s Nos 49 60 61 and 80 of 1967
Writ Petitions under article 32 of the Constitution of India for the enforcement of fundamental rights
K Narayanaswamy and Lily Thomas for the petitioner in WP No 49 of 1967
Sadhu Singh for the petitioner in WP No 60 of 1967
SK Dholakia and Sadhu Singh for the petitioner in WP No 61 of 1967
ST Desai and Sadhu Singh for the petitioner in WP No 80 of 1967
CK Daphtary Attorney General BL lyengar RH Dhebar for RN Sachthey for the respondents in WP No 49 of 1967
RH Dhebar for RN Sachthey for the respondents in WPs
Nos 60 61 and 80 of 1967
The Judgment of the Court was delivered by Bachawat J
In all these writ petitions the petitioners challenge the vires of the Taxation Laws Extension to Union Territories Regulation No 3 of 1963
The contention is that the President had no power to promulgate the Regulation under article 240 of the Constitution
On August 16 1962 Pondicherry became a Union Territory
On December 5 1962 Parliament enacted the Pondicherry Administration Act 1962 Act No 49 of 1962
Section 4 1  of this Act provided that all laws in force immediately before August 19 1962 would continue to be in force in 105 Pondicherry until amended or repealed by a competent legislature or other competent authority
Section 42 empowered the Central Government to make necessary adaptations and modifications for the purpose of facilitating the application of any such law in relation to the administration of Pondicherry and bringing the provisions of any such law into accord with the provisions of the Constitution
Section 7 provided that all taxes duties cesses and fees which immediately before August 19 1962 were being lawfully levied would continue to be levied in Pondicherry and to be applied for the same purposes until other provision was made by a competent legislature or other competent authority
After the passing of this Act the petitioners continued to be subjeer to the existing French laws relating to income tax
On March 30 1963 the President in the exercise of the powers conferred on him by article 240 of the Constitution promulgated the impugned Regulation No 3 of 1963
The Regulation extended certain Indian Acts relating to taxation to the Union territories mentioned therein
Section 3 2 of the Regulation extended the Income tax Act 1961 subject to the modifications mentioned in Part II of the Schedule to Pondicherry as from April 1 1963
Section 41 provided that any law in force in Pondicherry corresponding to the Income tax Act 1961 would stand repealed on April 1 1963
The petitioners carry on business at Pondicherry and are being assessed to income tax under the Income tax Act
They have filed the present writ petitions asking for a declaration that the Income tax Act 1961 was not legally extended to Pondicherry and a direction prohibiting the respondents from implementing that Act in relation to Pondicherry
In the Constitution of India as originally enacted India was declared to be a Union of States article 1 1
The States and their territories were specified in Parts A B and C of the First schedule article 12
The territory of India consisted of the territories of the States the territories specified in Part D of the First Schedule Andaman and Nicobar Islands and such other territories as may be acquired article 1 3
As original enacted
part VI of the Constitution dealt with Part A States Part VII dealt with Part B States Part VIII dealt with Part C States and Part IX dealt with the territories specified in Part D of the First Schedule
The Constitution Seventh Amendment Act passed on October 19 1956 altered the scheme of division of India in to A B and C States and the territories mentioned in Part D of the first Schedule
Article 1 and the First Schedule were amended so that the territory of India would comprise the territories of the states the Union territories specified in the First Schedule and such other territories as may be acquired
By cl 30 added to article 66 Union territory was defined to mean any Union territory specified in the First Schedule and to include any other territory supp
CI68 8 106 comprised within the territory of India but not specified in that Schedule
Consequential amendments were made in Part VI and other Parts of the Constitution
Parts VII and IX were repealed
Part VIII was drastically amended
The title of Part VIII was altered to that of Union Territories
The amended article 239 provided for the administration of Union territories by the President acting through an administrator to be appointed by him
The amended article 240 was in these terms 240
Power of President to make regulations for certain Union territories  1  The President may make regulations for the peace progress and good government of the Union territory of a the Andaman and Nicobar Islands b the Laccadive Minicoy and Amindivi Islands
2 Any regulation so made may repeal or amend any Act made by Parliament or any existing law which is for the time being applicable to the Union territory and when promulgated by the President shall have the same force and effect as an Act of Parliament which applies to that territory
 The amended article 241 dealt with High Courts for Union territories
Article 242 relating to Coorg was repealed
