause

shall include a law of a State passed or made before the commencement of  this

Constitution  and not  previously  repealed,  notwithstanding that it  or  parts  of  it

may not be then in operation either at all or in particular areas.

(2)  The  Legislature  of  a  State  may  by  law  impose,  or  authorise  the

imposition of, any such tax as is mentioned in clause (1), but no such law shall

have any effect unless it has, after having been reserved for the consideration of

the President, received his assent; and if any such law provides for the fixation

of  the rates and  other  incidents  of  such tax  by  means  of  rules  or orders to  be

made  under  the  law  by  any  authority,  the  law  shall  provide  for  the  previous

consent of the President being obtained to the making of any such rule or order.

289.  Exemption  of  property  and  income  of  a  State  from  Union

taxation.—(1)  The property and income of a State shall be exempt from Union

taxation.

196

(2)  Nothing  in  clause  (1)  shall  prevent  the  Union  from  imposing,  or


taxation.

196

(2)  Nothing  in  clause  (1)  shall  prevent  the  Union  from  imposing,  or

authorising the imposition of, any tax to such extent, if any, as Parliament may

by law provide in respect of a trade or business of any kind carried on by, or on

behalf of, the Government of a State, or any operations connected therewith, or

any property used or occupied for the purposes of such trade or business, or any

income accruing or arising in connection therewith.

(3) Nothing in clause (2) shall apply to any trade or business, or to any

class of trade or business, which Parliament may by law declare to be incidental

to the ordinary functions of Government.

290.  Adjustment  in  respect  of  certain  expenses  and  pensions.—

Where  under  the  provisions  of  this  Constitution  the  expenses  of  any  court  or

Commission, or the pension payable to or in respect of a person who has served

before  the  commencement  of  this  Constitution  under  the  Crown  in  India  or

after  such  commencement in  connection  with the  affairs  of  the  Union  or  of  a

State, are charged on the Consolidated Fund of India or the Consolidated Fund

of a State, then, if—

(a) in the case of a charge on the Consolidated Fund of India, the

court or Commission serves any of the separate needs of a State, or the

person  has served  wholly  or  in  part  in  connection  with the affairs  of  a

State; or

(b) in the case of a charge on the Consolidated Fund of a State, the


State; or

(b) in the case of a charge on the Consolidated Fund of a State, the

court or  Commission serves any of the separate needs of the Union or

another State, or the person has served wholly or  in part in connection

with the affairs of the Union or another State,

there shall be charged on and paid  out of the Consolidated Fund of the State or,

as the case may be, the Consolidated Fund of India or the Consolidated Fund of

the other State, such contribution in respect of the expenses or pension as may

be agreed, or as may in default of agreement be determined by an arbitrator to

be appointed by the Chief Justice of India.

1[290A.  Annual  payment  to  certain  Devaswom  Funds.—A  sum  of

forty-six lakhs and fifty thousand rupees shall be charged on, and paid out of,

the  Consolidated  Fund  of  the  State  of  Kerala  every  year  to  the  Travancore

Devaswom Fund; and a sum of thirteen lakhs and fifty thousand rupees shall be

charged  on,  and  paid  out  of,  the  Consolidated  Fund  of  the  State  of  2[Tamil

Nadu]  every  year  to  the  Devaswom  Fund  established  in  that  State  for  the

maintenance of Hindu temples and shrines in the territories transferred to that

State on the 1st day of November, 1956, from the State of Travancore-Cochin.]

1. Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 19 (w.e.f. 1-11-1956).


1. Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 19 (w.e.f. 1-11-1956).

2.  Subs.  by  the  Madras  State  (Alteration  of  Name)  Act,  1968  (53  of  1968),  s.  4,  for

"Madras" (w.e.f. 14-1-1969).

197

291.  [Privy  purse  sums  of  Rulers.].—Omitted  by  the  Constitution

(Twenty-sixth Amendment) Act, 1971, s. 2 (w.e.f. 28-12-1971).

CHAPTER II.—BORROWING

292.  Borrowing  by  the  Government  of  India.—The  executive power

of the Union extends to borrowing upon the security of the Consolidated Fund

of  India  within  such  limits,  if  any,  as  may  from  time  to  time  be  fixed  by

Parliament by law and to the giving of guarantees within such limits, if any,  as

may be so fixed.

293.  Borrowing  by  States.—(1) Subject to the provisions  of this article,

the executive power of a State extends to borrowing within the territory of India

upon the security of the Consolidated Fund of the State within such limits, if any,

as may from time to time be fixed by the Legislature of such State by law and to

the giving of guarantees within such limits, if any, as may be so fixed.

