Case: Union of India Vs. Shri Harbhajan Singh Dhillon

or purpose of the Act, in so far as it does not plainly appear from its terms and its probable effect, is that of an incorporeal entity, namely, the Legislature and, generally speaking, the speeches of individuals would have little evidential weight".77. Although it is not necessary to decide the question whether the impugned Act falls within entry 86 List I read with entry 97 List I, or entry 97 List I alone, as some of our brethren are of the view that the original Wealth Tax Act fell under entry 86 List I, we might express our opinion on that point. It seems to us that there is a distinction between a true net wealth tax and a tax which can be levied under entry 86 List I. While legislating in respect of entry 86 List I it is not incumbent on Parliament to provide for deduction of debits in ascertaining the capital value of assets. Similarly, it is not incumbent on State Legislatures to provide for deduction of debits while legislating in respect of entry 49 List II. For example the State Legislature need not, while levying tax under entry 49 List II, provide for deduction of debits owed by the owner of the property. It seems to us that the other part of entry, i.e. "tax on the capital of companies." in entry 86 List I also seems to indicate that this entry is not strictly concerned with taxation of net wealth because capital of a company is in one sense a liability of the company and not its asset. Even if it is regarded as an asset, there is nothing in the entry to compel Parliament to provide for deduction of debits. It would also be noticed that entry 86. List I deals only with individuals and companies but net wealth tax can be levied not only on individuals but on other entities and associations also it is true that under entry 86 List I aggregation is necessary because it is a tax on the capital value of assets of an individual but it does not follow from this that Parliament is obliged to provide for deduction of debits in order to determine the capital value of assets of an individual or a company. Therefore, it seems to us that the whole of the impugned Act clearly falls within entry 97 List I. We may mention that this Court has never held that the original Wealth Tax Act fell under entry 86 List I. It was only assumed that the original Wealth Tax Act fell within entry 86 List I and on that assumption this entry was analysed and contrasted with entry 49 List II. Be that as it may, we are clearly of the opinion that no part of the impugned legislation falls within entry 86 List I.78. However, assuming that the Wealth Tax Act, as originally enacted, is held to be legislation under entry 86 List I, there is nothing in the Constitution to prevent Parliament from combining its powers under entry 86 List I with its powers under entry 97 List I. There is no principle that we know of which debars Parliament from relying on the powers under specified entries 1 to 96. List I and supplement them with the powers under entry 97 List I and Art 248, and for that matter powers under entries in the Concurrent List.79. In 1940 FCR 188 (203) = (AIR 1941 FC 47), Gwyer, C.J., while dealing with the validity of the Madras Agriculturists Relief Act 1938, observed:"That the provisions of the Act in their application to the decree obtained by the appellant were within the competence of the Madras Legislature to enact does not seem to me open to doubt. They may be justified by reference to entry no.4 and no.15 of List III, perhaps also to entry no. 2 in List II; I do not say that there may not be others, but these will suffice".80. In State of Bombay v. Narothamdas Jethabhai, 1951 SCR 51 = (AIR 1951 SC 69 ), Patanjali Sastri and Das, JJ., as they then were, relied on both items 1 and 2 of List II of the Government of India Act, 1935, to uphold the Bombay City Civil Court Act, 1948.81. It was contended that the case of residuary powers was different but we are unable to see any difference in principle. Residuary power is as much a power as the power conferred under Art. 246 of the Constitution in respect of a specified item.82. In in re the Regulation and Control of Aeronautics in Canada, 1932 AC 54 at p. 77 the Privy Council upheld the validity of a Parliamentary statute after supplementing the powers under the specified items in S.91 with the residuary powers. It observed:"To sum up, having regard (a) to the terms of S.132; (b) to the terms of the Convention which covers almost every conceivable matter relating to aerial navigation; and (c) to the fact that further legislative powers in relation to serial navigation reside in the Parliament of Canada by virtue of S.91, items 2, 5, and 7, it would appear that substantially the whole field of legislation in regard to aerial navigation belongs to the Dominion. There may be a small portion of the field which is not by virtue of specific words in the British North America Act vested in the Dominion; but neither is it vested by, specific words in the Provinces. As to that small portion it appears to the Board that it must necessarily belong to the Dominion under its power to make laws for the peace order and good government of Canada. Further their Lordships are influenced by the facts that the subject of aerial navigation and the fulfilment of Canadian obligations under S.132 are matters of national interest and importance; and that aerial navigation is a class of subject which has attained such dimensions as to affect the body politic of the Dominion."