Article 240 1 and the First Schedule were amended from time to time
The Constitution Fourteenth Amendment Act passed on December 28 1962 amended the First Schedule and article 240 and added article 239A Article 239A and the amended article 240 are in these terms 239A 1  Parliament may by law create for any of the Union territories of Himachal Pradesh Manipur Tripura Goa Daman and Diu and Pondicherry a a body whether elected or partly nominated and partly elected to function as a Legislature for the Union territory or b a Council of Ministersor 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 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
107 240
1 The President may make regulations for the peace progress and good government of the Union territory of a the Andaman and Nicobar Islands b the Laccudive Minicoy and Amindivi Islands c Dadra and Nagar Haveli d Gao Daman and Diu e Pondicherry Provided that when any body is created under article 239A to function as a Legislature for the Union teriyaki of Goa Daman and Diu or Pondicherry the President shall not make any regulation for the peace progress and good government of that Union territory with effect from the date appointed for the first meeting of the Legislature
2 Any regulation so made may repeal or amend any Act made by Parliament or any existing law which is for the time being applicable to the Union territory and when promulgated by the President shall have the same force and effect as an Act of Parliament which applies to that territory Regulation No 3 of 1963 was made by the President in the exercise of the power conferred on him to make regulations for the peace progress and good government of the Union territories
The contention that under article 240 the President can make regulations limited to the subject of law and order only cannot be accepted
The grant of legislative power to make laws regulations or ordinances for British dependencies has long been expressed in the common form of that of making laws regulations or ordinances for peace and good government of the territory or similar objects such as peace order and good government peace welfare and good government and peace progress and good government of the territory
Instances of this common form of grant of legislative power to legislatures and authorities in India are section 42 of the Indian Councils Act 1861 sections 71 72 80A of the Government of India Act 1915 section 72 of the ninth Schedule and section 922 of the Government of India Act1935
Such a power was held to authorise the utmost discretion of enactment for the attainment of peace order and good government of the territory and a Court will not enquire whether any particular enactment made in the exercise of this power in fact promotes those objects Riel vs Queen Chenard and Co vs Joachim Arissol2
The words peace order and good government and 1  678 679
2  132
108 similar expressions are words of very wide import giving wide discretion to the authority empowered to pass laws for such purposes Attorney General for Saskatchewan vs Canadian Pacific Ry
CO1 King Emperor vs Benoari Lal Sarma2
In Jogendra Narayan Deb vs Debendra Narayan Roy3 Sir George Rankin said that the words have reference to the scope and not to the merits of the legislation
Girindra Nath Banerjee vs Birendra Nath Pal4 he said that these words are used because they are words of the widest significance and it is not open to a Court of law to consider with regard to any particular piece of legislation whether in fact it is meritorious in the sense that it will conduce to peace or to good government
It is sufficient that they are words which are intended to give subject to the restrictions of the Act a legislating power to the body which it invests with that authority
 Article 240 of the Constitution confers on the President a general power of making regulations for the peace progress and good government of the specified Union territories
In exercise of this power the President may make a regulation repealing or amending any Act made by Parliament or any existing law which is for the time being applicable to the Union territory
The regulation when promulgated by the President has the stone force and effect as an Act of Parliament which applies to that territory
The President can thus make regulations on all subjects on which Parliament can make laws for the territory
Parliament has plenary power to legislate for the Union territories with regard to any subject
With regard to Union territories there is no distribution of legislative power
Article 2464 enacts that Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List
 In RK Sen vs Union3 it was pointed out that having regard to article 367 the definition of State in section 358 of the applies for the interpretation of the Constitution unless there is anything repugnant in
the subject or context
Under that definition the expression State as respects any period after the commencement of the Constitution Seventh Amendment Act 1956 shall mean a State specified in the First Schedule to the Constitution and shall include a Union territory  But this inclusive definition is repugnant to the subject and con text of article 246
