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Doctrine of territorial Nexus by Mayurakshi Sarkar at Lexcliq

 Doctrine of territorial Nexus by Mayurakshi Sarkar at Lexcliq


Federalism is the division of power between the centre and each of the states. It is a very complicated system, but the very reason a federal state is set up is to divide power between the union and the centre. In the constitution, they have a lot of power, but it's divided up so that they can keep their own power over the executive and legislative bodies. As our constitution has a federal structure, it sets up two separate governments for the federal government and the states. They are given the power of the sovereign, which they are supposed to use in a way that the Constitution says they should. Our constitution is the law of the land, and it explains the basic idea of federalism, which is the division of powers. This is why our constitution is so important.

Meaning of Doctrine of Territorial Nexus

As stated in the Indian constitution's article 245:

  • Extraterritorial actions or legislation affecting the entire country are beyond Parliament's purview.

  • For the whole or any section of the state, state legislators have the authority to make laws and regulations.

  • There are two distinct jurisdictions for making laws in this country—the federal government as well as the state government.

Distribution of the legislative powers with respect to the Territory

According to Article 245(1) of the Indian Constitution, the parliament has the authority to establish legislation for the entire country or for a specific area. Legislation passed by Parliament may not be nullified because it has no effect outside of India because Parliament also possesses extra-territorial authority. The Top Court ruled in A.H. Wadia v. Income Tax Commissioner that a challenge to the legitimacy of a law passed by the supreme legislative authority cannot be brought because of concerns about its extraterritoriality. Whether it does or does not conform with international law or has practical difficulties while enforcing it is up to the national or domestic tribunal to decide.

Theory of Territorial Nexus

It is necessary to establish a link between an object and a state in order for an extraterritorial law to take effect. The state legislature has the power to enact legislation only inside its own borders. As long as there is a connection between the thing in question and the state, the state can legislate for extraterritorial operations.

Wallace Bros and Co. Ltd v The Commissioner of Income - When it comes to the current instance, an Indian-registered and incorporated corporation was used as a "sleeping partner." During that fiscal year, the company turned a tidy profit. The respondent's company was the target of an income tax levy from the government. The respondent argued against the tax authority, but the privy council found that the idea of territorial linkage existed and upheld the tax. Apparently, British India provided the bulk of that revenue, which allowed for the establishment of a physical link between the two countries.


Therefore, the central and state governments have been given equal authority to enact legislation. Federalism is a complicated system, yet the division of power between the union and the centre is the very reason for the establishment of a federal state. The constitution divides their jurisdiction between the executive and legislative branches so that they retain their independence.


We have a dual polity in our constitution because it is federal in structure. Legislation can be made for some or all of India, and Parliament has been given a mandate to establish laws for extra-territorial operations. the extraterritorial operations, however, cannot be addressed by state legislatures since they lack the necessary expertise. It's possible for the state legislature to legislate for the extra territorial purposes if there's enough of a linkage between the object and its location. It implies that the object is situated outside the state's borders, but nonetheless has a relationship to the state's territory. Territorial nexus has a broad application and is not limited to India. According to the theory of territorial nexus, the reach of the law extends beyond the national borders of a country.



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