(emphasis supplied).83.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Art. 246 with the three lists in the Seventh Schedule, it is quite clear that Parliament has exclusive power to make laws with respect to all the matters enumerated in List I and this notwithstanding anything in clauses (2) and (3) of Art. 246. The State Legislatures have exclusive powers to make laws with respect to any of the matters enumerated in List II, but this is subject to clauses (1) and (2) of Article 246. The object of this subjection is to make Parliamentary legislation on matters in List I and III paramount. Under cl. (4) of Art. 246 Parliament is competent also to legislate on a matter enumerated in State List for any part of the territory of India not included in a State. Article 248 gives the residuary powers of legislation to the UnionArt. 250 Parliament can legislate with respect to any matter in the State list if a proclamation of emergency is in operation. Under Art. 253 Parliament has power to make any law for the whole or part of the territory of India for the purpose of implementing any international treaty, agreement or convention.14. This scheme of distribution of legislative power has been derived from the Government of India Act 1935, but in one respect there is a great deal of difference, and it seems to us that this makes the scheme different insofar as the present controversy is concerned. Under the Government of India Act, the residuary powers were not given either to the Central Legislature or to the Provincial Legislatures. The reason for this was given in the Report of the Joint Committee on Indian Constitutional Reform, volume I para 56. The reason was that there was profound cleavage of opinion existing in India with regard to allocation of residuary legislative powers. The result was the enactment of S.104 of the Government of IndiaThere does not seem to be any dispute that the Constitution makers wanted to give residuary powers of legislation to the Union Parliament. Indeed, this is obvious from Art. 248 and entry 97 List I. But there is a serious dispute about the extent of the residuary power.17. It will be noticed that all the matters and taxes which have been excluded, except taxes on the capital value of agricultural land under entry 86 List I fall specifically within one of the entries in List II. While taxes on agricultural income have been excluded from entry 82 List I, they form entry 46 List II, duties of excise excluded in entry 84 List I have been included in entry 51 List II; agricultural land exempt in entry 87 has been incorporated as entry 48 List II; and similarly, agricultural land exempted from the incidence of duties in respect of succession to property has been made the subject matter of duties in respect of succession in entry 47 List II.18. It seems to us that from this scheme of distribution it cannot be legitimately inferred that taxes on the capital value of agricultural land were designedly excluded from entry 97 List I. In this connection it is well to remember that the first draft of the 3 lists was attached to the report of the Union Powers Committee dated July 5, 1947 (see Vol. V Constituent Assembly Debates, page 60) List I then consisted of 87 entries and there was no residuary entry. It was on August, 1947 that Mr. N. Gopalaswami Ayyangar moved that this report be taken into consideration. At that stage it was evident that in the case of Indian States the residuary subjects were to stay with the Indian States unless they were willing to cede them to the Centre.It seems to us that the function of Article 246 (1) read with Entries 1-96, List I, is to give positive power to Parliament to legislate in respect of these entries. Object is not to debar Parliament from legislating on a matter, even if other provisions of the Constitution enable it to do so. Accordingly we do not interpret the words "any other matter" occurring in Entry 97, List I to mean a topic mentioned by way of exclusion. These words really refer to the matters contained in each of the Entries 1 to 96. The words "any other matter" has to be used because Entry 97, List I follows Entries 1-96, List I. It is true that the field of legislation is demarcated by Entries 1-96, List 1, but demarcation does not mean that if Entry 97 List I confers additional powers, we should refuse to give effect to it. At any rate, whatever doubt there may be on the interpretation of Entry 97, List I is removed by the wide terms of Article 248. It is framed in the widest possible terms. On its terms the only question to be asked is: Is the matter sought to be legislated included in List II or in List III or is the tax sought to be levied mentioned in List II or in List III : No question has to be asked about List I. If the answer is in negative then it follows that Parliament has power to make laws with respect to that matter or tax.21. It must be remembered that the function of the lists is not to confer powers; they merely demarcate