There the expression State means the State specified in the First Schedule
There is a distribution of legislative power between Parliament and the legislatures of the States Exclusive power to legislate with respect to the matters enumerated in the State List is assigned to the legislatures of the States esta 1  613 614  2 1914 LR 72 IA 57 72
3 1942 LR 69 IA 76 90
4 Cal
727 738 5   433 109 blished by Part V1
There is no distribution of legislative power with respect to Union territories
That is why Parliament is given power by article 2464 to legislate even with respect to matters enumerated in the State List
If the inclusive definition of State in section 358 of the were to
apply to article 2464 Parliament would have no power to legislate for the Union territories with respect to matters enumerated in the State List and until a legislature empowered to legislate on those matters is created under article 239A for the Union territories there would be no legislature competent to legislate on those matterS moreover for certain territories such as the Andaman and Nicobar Islands no legislature can be created under article 239A and for such territories there can be no authority competent to legislate with respect to mattersenumerated in the State List
Such a construction is repugnant to the subject and context of article 246
It follows that m view of article 2464 Parliament has plenary powers to make laws for Union territories on all matters
Parliament can by law extend the Income tax Act 1961 to a Union territory with such modifications as it thinks fit
The President in the exercise of his powers under article 240 can make regulations which have the same force and effect as an Act of Parliament which applies to that territory
The President can therefore by regulation made under article 240 extend the Income tax Act 1961 to that territory with such modifications as he thinks lit
The President can thus make regulations under article 240 with respect to a Union territory occupying the same field on which Parliament can also make laws
We are not impressed by the argument that such overlapping of powers would lead to
a clash between the President and Parliament
The Union
territories
are centrally administered through the President acting through an administrator
In the cabinet system of Government the President acts on the advice of the Ministers who are responsible Parliament
The proviso to article 2401 lays down the condition for the cesser of power of the President to make regulations under article 2401
The power of the President to make regulations for the Union territory of Goa Daman and Diu or Pondicherry ceases when a legislature for the territory is created with effect from the date appointed for the first meeting of the legislature
But until such a legislature is created the President retains his full power to make regulations for those territories
The proviso does not act as a fetter on the general power of the President to make regulations for the Union territory while no legislature for that territory is brought into
existence
The proviso does not enact as is suggested by the petitioners that the power of the President is confined 110 to making laws with respect to the matters enumerated in the State List and the Concurrent List
The argument is that a legislature created under article 239A can be authorised to pass laws with respect to those matters only and having regard to
the proviso to article 2401 the President s power to make regulations under article 240 is similarly circumscribed
As a matter of fact the created local legislatures for the Union territories of Himachal Pradesh Manipur
Tripura Goa Daman and Diu and Pondicherry and section 18 of the Act conferred on those legislatures power to make laws for those territories with respect to the matters enumerated in the State List or the Concurrent List
Assuming that the local legislature created under article 239A can be authorised to make laws with respect only to the matters enumerated in the State List or the Concurrent List it does not follow that the power of the President to make regulations under article 240 is so limited
By the express words of article 240 the President can make regulations for the peace progress and good government of the specified Union territories
Any regulation so made may repeal or amend any Act made by Parliament and applicable to that territory
When promulgated by the President the regulation has the same force and effect as an Act of Parliament applicable to that territory
This general power of the President to make regulations extends
to all matters on which Parliament can legislate
It may be recalled that article 239A and the proviso to article 2401 were inserted by the Constitution Fourteenth Amendment Act
Under article 240 as it stood after the Constitution Seventh Amendment Act and before the enactment of the Constitution Fourteenth Amendment Act it could not be contended that the general power of the President to make regulations under article 2401 was limited to matters enumerated in the State List and the Concurrent List
The position was not changed by the insertion of article 239A and the proviso to article 2401 by the Constitution Fourteenth Amendment Act
