Vol. 1 · pages 311–315

296 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES now the law on the point. Cases of conflict of legislation touching the Federal List and the Provincial List are not likely to occur often. But cases of conflict between the two are sure to arise in the concurrent field of legislation. The law as to that you will find in section 107. Sub-section ( 1) lays down when a Federal Law shall prevail over a Provincial Law. Sub-section ( 2) lays down as to when a Provincial Law shall prevail over the Federal Law. Reading the sub-sections together the position in law is this. As a rule a Federal Law shall prevail over a Provincial Law if the two are in conflict. But in cases where the Provincial Law, having been reserved for the consideration of the Governor-General or for the signification of His Majesty’s pleasure, has received the assent of the Governor-General or His Majesty, the Provincial Law shall prevail until the Federal Legislature enacts further legislation with respect to the same matter. With regard to the question of this distribution of powers of legislation every Federation is faced with a problem. That problem arises because there can be no guarantee that enumeration of the subjects of legislation is exhaustive and includes every possible subject of legislation. However complete and exhaustive the listing may be there is always the possibility of some subject remaining unenumerated. Every Federation has to provide for such a contingency and lay down to whom the powers to legislate regarding these residuary subjects shall belong. Should they be given to the Central Government or should they be given to the Units ? Hitherto there has been only one way of dealing with them. In some Federations, these residuary powers are given to the Central Government, as in Canada. In some Federations they are given to the Units, as in Australia. The Indian Federation has adopted a new way of dealing with them. In the Indian Federation they are neither assigned to the Central Government nor to the Provinces. They are in a way vested in the GovernorGeneral by virtue of section 104. When a Legislation is proposed on a subject which is not enumerated in any of the three lists it is the Governor-General, who is to decide whether the powers shall be exercised by the Federal Legislature or by the Provincial Legislature. (b) Executive Powers of the Federation The first question is, what is the extent of the executive powers of the Federation ? Is it co-extensive with the legislative powers ? In some of the Federations this was not made clear by statute. It was left to judicial decision. Such is the case in Canada. The Indian Constitution does not leave this matter to courts to decide. It is defined expressly in the Act itself. The relevant section is section 8( 1). It says that the executive authority of the Federation extends— ( a) to matters with respect to which the Federal Legislature has powers to make laws ; ( b) to raising in British India on behalf of His Majesty of naval, military and air forces and to the governance of His Majesty’s forces borne on the Indian establishment;

297 FEDERATION VERSUS FREEDOM ( c) to the exercise of such rights, authority and jurisdiction as are exercisable by His Majesty by treaty, grant, usage, sufference, or otherwise in and in relation to the tribal areas. There is no difficulty in following the provisions of this sub-section. There might perhaps be some difficulty in understanding sub-clause ( a). It says that the executive powers must be co-extensive with the legislative powers of the Federation. Now the legislative power of the Federation extends not only to the Federal List but also to the Concurrent List. Does the executive power of the Federation extend to subjects included in the Concurrent List ? Two points must be borne in mind before answering this question. First, the Concurrent List is also subject to the legislative authority of the Province. Second, according to section 49( 2) that the executive authority of each Province extends to the matters with respect to which the Legislature of the Province has power to make laws. The answer to the question whether the executive authority of the Federation extends also to the Concurrent list is that the Executive Authority in respect of the Concurrent List belongs to the Federal Government as well as to the Provincial Government. This is clear from the terms of section 126( 2). It belongs to Provincial Government except in so far as the Federal Legislature has covered the field. It belongs to the Federal Government except in so far as the Provincial Legislature has covered the field. The Concurrent List is not the only list which is subject to Legislation by the Federal Legislature. The Federal Legislature has the right to legislate even on Provincial subjects under Section 102 in cases of emergency and under Section 106 to give effect to international agreements. Does the Executive Authority of the Federation extend to such matters also ? The answer is that when a field is covered by Federal Legislation that field also becomes the field of Executive Authority of the Federation. (c) Administrative Powers of the Federation The Administrative Powers of the Federation follow upon the Executive Powers of the Federation just as the Executive Powers of the Federation follow upon the Legislative Powers of the Federation. To this there is one exception. That exception relates to the administration of subjects included in the Concurrent List. The Concurrent List is a list to which the Legislative Authority of the Federation extends by virtue of Section 100. As has already been pointed out the executive authority of the Federation extends in so far as Federal Legislation has covered the field. But the administrative powers for subjects falling in the Concurrent List do not belong to the Federation. They belong to the Provinces. (d) Financial Powers of the Federation The revenues of the Federal Government are derived from four different sources : (1) Revenue from Commercial Enterprise, (2) Revenue from