the legislative field.We are compelled to give full effect to Article 248 because we know of no principle of construction by which we can cut down the wide words of a substantive article like Article 248 by the wording of an entry in Schedule VII. If the argument of the respondent is accepted, Article 248 would have to be re-drafted ashas exclusive power to make any law with respect to any matter not mentioned in the Concurrent List or State List, provided it has not been mentioned by way of exclusion in any entry in Listsimply have not the power to add a proviso like this to Article 248.24. We must also mention that no material has been placed before us to show that it was ever in the mind of anybody, who had to deal with the making of the Constitution, that it was the intention to prohibit all the legislatures in this country from legislating on a particular topic.We do not think it is legitimate manner of interpretation. The debates show that notwithstanding that certain taxes were known to the members of the Constituent Assembly they were not mentioned in the final list. Yet it can hardly be argued that they would not fall within the residuary powers.Two points emerge from this. The Constituent Assembly knew how to prohibit Parliament from levying a tax (See proposed Article 198-A set out above.) Secondly they knew of certain taxes as taxes on the use of consumption of goods. The proposal to include them in the Provincial List was not accepted. Indeed, Shri T.T. Krishnamachari said this about thisAssembly Debates Vol. 7 p. 232"Sir, one other recommendation of the Export Committee is I am afraid, rather mischievous. That is, they have suggested in regard to sales tax - which is Item 58 in List 2 - that the definition should be enlarged so as to include Use Tax as well, going undoubtedly on the experience of the American State Use Tax which, I think, is a pernicious recommendation. I think, it finds a reflection in the mention of Sales Tax in Item 58 which ought not to be there".If Parliament were to levy a Use Tax, it could hardly be thrown out on the ground that it cannot be included in the residuary powers because the tax was known at the time of the framing of the Constitution. Indeed it does not seem to be a sound principle of interpretation to adopt to first ascertain whether a tax was known to the framers of the Constitution and include it in the residuary powers only if it was not known. This would be an impossible test to apply. Is the Court to ask members of the Constituents Assembly to give evidence or is the Court to presume that they know of all the possible taxes which were being levied throughout the world? In our view the only safe guide for the interpretation of an article or articles of an organic instrument like our Constitution is the language employed, interpreted not narrowly but fairly in the light of the broad and high purposes of the Constitution but without doing violence to the language. To interpret Article 248 in the way suggested by the respondent would in our opinion be to do violence to the language.32. We are, however, glad to find from the following extracts from the debates that our interpretation accords with what wasHonourable Dr. B. R. Ambedkar (Constituent Assembly Debates, Vol.9 pagesPresident, I propose to deal with the objection raised by my friend Sardar Hukam Singh. I do not think he has realised what is the purpose of entry 91 and I should therefore like to state very clearly what the purpose of entry 91 in List I is. It is really to define a limit or scope of List I and I think we could have dealt with this matter, viz. of the definition of and scope of Lists II and III by adding an entry such as 67 which would read:"Anything not included in List II or III shall be deemed to fall in List I". That is really the purpose of it. It could have been served in two different ways, either having an entry such as the one 91 included in List I or to have an entry such as the one which I have suggested - that anything not included in List II or III shall fall in List I". That is the purpose of it. But such an entry is necessary and there can be no question about it. Now I come to the other objection which has been repeated if not openly at least whispered as to why we are having these 91 entries in List I when as a matter of fact we have an article such as 223 which is called residuary article which is Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List. Theoretically I quite accept the proposition that when anything which isnot included in List II or ListIII is by a specific article of the Constitution handed over to the Entry it is unnecessary to enumerate these categories which we have specified in List I. The reason why this is done is this. Many States people, and particularly the Indian States at the beginning of the labours of the Constituent Assembly, were very particular to know what are the legislative powers of the Centre. They wanted to know categorically and particularly; they were not going to be satisfied by saying that the Centre will have only residuary powers. Just to allay the fears of the Provinces and the fears of the Indian States, we had to particularise what is included in the symbolic phrase "Residuary powers". That