(2) The Government of India may, subject to such conditions as may be

laid down by or under any law made by Parliament, make loans to any State or,


(2) The Government of India may, subject to such conditions as may be

laid down by or under any law made by Parliament, make loans to any State or,

so long as any limits fixed under article 292 are not exceeded, give guarantees

in respect of loans raised by any State, and any sums required for the purpose

of making such loans shall be charged on the Consolidated Fund of India.

(3) A State may not without the consent of the Government of India raise

any loan if there is still outstanding any part of a loan which has been made to

the State by the Government of India or by its predecessor Government, or in

respect of which a guarantee  has been given by the Government of India or by

its predecessor Government.

(4)  A  consent  under  clause  (3)  may  be  granted  subject  to  such

conditions, if any, as the Government of India may think fit to impose.

CHAPTER III.—PROPERTY, CONTRACTS, RIGHTS, LIABILITIES,

OBLIGATIONS AND SUITS

294. Succession to property, assets, rights, liabilities and obligations

in certain cases.—As from the commencement of this Constitution—

(a)  all  property  and  assets  which  immediately  before  such

commencement  were  vested  in  His  Majesty  for  the  purposes  of  the

Government of the Dominion of India and all property and assets which

immediately before such commencement were vested in His Majesty for

the purposes of the Government of each Governor’s Province shall vest

respectively in the Union and the corresponding State, and

198

(b) all rights, liabilities and obligations of the Government of the

Dominion of India and of the Government of each Governor's Province,


198

(b) all rights, liabilities and obligations of the Government of the

Dominion of India and of the Government of each Governor's Province,

whether  arising  out  of  any  contract  or  otherwise,  shall  be  the  rights,

liabilities  and  obligations  respectively  of  the  Government  of  India  and

the Government of each corresponding State,

subject to any adjustment made or to be made by reason of the creation before

the commencement of this Constitution of the Dominion of Pakistan or of the

Provinces of West Bengal, East Bengal, West Punjab and East Punjab.

295. Succession to property, assets, rights, liabilities and obligations

in other cases.—(1) As from the commencement of this Constitution—

(a)  all  property  and  assets  which  immediately  before  such

commencement were vested in any Indian State corresponding to a State

specified in  Part  B  of  the  First  Schedule  shall  vest  in the  Union, if  the

purposes  for  which  such  property  and  assets  were  held  immediately

before  such  commencement  will  thereafter  be  purposes  of  the  Union

relating to any of the matters enumerated in the Union List, and

(b)  all  rights,  liabilities  and  obligations  of  the  Government  of  any

Indian  State  corresponding  to  a  State  specified  in  Part  B  of  the  First

Schedule,  whether  arising  out  of  any  contract  or  otherwise,  shall  be  the

rights, liabilities and obligations of the Government of India, if the purposes

for which such rights were acquired or liabilities or obligations were incurred

before such commencement will thereafter be purposes of the Government


rights, liabilities and obligations of the Government of India, if the purposes

for which such rights were acquired or liabilities or obligations were incurred

before such commencement will thereafter be purposes of the Government

of India relating to any of the matters enumerated in the Union List,

subject to any agreement entered into in that behalf by the Government of India

with the Government of that State.

(2) Subject as aforesaid, the Government of each State specified in Part B

of the First Schedule shall, as from the commencement of this Constitution, be the

successor  of  the  Government  of  the  corresponding  Indian  State  as  regards  all

property and assets and all rights, liabilities and obligations, whether arising out

of any contract or otherwise, other than those referred to in clause (1).

296.  Property  accruing  by  escheat  or  lapse  or  as  bona  vacantia.—

Subject  as  hereinafter  provided,  any  property  in  the  territory  of  India  which,  if

this Constitution had not come into operation, would have accrued to His Majesty

or, as the case may be, to the Ruler of an Indian State by escheat or lapse, or as

bona  vacantia  for  want  of  a  rightful  owner,  shall,  if  it  is  property  situate  in  a

State, vest in such State, and shall, in any other case, vest in the Union:

199

Provided  that  any  property  which  at  the  date  when  it  would  have  so

accrued to His Majesty or to the Ruler of an Indian State was in the possession

or under the control of the Government of India or the Government of a State


accrued to His Majesty or to the Ruler of an Indian State was in the possession

or under the control of the Government of India or the Government of a State

shall,  according  as  the  purposes  for  which  it  was  then  used  or  held  were

purposes of the Union or of a State, vest in the Union or in that State.

Explanation.—In this article, the expressions “Ruler” and “Indian State”

have the same meanings as in article 363.