298 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES Sovereign Functions; (3) Revenue from Tributes ; and (4) Revenue from Taxes. Under the first head fall all revenues from Posts and Telegraphs. Federal Railways, banking profits and other commercial operations. Under the second head come revenues from currency and coinage, from bona vacantia and territories administered directly by the Federal Government. Under the third head are included Contributions and Tributes from the Indian States. The classification of Revenue from taxes follows upon the Powers of Taxation given to the Federal Government by the Constitution. The Powers of Taxation given to the Federal Government fall into three main categories. In the first category fall those powers of taxation which is wholly appropriable by the Federal Government. In the second category, fall those powers of taxation which are exercisable for raising revenue which is divisible between the Federal Government and the Provincial Governments. The heads of revenue which fall under the first category of Taxing Powers cover those which are specifically mentioned in the Federal List— 1. Duties of customs, including export duties. 2. Duties of excise on tobacco and other goods manufactured or produced in India except— ( a) alcoholic liquors for human consumption ; ( b) opium, Indian hemp and other narcotic drugs and narcotics, nonnarcotic drugs ; ( c) medical and toilet preparations containing alcoholic, or any substance included in sub-paragraph ( b) of this entry. 3. Corporation tax. 4. Salt. 5. State lotteries. 6. Taxes on income other than agricultural income. 7. Taxes on the capital value of the assets, exclusive of agricultural land of individuals and companies ; taxes, on the capital of companies. 8. Duties in respect of succession to property other than agricultural land. 9. The rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance proxies and receipts. 10. Terminal taxes on goods or passengers carried by railway or air ; taxes on railway fares and freights. 11. Fees in respect of any of the matters in this list but not including fees taken in any court. In connection with this, attention might be drawn to the following items in the Concurrent List : 1. Marriage and divorce. 2. Wills, intestacy and succession. 3. Transfer of Property and other agricultural lands.

299 FEDERATION VERSUS FREEDOM Being in the Concurrent list, the Federal Legislature has power to legislate upon with respect to these. Can the Federal Legislature also while legislating upon them raise revenue from them ? The Act does not seem to furnish any answer to this question. It may however be suggested that the rules contained in section 104 regarding the exercise of Residuary Powers will also apply here. The sources of revenue which are made divisible by the Constitution are : (1) Income Tax other than Corporation Tax and (2) Jute Export duty. Those which are made divisible according to the Federal Law are : (1) Duty on Salt, (2) Excise duty on Tobacco and other goods and (3) Duties of Export. In respect of the financial powers of the Federation there is one feature which by reason of its pecularity is deserving of attention. The Act in giving the Federal Government the right to tax, makes a distinction between power to levy the tax and the right to collect it and even where it gives the power to levy the tax it does not give it the right to collect it. This is so in the case of surcharge on Income tax and the Corporation tax. The Income tax is only leviable in the Provinces and not in the States although it is a tax for Federal purposes. The State subjects are liable to pay only a Federal surcharge on Income Tax because such a surcharge is leviable both within the Provinces as well as the States. But under section 138( 3) the Federal Government has no right to collect it within the States. The collection is left to the Ruler of the State. The Ruler, instead of collecting the surcharge from his subjects, may agree to pay the Federation a lump sum and the Federation is bound to accept the same. Similar is the case with regard to the Corporation tax. The Federation can levy it on State subjects but cannot collect it directly by its own agency. Section 139 provides that the collection of the Corporation tax shall as of right be the function of the Ruler. V CHARACTER OF THE FEDERATION (1) The Nature of the Union How does the Indian Federation compare with other Federations ? This is not only a natural inquiry but it is also a necessary inquiry. The method of comparison and contrast is the best way to understand the nature of a thing. This comparison can be instituted from points of view. There is no time for a comparison on so vast a scale. I must confine this comparison to some very moderate dimensions. Therefore I propose to raise only four questions : (1) Is this Federation a perpetual Union ? (2) What is the relationship of the Units to the Federal Government ? (3) What is the relationship of the Units as between themselves ? (4) What is the relationship of the people under the Units ? There is no doubt that the accession of the Indian States to the Federation is to be perpetual so long as the Federation created by the Act is in

300 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES existence. While the Federation exists there is no right to secede. But that is not the real question. The real question is, will the federation continue even when the Act is changed ? In other words the question is, is this a perpetual Union with no right to secede or, is this a mere alliance with a right to break away? In my opinion the Indian Federation is not a perpetual union and that the Indian States have a right to secede. In this respect the constitution of the United States and this Indian Federation stand in clear contrast. The constitution of the United States says nothing as to the right of secession. This omission was interpreted in two different ways. Some said that it was not granted because it was copy recognized. Others said it was not excluded because it was not negatived. It was this controversy over the question namely whether the right of secession was excluded because it was not recognized which led to the Civil War of 1861. The Civil War settled two important principles : (1) No State has a right to declare an Act of the Federal Government invalid ; (2) No State has a right to secede from the Union. In the Indian Federation it would be unnecessary to go to war for establishing the right to secession because the Constitution recognizes the right of the Indian States to secede from the Indian Federation if certain eventualities occur. What is a perpetual Union and what is only a compact is made nowhere so clear as by Blackstone in his analysis of the nature of the Union between England and Scotland. To use his language the Indian Federation is not an incorporate Union because in a Union the two contracting States are totally annihilated without any power of revival. The Indian Federation is an alliance between two contracting parties, the Crown and the Indian States, in which neither is annihilated but each reserves a right to original Status if a breach of condition occurs. The Constitution of the United States originated in a compact but resulted in a union. The Indian Federation originates in a compact and continues as a compact. That the Indian Federation has none of the marks of a Union but on the other hand it has all the marks of a compact is beyond dispute. The distinguishing marks of a Union were well described by Daniel Webster, when in one of his speeches on the American Constitution he said— “ ...The constitution speaks of that political system which is established as ‘the Government of the United States’. Is it not doing a strange violence to languages to call a league or a compact between sovereign powers a Government ? The Government of a State is that organisation in which political power resides”. “ ...The broad and clear difference between a government and a league or a compact is that a government is a body politic ; it has a will of its own ; and it possesses powers and faculties to execute its own purposes Every compact looks to some power to enforce its stipulations. Even in a compact between sovereign communities, there always exists this ultimate reference to a power to ensure its execution ; although in such