Summarize the following court judgment. ivil Appeal No. 2697 & 2698 of 1989. From the Judgment and Order dated 24.3.87 & 1.7.87 of the Andhra Pradesh High Court in Writ Petition No. 105 & 8737 of 1987. N.A. Palkhivala	 P.A.S. Rao	 D.N. Mishara	 Ranganatha Chari and Ms. Rubi Anand for the Petitioners. S.C. Manchanda	 Ms. A. Subhashini and B.B. Ahuja for the Respondents. These appeals by Special Leave are directed against the dismissal by the Andhra Pradesh High Court of Writ Petitions filed by the appellant. The appellant	 Messrs Electronics Corporation of India Limited	 entered into a memorandum of understanding with a Norwegian company at Paris. This was followed by an agree ment dated 2 May	 1986 executed at Hyderabad. Under that agreement the Norwegian company was to provide technical know how and technical services	 including facilities for the training of personnel	 to the appellant in connection with the manufacture of computers. The consideration for the technical know how and technical services was represented by Norwegian currency NOK 32 Millions equivalent to about Rs.575 lakhs. Eighty five per cent of the consideration was to be paid from credit provided by Norwegian authorities and the balance fifteen per cent was to be paid out of free foreign exchange made available by the State Bank of India	 London Branch. It is not in dispute that the agreement had received the careful consideration of the Reserve Bank of India and of the Central Government. The appellant approached the Income Tax Officer for the grant of a 'No Objection Certificate ' as contemplated under section 195(2) of the 997 Income Tax Act	 1961	 to enable it to remit the instalments due without any obligation to deduct any income tax at source	 but the request was denied. On 23 December	 1986 the appellant made an application to the Commissioner of Income Tax for a direction to the Income tax Officer	 but the Commissioner rejected the application. The Commissioner took the view that having regard to Section 9(1)(vii) and Section 195 of the Income Tax Act	 1961	 the payment constituted income which was deemed to accrue or arise in India and was liable to deduction of tax at source. The appellant filed a Writ Petition against the order of the Commissioner	 and assailed the constitutional validity of Section 9(1)(vii) of the Act. It was urged before the High Court that Parliament was not competent to enact Sec tion 9(1)(vii) of the Act inasmuch as the provision possess es as extra territorial operation without any nexus between the person sought to be taxed and the country seeking to tax. It was further contended that even after the introduc tion of Section 9(1)(vii) by the Finance Act of 1976 with effect from 1 June	 1976	 the requirement of a business connection of a foreign Company was required	 and the case was governed by CORBORANDUM CO. vs C.I.T.	 [1977] 108 I.T.R. 335. It was also urged that after the introduction of the Explanation by the Finance Act of 1977 with effect from 1 April	 1977 Section 9(1)(vii) creates an invidious discrimi nation among companies which had entered into a foreign collaboration agreement prior to 1 April	 1976 and those who have done so after that date	 and that therefore Article 14 was violated. The High Court repelled all the contentions of the appellant and dismissed the Writ Petition. A similar Writ Petition was filed by the appellant against an order of the Commissioner of Income tax declining to direct the grant of a 'No Objection Certificate	 in relation to disbursement made under a licence agreement with Messrs Control Data Indo Asia Company	 U.S.A.	 and the Writ Petition was dis missed by the High Court for the reasons which had found favour with it in the earlier case. It is contended by learned counsel for the appellant that section 9(1)(vii) of the Income Tax Act is ultra vires inasmuch as it enables the levy of income tax on the Norwegian company in the one case and the American company in the other in circumstances which appear to show that the statute operates extra territorially without the need for any nexus between anything done in India and the person sought to be taxed. section 9(1)(vii) declares: "9(1) The following incomes shall be deemed to accrue or 998 arise in India (i). . . . . . . . . . . . . . . . (vii) income by way of fees for technical services payable by (a) the Government; or (b) a person who is a resident	 except where the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India; or (c) a person who is a non resident	 where the fees are payable in respect of services uti lised in a business or profession carried on by such person in India or for the purposes of making or earning any 'income from any source in India; Explanation. For the purposes of this clause	 "fees for technical services" means any consideration (including any lump sum consideration) for the rendering of any managerial	 technical or consultancy services (including the provision of services of tech nical or other personnel) but does not include consideration for any construction	 assembly	 mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries". It seems that the Revenue is proceeding on the basis that the foreign company is liable to tax and that therefore the petitioner is obliged to deduct at source the tax pay able by the foreign company. We are informed that the serv ices are rendered by the foreign company in the nature of training abroad to personnel belonging to the appellant	 and that payment to the foreign company is also effected abroad. The Revenue rests its case on section 9(1)(vii)(b) of the Act	 and the question is whether on the terms in which the provi sion is couched it is ultra vires. Now it is perfectly clear that it is envisaged under our constitutional scheme that Parliament in India may make laws which operate 999 extra territorially. article 245(1) of the Constitution pre scribes the extent of laws made by Parliament. They