1[297.  Things  of  value  within  territorial  waters  or  continental  shelf

and resources of the exclusive economic zone to vest in the Union.—(1) All

lands,  minerals  and  other  things  of  value  underlying  the  ocean  within  the

territorial  waters,  or the  continental  shelf,  or the  exclusive economic  zone,  of

India shall vest in the Union and be held for the purposes of the Union.

(2) All other resources of the exclusive economic zone of India shall also

vest in the Union and be held for the purposes of the Union.

(3) The limits of the territorial waters, the continental shelf, the exclusive

economic  zone,  and  other  maritime  zones,  of  India  shall  be  such  as  may  be

specified, from time to time, by or under any law made by Parliament.]

2[298.  Power  to  carry  on  trade,  etc.—The  executive  power  of  the

Union and of each State shall extend to the carrying on of any trade or business

and  to  the  acquisition,  holding  and  disposal  of  property  and  the  making  of

contracts for any purpose:

Provided that—


and  to  the  acquisition,  holding  and  disposal  of  property  and  the  making  of

contracts for any purpose:

Provided that—

(a) the said executive power of the Union shall, in so far as  such

trade  or  business  or  such  purpose  is  not  one  with  respect  to  which

Parliament may make laws, be subject in each State to legislation by the

State; and

(b) the said executive power of each State shall, in so far as such

trade  or  business  or  such  purpose  is  not  one  with  respect  to  which  the

State  Legislature  may  make  laws,  be  subject  to  legislation  by

Parliament.]

1. Subs. by the Constitution (Fortieth Amendment) Act, 1976, s. 2 (w.e.f. 27 -5-1976).

2. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 20 (w.e.f. 1-11-1956).

200

299. Contracts.—(1) All contracts made in the exercise of the executive

power  of  the  Union  or  of  a  State  shall  be  expressed  to  be  made  by  the

President, or by the Governor 1*** of the State, as the case may be, and all such

contracts and all assurances of property made in the exercise of that power shall

be executed  on  behalf  of  the  President  or  the  Governor  1***  by  such  persons

and in such manner as he may direct or authorise.

(2) Neither the President nor the Governor 2*** shall be personally liable


and in such manner as he may direct or authorise.

(2) Neither the President nor the Governor 2*** shall be personally liable

in  respect  of  any  contract  or  assurance  made  or  executed  for  the  purposes  of

this  Constitution,  or  for  the  purposes  of  any  enactment  relating  to  the

Government  of  India  heretofore  in  force,  nor  shall  any  person  making  or

executing  any  such  contract  or  assurance  on  behalf  of  any  of  them  be

personally liable in respect thereof.

300. Suits and proceedings.—(1) The Government of India may sue or

be sued by the name of the Union of India and the Government of a State may

sue  or  be  sued  by  the  name  of  the  State  and  may,  subject  to  any  provisions

which  may  be  made  by  Act  of  Parliament  or  of  the  Legislature  of  such  State

enacted  by  virtue  of  powers  conferred  by  this  Constitution,  sue  or  be  sued  in

relation to their respective affairs in the like cases as the Dominion of India and

the  corresponding  Provinces  or  the  corresponding  Indian  States  might  have

sued or been sued if this Constitution had not been enacted.

(2) If at the commencement of this Constitution—

(a)  any  legal  proceedings  are  pending  to  which  the  Dominion  of

India is a party, the Union of India shall be deemed to be substituted for

the Dominion in those proceedings; and


India is a party, the Union of India shall be deemed to be substituted for

the Dominion in those proceedings; and

(b) any  legal  proceedings  are  pending to  which  a  Province  or  an

Indian  State  is  a  party,  the  corresponding  State  shall  be  deemed  to  be

substituted for the Province or the Indian State in those proceedings.

3[CHAPTER IV.—RIGHT TO PROPERTY

300A.  Persons  not  to  be  deprived  of  property  save  by  authority  of

law.— No person shall be deprived of his property save by authority of law.]

1.  The  words  "or  the  Rajpramukh"  omitted  by  the  Constitution  (Seventh  Amendment)

Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).

2. The words "nor the  Rajpramukh" omitted by s. 29 and Sch., ibid. (w.e.f. 1-11-1956).

3. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 34 (w.e.f. 20-6-1979).

201

PART XIII

TRADE, COMMERCE AND INTERCOURSE WITHIN THE

TERRITORY OF INDIA

301.  Freedom  of  trade,  commerce  and  intercourse.—Subject  to  the

other provisions of this Part,   trade, commerce  and intercourse throughout  the

territory of India shall be free.