Moreover article 239A does not authorise Parliament to create legislatures for the Union territories of the Andaman and Nicobar Islands Laccadive Minicoy and Amindivi Islands and Dadra and Nagar Haveli
It is clear therefore that the power of the President to make regulations with respect to those territories is not limited by the proviso to article 240 1 
We are satisfied
that the proviso to article 2401 on its true construction does not fetter the power of the President to make regulations for any of the Union territories specified in article 2401 including Pondicherry as long as no Legislature is created for the territory
It was suggested that there is no provision for the distribution of the income tax attributable to Union territories and therefore the President could not extend the Income tax Act 1961 to the Union territories
If this argument were sound even Parliament 111 could not extend the Income tax Act to the Union territories
Moreover the argument overlooks article 270 which shows that the income tax attributable to Union territories forms part of the Consolidated Fund of India
It is not necessary to make any distribution of income tax with respect to Union territories as those territories are centrally administered through the President
There is no force in the contention that the President cannot make a law with respect to income tax in the absence of an express grant of such a power
There is distribution of legislative power between the Centre and the States and consequently distinct grants of taxing power are made in the legislative lists
With respect to Union territories there is no distribution of legislative power
For the Union territories Parliament has plenary powers to make laws and the President has general powers to make regulations
In the exercise of his powers under article 240 the President could make Regulation No 3 of 1963 extending the Income tax Act 1961 and other laws to the Union territories
The petitions are dismissed with costs one hearing fee
Petitions dismissed


Summary:
Parliament enacted the Pondicherry Administration Act
which provided that all laws in force immediately before August 19
1962 when Pondicherry became a Union territory were to continue to be in force until amended or repealed by a competent legislature or other competent authority
The President in exercise of the powers conferred on him by article 240 of the Constitution to make regulations of peace progress and good government of the Union territories promulgated the Tax Laws Extension to Union Territories Regulation
By this Regulation the laws in force in relation to income tax in Union territory of Pondcherry were repeated and the Indian Income tax Act 1961 was made applicable
The petitioners challenged the rites of the Regulation
HELD The Regulation is valid
The power of the President to make regulations under article 240 is not limited to the subject of law and order
Authority to make regulations for peace
progress and good government is a common form of grant of legislative power and the expression peace progress and good government is of very wide import giving wide discretion to the authority empowered to pass laws for such purposes
The President can make regulations with respect to a Union territory occupying the same field on which Parliament can also make laws
Such a regulation may repeal or amend any Act made by Parliament or any existing law which is for the time being applicable to the Union territory and when promulgated has the same force and effect as an Act of Parliament which applies to that territory
107E 108D Riel vs queen
Chenard and Co vs Joachim Arissol  Attorney General for Saskatchewan vs Canadian Pacific Ry
Co  King Emperor vs Benoari Lal Sarma 1914 LR 72 IA 57
Jogendra Narayan Deb vs Debendra Narayan Roy 1942 LR 69 IA 76 and Girindra Nath Banerjee vs Birendra Nath Pal
Cal 727 referred to
Parliament has by virtue of article 2464 power to make laws with respect to any matter including matters enumerated in the State List for any part of the territory of India not included in a State
With regard to Union territories there is no distribution of legislative power 104 and Parliament has plenary power to make laws for those territories on any subject
Though the definition of State in section 358 of the  taking within it Union territories applies to the interpretation of the Constitution this inclusive definition is repugnant to the subject and context of article 246
There the expression State means the State specified in the FirSt Schedule
Parliament can by law extend the Income tax Act 1961 to a Union territory with such modifications as it thinks fit
The President can therefore by regulation do the same
108E 109A D RK Sen vs Union   referred to
The power of the President to make regulations for any of the Union territories specified in article 2401 so long as no legislature is created for the territory is not fettered by the
proviso to article 24 02  or limited to matters enumerated in the State List and the
Concurrent list
110G It is not necessary to make any distribution of income tax with respect to Union territories as those territories are centrally administered through the President
111A B