may be made for the whole or any part of the territory of India. article 245(2) declares that no law made by Parliament shall be deemed to be invalid on the ground that it would have extra territorial operation. Therefore	 a Parliamentary statute having extra territorial operation cannot be ruled out from contemplation. The operation of the law can extend to persons	 things and acts outside the territory of India. The general principle	 flowing from the sovereignty of States	 is that laws made by one State can have no operation in another State. The apparent opposition between the two positions is reconciled by the statement found in British Columbia Electric Railway Company Limited vs The King	 "A legislature which passes a law having extra territorial operation may find that what it has enacted cannot be directly enforced	 but the Act is not invalid on that account	 and the courts of its country must enforce the law with the machinery available to them. " In other words	 while the enforcement of the law cannot be contemplated in a foreign State	 it can	 nonetheless	 be enforced by the courts of the enacting State to the degree that is permissible with the machinery available to them. They will not be regarded by such courts as invalid on the ground of such extra territoriality. But the question is whether a nexus with something in India is necessary. It seems to us that unless such nexus exists Parliament will have no competence to make the law. It will be noted that Article 245(1) empowers Parliament to enact law for the whole or any part of the territory of India. The provocation for the law must be found within India itself. Such a law may have extra territorial opera tion in order to subserve the object	 and that object must be related to something in India. It is inconceivable that a law should be made by Parliament in India which has no relationship with anything in India. The only question is then whether the ingredients in terms of the impugned provi sion indicate a nexus. The question is one of substantial importance	 specially as it concerns collaboration agree ments with foreign companies and other such arrangements for the better development of industry and commerce in India. In view of the great public importance of the question	 we think it desirable to refer these cases to a Constitution Bench	 and we do so order.

The appellant company entered into an agreement with a Norwegian Company under which the latter was to provide technical knowhow and technical services including facili ties for the training of personnel of the appellant company in connection with the manufacture of computers for a con sideration of NOK 32 Millions	 Norwegian Currency	 equiva lent to Rs.575 lakhs. The appellant company applied to the Income Tax Officer for 'No Objection Certificate ' under Section 195(2) of the Income Tax	 1961 in order to remit the instalments due under the agreement without deducting the tax at source but the same was refused. The application of the appellant company to the Commis sioner of Income Tax seeking a direction to the Income Tax Officer was also rejected on the ground that having regard to Sections 9(1)(vii) and 195 of the Income Tax Act	 1961 the payment to the foreign company constituted deemed accru al of Income in India and therefore the appellant was obliged to deduct at source the tax payable by the foreign company. A writ petition filed by the appellant against the order of the Commissioner and assailing the constitutional validity of Section 9(1)(vii) of the 995 Income tax Act	 1961 was dismissed by the High Court of Andhra Pradesh. A similar writ petition filed against the order of refusal of 'No Objection Certificate ' by the Com missioner of Income Tax in relation to disbursement made under an agreement with a U.S. Company was also dismissed by the High Court. Against the decision of the High Court appeals were filed in this Court challenging the vires of Section 9(1)(vii) of the Income Tax Act	 1961 contending that (i) it was extra territorial in operation	 and (ii) there was no nexus between anything done in India and the persons sought to be taxed. Referring the matter to a Constitution Bench	 HELD: 1. It is envisaged under our constitutional scheme that Parliament in India may make laws which operate extra territorially. Article 245(2) declares that no law made by Parliament shall be deemed to be invalid on the ground that it would have extra territorial operation. Therefore	 a Parliamentary statute having extra territorial operation cannot be ruled out from contemplation. The operation of the law can extend to persons	 things and acts outside the territory of India. The general principle	 flowing from the sovereignty of States	 is that laws made by one State can have no operation in another State. But while the enforce ment of the law cannot be contemplated in a foreign State	 it can	 nonetheless	 be enforced by the courts of the enact ing State to the degree that is permissible with the machin ery available to them. They will not be regarded by such courts as invalid on the ground of such extra territoriali ty. [998H	 999A B	 D] British Columbia Electric Railway Company Limited vs The King	 	 applied. But unless nexus exists Parliament will have no competence to make the law. Article 245(1) empowers Parlia ment to enact law for the whole or any part of the territory of India. The provocation for the law must be found within India itself. Such a law may have extra territorial opera tion in order to subserve the object	 and that object must be related to something in India. It is inconceivable that a law should be made by Parliament in India which has no relationship with anything in India. [999E F] 2.1 In view of the great public importance of the ques tion	 whether the ingredients of the impugned provision indicate a nexus 996 these cases are referred to a Constitution Bench. [999H] Corborandum Co. vs C.I.T.	 ; referred to.