is the reason why we had to undergo this labour notwithstanding the fact that we had Article 223.I may also say that there is nothing very ridiculous about this, so far as our Constitution is concerned, for the simple reason that it has been the practice of all federal constitutions to enumerate the powers of the Centre, even those federations which have got residuary powers given to the Centre. Take for instance the Canadian Constitution. Like the Indian Constituion, the Canadian Constitution also gives what are called residuary powers to the Canadian Parliament. Certain specified and enumerated powers are given to the Provinces. Notwithstanding this fact the Canadian Constitution. I think in Article 99, proceeds to enumerate certain categories and certain entries on which the Parliament of Canada can legislate. That again was done in order to allay the fears of the French Provinces which were going to be part and parcel of the Canadian Federation. Similarly also in the Government of India Act; the same scheme has been laid down there and Section 104 of the Government of India Act, 1935 is similar to Article 223 here. It also lays down the proposition that the Central Government will have residuary powers. Notwithstanding that, it had its List I. Therefore there is no reason, no ground to be over-critical about this matter. In doing this we have only followed as I said, the requirements of the various Provinces to know specifically what these residuary powers are, and also we have followed well-known conventions which have been followed in any other federal constitutions. I hope the House will not accept either the amendment of my Friend Sardar Hukam Singh nor take very seriously the utterings of my Friend Mr. Naziruddin Ahmad".It seems to us that this discussion clearly shows that it was realised that the old entry 91 would cover every matter which is not included in Lists II and III, and that entries were enumerated in List I following the precedent of the Canadian Constitution and also to inform the provinces and particularly the Indian States as to the legislative powers the Union was going toT.T. Krishnamachari (Constituent Assembly Debates, Vol.11,would in this connection deal with a point raised regarding the vesting of the residuary powers. I think more than one honourable Member mentioned that the fact that the residuary power is vested in the Centre in our Constitution, makes it a unitary Constitution. It was, I think, further emphasised by my honourable Friend Mr. Gupta in the course of his speech. He said: "The test is there. The residuary power is vested in the Centre. I am taking my Friend Mr. Gupta quite seriously, because he appears to be a careful student who has called out this particular point from some text book on federalism. I would like to tell honourable Members that it is not a very important matter in assessing whether a particular Constitution is based on a federal system from the point of view whether the residuary power is vested in the States or in the Central Government. Mr. K. C. Wheare who has written recently a book on Federalism has dealt with thisif you ask me why we have really kept the residuary power with the Centre and whether it means anything at all, I will say that it is because we have gone to much absolute length to enumerate the powers of the Centre and of the States and also the powers that are to be exercised by both of them in the concurrent field. In fact, to quote Professor Wheare again, who has made a superficial survey of the Government of India Act, the best point in the Government of India Act is the complete and exhaustive enumeration of powers of Schedule VII.To my mind there seems to be the possibility of one power that has not been enumerated, which might be exercised in the future by means of the use of the residuary power, namely the capital levy on agricultural land. This power has not been assigned either to the Centre or to the Units. It may be that following the scheme of Estate Duty and succession duty on urban and agricultural property, even if the Centre has to take over this power under the residuary power after some time. It would assign the proceeds of this levy to the provinces, because all things that are supposed to be associated with agriculture are assigned to the provinces.(emphasis supplied) I think the vesting of the residuary power is only a matter of academic significance today. To say that because residuary power is vested in the Centre and not in the provinces this is not a Federation would not be correct".The above speech of Mr. T. T. Krishnamachari shows that the members were aware that certain known taxes had not been included specifically in the three lists.38. It is, therefore, difficult to escape from the conclusion that in India there is no field of legislation which has not been allotted either to Parliament or to the Stateis true that there are some limitations in Part III of the Constitution on the legislatures in India but they are of a different character. They have nothing to do with legislative competence. If this is the true scope of residuary powers of Parliament, then we are unable to see why we should not, when dealing with a Central Act, enquire whether it is legislation in