302. Power of Parliament to impose  restrictions on trade, commerce

and  intercourse.—Parliament  may    by  law  impose  such  restrictions  on  the


302. Power of Parliament to impose  restrictions on trade, commerce

and  intercourse.—Parliament  may    by  law  impose  such  restrictions  on  the

freedom  of  trade,  commerce  or  intercourse  between  one  State  and  another  or

within  any  part  of  the  territory  of  India    as  may  be  required  in  the  public

interest.

303.  Restrictions  on  the  legislative  powers  of  the  Union  and  of  the

States with regard to trade  and  commerce.—(1) Notwithstanding anything

in article 302, neither Parliament nor the Legislature of a State shall have power

to  make  any  law  giving,  or  authorising  the  giving  of,  any  preference  to  one

State over another, or making, or authorising the making of, any discrimination

between  one  State  and  another,  by  virtue  of  any  entry  relating  to  trade    and

commerce in any of the Lists in the Seventh Schedule.

(2) Nothing in clause (1) shall prevent Parliament from making any law

giving, or authorising  the giving of, any preference or making, or authorising

the  making  of,  any  discrimination  if  it  is  declared  by  such  law  that  it  is

necessary  to  do  so  for  the  purpose  of  dealing  with  a  situation  arising  from

scarcity of goods in any part of the territory of India.

304.  Restrictions  on    trade,  commerce  and  intercourse    among

States.—Notwithstanding  anything  in  article  301    or  article    303,  the


States.—Notwithstanding  anything  in  article  301    or  article    303,  the

Legislature of a State  may by law—

(a)  impose  on  goods  imported  from  other  States 1[or  the  Union

territories] any tax to which similar goods manufactured or produced in

that State are subject, so, however, as not to discriminate between goods

so imported and goods so manufactured or produced; and

(b)  impose  such  reasonable  restrictions  on  the  freedom  of  trade,

commerce or intercourse with or within that State as may be required in

the public interest:

1 .  Ins.  by  the  Constitution  (Seventh  Amendment)  Act,  1956,  s.  29  and  Sch.

(w.e.f. 1-11-1956).

202

Provided that no Bill or amendment for the purposes of clause (b) shall

be  introduced  or  moved  in  the  Legislature  of  a  State  without  the  previous

sanction of the President.

1 [305.  Saving  of  existing  laws  and  laws  providing  for  State

monopolies.—Nothing in  articles  301 and 303  shall  affect  the  provisions  of

any  existing  law  except  in  so  far    as  the  President  may  by  order  otherwise

direct;  and  nothing  in article  301 shall  affect  the  operation    of  any  law  made

before the commencement of the Constitution (Fourth Amendment) Act, 1955,

in so far as it  relates to, or prevent Parliament or the Legislature of a State from


before the commencement of the Constitution (Fourth Amendment) Act, 1955,

in so far as it  relates to, or prevent Parliament or the Legislature of a State from

making any law relating to, any such matter as is referred to in sub-clause (ii)

of clause (6) of article 19.]

306.  [Power  of  certain  States  in  Part B  of  the  First  Schedule to

impose  restrictions  on  trade  and  commerce.].—Omitted by the Constitution

(Seventh Amendment) Act, 1956, s. 29 and Sch.(w.e.f. 1-11-1956).

307.  Appointment  of  authority  for  carrying  out  the  purposes  of

articles  301  to  304.—Parliament  may  by  law  appoint  such    authority  as  it

considers  appropriate  for  carrying  out  the  purposes    of  articles  301,  302,  303

and 304, and confer on the  authority so appointed such powers and such duties

as it thinks necessary.

1 .  Subs.  by  the  Constitution  (Fourth  Amendment)  Act,  1955,  s.  4,  for  art.  305

(w.e.f. 27-4-1955).

203

PART XIV

SERVICES UNDER THE UNION AND THE STATES

CHAPTER I.— SERVICES

308. Interpretation.—In this Part, unless the context otherwise requires,

the expression “State” 1[does not include the State of Jammu and  Kashmir].

309.  Recruitment  and  conditions  of  service  of  persons  serving  the


309.  Recruitment  and  conditions  of  service  of  persons  serving  the

Union  or  a  State.—Subject to the provisions of this Constitution, Acts of the

appropriate Legislature may regulate the recruitment, and conditions  of service

of persons appointed, to public services and posts in connection with the affairs

of the Union or of any State:

Provided that it shall be competent for the President or such person as he

may direct in the case of services and posts in connection with the affairs of the

Union, and for the Governor 2*** of a State or such person as he may direct in

the  case  of  services  and  posts  in  connection  with  the  affairs  of  the    State,  to

make  rules regulating the recruitment, and the conditions of service  of persons

appointed, to such services and posts until provision in that behalf is made by

or under an Act of the appropriate Legislature under this article, and any rules

so made shall have effect subject to the provisions of any such Act.

