territorial nexus

Article 245(1) limits State laws to the territory of the State, while Article 245(2) provides that no law made by Parliament is invalid merely because it has extra-territorial operation. A State law that affects persons, things or activities outside the State is still valid if there is a sufficient territorial connection between the object of the law and the State.

The nexus must be real, not illusory, and the liability imposed must be relevant to that connection. In State of Bombay v. R.M.D. Chamarbaugwala, a prize competition run from Mysore but circulated and entered in Bombay had a sufficient nexus with Bombay to be taxed there. The doctrine was earlier applied by the Privy Council in Wallace Brothers v. CIT (1948).

Example

Because the prize competition was widely played within the State, there was a sufficient territorial nexus to support the State's tax.

In Indian law

• Article 245, Constitution of India
• State of Bombay v. R.M.D. Chamarbaugwala, 1957 INSC 34: a real territorial connection supports a State law with extra-territorial effect

See also

pith and substance · federalism · colourable legislation

Read more in the study notes

• Centre-State legislative relations (Constitutional Law II)
• Presumptions in statutory interpretation (Interpretation of Statutes and Principles of Legislation)