respect of any matter in List II for this is the only field regarding which there is a prohibition against Parliament. If a Central Act does not enter or invade these prohibited fields there is no point in trying to decide as to under which entry or entries of List I or List III a Central Act would rightly fit in.40. It was accepted that this test had been applied in Canada, but it was argued that the Canadian Constitution is completely different from the Indian Constitution. It is true that the wording of Ss. 91 and 92 of the Canadian Constitution is different and the Judicial Committee has interpreted these sections differently at different periods, but whatever the interpretation, it has always held that the lists are exhaustive. The scheme of distribution of Legislative powers between the Dominion and the Provinces is essentially the same as under our Constitution. In this matter it is best to quote the words of the Judicial Committee or some learned authors rather than interpret Ss. 91 and 92 ourselves.It is quite true, as Mr. Palkiwala points out, that one way of reading Ss. 91 and 92 of the Canadian Constitution is that S.91 gives general powers and then gives certain specific powers by way of illustration, and that apparently was the interpretation placed on the Act by the Privy Council before 1896 AC 348. But whatever the interpretation, the same test was applied by the Privy Council before 1896 in Russel v. The Queen, (1882) 7 AC 829   and after this case.48. The learned counsel referred to five cases of this court and the Federal Court to show that the Canadian cases should not be relied on as the Canadian Constitution was different. It is true that the Canadian Constitution is different in many respects and for some purposes it would be misleading to rely on the Canadian cases. In Chhotabhai Jethabhai Patel v. Union of India, (1962) Supp 2 SCR 1 = (AIR 1962 SC 1006  ) the question was the interpretation of Entry 84 List I (Duties of excise on tobacco....) and entry 60 List II (Taxes on professions, trades, calling and employments). This Court held that the Canadian cases which were cited before it did not afford any assistance because in Canada analogous problems are always concerned with questions of direct and indirect taxation. We agree that in the interpretation of entry 84 (duties of excise...) it would be misleading to rely on cases dealing with direct and indirect taxation.Be that as it may, we are unable to see how the adoption of this mode of enquiry will destroy the federal structure of our Constitution. The State Legislatures have full legislative authority to pass laws in respect of entries in List II, and subject to legislation by Parliament on matters in List III.59. It was also said that if this was the intention of the Constitution makers they need not have formulated List I at all. This is the point which was taken by Sardar Hukam Singh and others in the debates referred to above and was answered by Dr. Ambedkar. But apart from what has been stated by Dr. Ambedkar in his speech extracted above there is some merit and legal effect in having included specific items in List I for when there are three lists it is easier to construe List II in the light of Lists I and II. If there had been no List I, many items in List II would perhaps have been given much wider interpretation than can be given under the present scheme. Be that as it may, we have the three lists and a residuary power and therefore it seems to us that in this context; if a Central Act is, challenged, as being beyond the legislative competence of Parliament, it is enough to enquire if it is a law with respect to matters or taxes enumerated in List II. If it is not, no further questionthis matter we have three decisions of this Court and although these decisions were challenged we are of the opinion that they interpreted Entry 49 List II correctly.The requisites of a tax under entry 49, List II may be summarisedIt must be a tax on units, that is lands and buildings separately as units.(2) The tax cannot be a tax on totality, i.e. it is not a composite tax on the value of all lands and buildings.(3) The tax is not concerned with the division of interest in the building or land. In other words, it is not concerned whether one person owns or occupies it or two or more persons own or occupy it.In short, the tax under entry 49 List II is not a personal tax but a tax on property.67. It seems to us that this Court definitely held and we agree with the conclusion that the nature of the Wealth Tax imposed under the Wealth Tax Act, as originally stood, was different from that of a tax under entry 49, List II, and it did not fall under this entry.68. The distinction between a net wealth tax and tax on property is clearly brought out in the following extracts, and supports the conclusion arrived at by this Court.69. Readings on Taxation in Developing Countries by Fird and Oldman elucidates the concept of Wealth Tax as follows, at pageterm net wealth tax is usually defined as a tax annually imposed on the net value of all assets less liabilities of particular tax-payers - especially individuals. This definition distinguishes the net wealth tax from other types of taxation of net wealth, such as death duties