310.  Tenure  of  office  of  persons  serving  the  Union  or  a  State.—(1)

Except  as  expressly  provided  by  this  Constitution,    every  person  who  is  a

member of a  defence service or of  a civil service of the Union or of an      all-

India service or holds any post connected with  defence or any civil post under

the Union holds office during the pleasure of the President, and  every  person

who is  a member of a civil service of a State or holds any civil post under a

State holds office  during  the pleasure of the Governor 3*** of the State.

(2) Notwithstanding that a person holding a civil post under the Union or


State holds office  during  the pleasure of the Governor 3*** of the State.

(2) Notwithstanding that a person holding a civil post under the Union or

a State holds office during the pleasure of the President or, as the case may be,

of the Governor 2*** of the State, any contract under which a person, not being

a member of a defence service or of an all-India service or of a civil service of

the  Union  or a  State,  is appointed  under this  Constitution to  hold  such  a  post

may,  if  the  President  or  the  Governor  4***,  as  the  case  may  be,  deems  it

1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for "means

a State specified in Part A or  Part B of the First Schedule" (w.e.f. 1 -11-1956).

2. The words "or Rajpramukh" omitted by s.29 and Sch., ibid (w.e.f. 1-11-1956).

3. The words "or, as the case may be, the Rajpramukh" omitted by s.29 and Sch., ibid. .

(w.e.f. 1-11-1956).

4. The words "or the Rajpramukh" omitted by s.29 and Sch., ibid. (w.e.f. 1-11-1956).

204

necessary  in  order  to  secure  the  services  of  a  person  having  special

qualifications, provide  for the payment to him of  compensation, if before the


qualifications, provide  for the payment to him of  compensation, if before the

expiration  of  an  agreed period  that  post is  abolished  or  he is,  for  reasons  not

connected with any misconduct on  his part, required to vacate that post.

311. Dismissal, removal or reduction in rank of persons employed in

civil capacities under the Union or a State.—(1) No person who is a member

of  a  civil  service  of  the    Union  or  an  all-India  service  or  a  civil  service  of  a

State  or  holds  a  civil  post  under    the  Union  or  a  State  shall  be  dismissed  or

removed by an authority subordinate to that by which he was appointed.

1[(2)  No  such  person    as  aforesaid  shall  be  dismissed  or  removed  or

reduced in  rank except after an  inquiry  in  which he  has  been  informed  of  the

charges  against  him  and  given  a  reasonable    opportunity  of  being  heard  in

respect of those charges 2***:

3[Provided that where it is proposed after such inquiry, to impose upon

him  any  such  penalty,  such  penalty  may  be  imposed  on  the  basis  of  the

evidence adduced during such inquiry and it shall not be necessary to give such

person any opportunity of making  representation on  the penalty proposed:

Provided further that this clause shall not apply—]

(a) where a person is dismissed or removed or reduced in rank on

the  ground  of  conduct  which  has  led  to  his  conviction  on  a  criminal


(a) where a person is dismissed or removed or reduced in rank on

the  ground  of  conduct  which  has  led  to  his  conviction  on  a  criminal

charge; or

(b) where the authority empowered to dismiss or remove a person

or to reduce him in rank is satisfied that for some reason, to be recorded

by that authority in writing, it is not  reasonably practicable to hold such

inquiry; or

(c)  where  the  President  or  the  Governor,  as  the  case  may  be,  is

satisfied that in the interest of the security of the State it is not expedient

to hold such inquiry.

(3)  If,  in  respect  of  any  such  person  as  aforesaid,  a  question  arises

whether  it  is  reasonably  practicable  to  hold  such  inquiry  as  is  referred  to  in

clause  (2),  the  decision  thereon  of  the  authority  empowered  to  dismiss  or

remove such person  or to reduce him in rank shall be final.]

1. Subs. by the Constitution (Fifteenth Amendment) Act, 1963, s. 10, for cls. (2) and (3)

(w.e.f. 5-10-1963).

2. Certain words omitted by the Constitution (Forty-second Amendment) Act, 1976, s. 44

(w.e.f. 3-1-1977).

3. Subs. by s. 44, ibid., for certain words (w.e.f. 3-1-1977).

205

312. All-India services.—(1) Notwithstanding anything in 1[Chapter VI