and a capital levy; the former are imposed only at infrequent intervals - once a generation - while the latter is a one-time charge, usually with the primary purpose of redeeming a war-time national debt. The net wealth tax is really intended to tax the annual yields of capital rather than the principal itself as do death duties or a capital levy, even though it is levied on the value of the principal. Since it taxes net wealth, it also differs from property taxes imposed on the gross value of property - primarily real property - in a number of countries. The net wealth tax gives consideration to the taxpayers taxable capacity through the deduction of all outstanding liabilities and personal exemptions as well as through other devices, while the property tax generally does not take these factors into account. The net wealth tax is therefore deemed to be imposed on the person of the taxpayer, while the property tax often deemed to be imposed on an object - the property itself".In Harvard Law School World Tax Series - Taxation in Columbia - Net Wealth Tax is defined at page 451a general rule, all debts owed by taxpayers whether to residents or to non-residents, are deductible if their existence is established in conformity with the legal requirements. The usual test of deductibility, as applied by the Division of National Taxes, is whether or not there is an actual, enforceable legal obligation, the amount of which is fixed or computable as on 31 December of the tax year".According to Harvard Law School World Tax Series - Taxation in Sweden - this tax has been levied in Sweden since a long time. Now it is regulated by law enacted in 1947, "Taxable Wealth" has been defined at page 625 aswealth consists of the capital value of the taxpayers assets, as those are defined in the law, to the extent that this value exceeds the capital value of his debts.In Harvard Law School World Tax Series - Taxation in the Federal Republic of Germany - it is stated at page 152 that "the taxes on capital which are summarised in this chapter are the net worth tax, the real property tax, and the capital levy under the Equalization of Burdens Law". It is further statedof the taxes on capital are deemed to be imposed on the person of the taxpayers while other are deemed to be imposed on an object. Examples of the former are the net worth tax and the capital levy under the Equalization of Burdens Law, while the real property tax and the trade tax on business capital are classified in the latter category. The main importance of this distinction is that taxes in the first group presuppose a taxpayer with independent legal existence, that is, an individual or a legal entity (juridical person), while in the case of taxes in the second group, the taxable object itself is deemed liable for the tax, in addition to its owner, so that the taxpayer can be a partnership association of the civil law, or other combination of persons without separate legal existence. Taxes of the first type give consideration to the taxpayers ability to pay, while those of the second type consider merely the value of the taxable object, such as the capital of a business, in the case of the trade tax on business capital, or the assessed value of real property, in the case of the real property tax".In our view the High Court was right in holding that the impugned Act was not a law with respect to entry 49 List II, or did not impose a tax mentioned in entry 49, List II. If that is so, then the legislation is valid either under entry 86, List I, read with entry 97, List I or entry 97 List I standing by itself.74. Although we have held that the impugned Act does not impose a tax mentioned in entry 49 List II, we would like to caution that in case the real effect of a Central Act, whether called a Wealth Tax Act or not, is to impose a tax mentioned in entry 49 List II the tax may be held as encroaching upon the domain of State legislatures.Although it is not necessary to decide the question whether the impugned Act falls within entry 86 List I read with entry 97 List I, or entry 97 List I alone, as some of our brethren are of the view that the original Wealth Tax Act fell under entry 86 List I, we might express our opinion on that point. It seems to us that there is a distinction between a true net wealth tax and a tax which can be levied under entry 86 List I. While legislating in respect of entry 86 List I it is not incumbent on Parliament to provide for deduction of debits in ascertaining the capital value of assets. Similarly, it is not incumbent on State Legislatures to provide for deduction of debits while legislating in respect of entry 49 List II. For example the State Legislature need not, while levying tax under entry 49 List II, provide for deduction of debits owed by the owner of the property. It seems to us that the other part of entry, i.e. "tax on the capital of companies." in entry 86 List I also seems to indicate that this entry is not strictly concerned with taxation of net wealth because capital of a company is in one sense a liability of the company and not its asset. Even if it is regarded as an asset, there is nothing in the entry to compel Parliament to provide for deduction of debits. It would also be noticed that entry 86. List I deals only with individuals and companies but net wealth tax can be levied not only on individuals but on other entities and associations also it is true that under entry 86 List I aggregation is necessary because it is a tax on the capital value of assets of an individual but it does not follow from this that Parliament is obliged to provide for deduction of debits in order to determine the capital value of assets of an individual or a company. Therefore, it seems to us that the whole of the impugned Act clearly falls within entry 97 List I. We may mention that this Court has never held that the original Wealth Tax Act fell under entry 86 List I. It was only assumed that the original Wealth Tax Act fell within entry 86 List I and on that assumption this entry was analysed and contrasted with entry 49 List II. Be that as it may, we are clearly of the opinion that no part of the impugned legislation falls within entry 86 List I.78. However, assuming that the Wealth Tax Act, as originally enacted, is held to be legislation under entry 86 List I, there is nothing in the Constitution to prevent Parliament from combining its powers under entry 86 List I with its powers under entry 97 List I. There is no principle that we know of which debars Parliament from relying on the powers under specified entries 1 to 96. List I and supplement them with the powers under entry 97 List I and Art 248, and for that matter powers under entries in the Concurrent List.It was contended that the case of residuary powers was different but we are unable to see any difference in principle. Residuary power is as much a power as the power conferred under Art. 246 of the Constitution in respect of a specified item.82. In in re the Regulation and Control of Aeronautics in Canada, 1932 AC 54   at p. 77 the Privy Council upheld the validity of a Parliamentary statute after supplementing the powers under the specified items in S.91 with the residuary powers. Itsum up, having regard (a) to the terms of S.132; (b) to the terms of the Convention which covers almost every conceivable matter relating to aerial navigation; and (c) to the fact that further legislative powers in relation to serial navigation reside in the Parliament of Canada by virtue of S.91, items 2, 5, and 7, it would appear that substantially the whole field of legislation in regard to aerial navigation belongs to the Dominion. There may be a small portion of the field which is not by virtue of specific words in the British North America Act vested in the Dominion; but neither is it vested by, specific words in the Provinces. As to that small portion it appears to the Board that it must necessarily belong to the Dominion under its power to make laws for the peace order and good government of Canada. Further their Lordships are influenced by the facts that the subject of aerial navigation and the fulfilment of Canadian obligations under S.132 are matters of national interest and importance; and that aerial navigation is a class of subject which has attained such dimensions as to affect the body politic of the Dominion.It is, therefore, difficult to escape from the conclusion that in India there is no field of legislation which has not been allotted either to Parliament or to the Statelegislatures. In Attorney-General for Ontario v. Attorney-General for Canada, 1947 AC 127   at p.150 Lord Jowitt, L.C., recalled the following words of Lord Loreburn, L.C., in Attorney-General for Ontario v. Attorney-General for Canada, 1912 AC 571   at p.581 and reiteratedthere can be no doubt that under this organic instrument the powers distributed between the Dominion on the one hand, and the provinces on the other hand, cover the whole area of self-government within the whole area of Canada. It would be subversive of the entire scheme and policy of the Act to assume that any point of internal self-Government was withheld from Canada".The last sentence applies much more to the Constitution of a sovereign democratic republic. Itis true that there are some limitations in Part III of the Constitution on the legislatures in India but they are of a different character. They have nothing to do with legislative competence. If this is the true scope of residuary powers of Parliament, then we are unable to see why we should not, when dealing with a Central Act, enquire whether it is legislation in respect of any matter in List II for this is the only field regarding which there is a prohibition against Parliament. If a Central Act does not enter or invade these prohibited fields there is no point in trying to decide as to under which entry or entries of List I or List III a Central Act would rightly fit in.40. It was accepted that this test had been applied in Canada, but it was argued that the Canadian Constitution is completely different from the Indian Constitution. It is true that the wording of Ss. 91 and 92 of the Canadian Constitution is different and the Judicial Committee has interpreted these sections differently at different periods, but whatever the interpretation, it has always held that the lists are exhaustive. The scheme of distribution of Legislative powers between the Dominion and the Provinces is essentially the same as under our Constitution.