Residuary Power

Three Lists of 7th Schedule provide

for elaborate distribution of powers.
But if a subject matter is not
enumerated in any of these lists, then
Article 248 and Entry 97 of List I
provide that that subject matter
law-making will be with the
Parliament.
Union of India v H.S. Dhillon AIR 1972
SC 1061
▪ Union of India v H.S. Dhillon AIR
1972 SC 1061
▪ Facts: Wealth Act was amended by
the Finance Act and definition of
net wealth included agricultural
land in assets for the purpose of
calculating tax on capital value of
the net wealth.
▪ Appeal against P&H High Court
▪ HC held that the impugned Act is
▪ Relevant Entries
Entry 86 of List I: Taxes on the
capital value of the assets,
exclusive of agricultural land, of
individuals and companies; taxes
on the capital of companies
Entry 49 of List II: Taxes on land
and buildings
▪ Argument of Union of India
1. the impugned act is not based
on the subject matter of any entry
of any List
 3. The words exclusive of agricultural
land in Entry 86 of List I could not cut
down the scope under Entry 97 of List I
▪ Respondents’ Argument
1. It was the scheme of the Constitution
to give States exclusive powers to
legislate in respect of agricultural land
2. The object and effect of specifically
excluding agricultural land from the
scope of Entry 86 also takes it out of
the ambit of Entry 97 of List I and
Article 248
▪ Two question before the SC-
▪ 1. whether the impugned act is a law
with respect to Entry 49 list II
▪ 2. is it beyond the legislative
competence of parliament?
▪ Court unanimously held that the
impugned Act did not come within
Entry 49 of List II. The tax under
entry 49 list II is not a personal law
but a tax on property whereas wealth
tax is a personal law.
▪ But by a majority of 4:3, held that it is
SC observed here that Parliament does not
have power by virtue of Entry 98 list I since
entry specifically exclude the agricultural
land but the exclusion of power of levying
tax on agricultural land does not curtail the
power of parliament under the Residuary
power.
Therefore, according to Article 248 r/w entry
97 list I, Parliament has power to levy tax on
capital value of asset on agricultural land.
▪ Parliament’s Power to make laws on the State List Subjects
▪ In the National Interest – Under Article 249
▪ During Emergency Parliament can make law in the State List
under Article 250
▪ With the consent of the State, when two or more States
request under Article 252
▪ Article 251 provides for the power of State Legislature to
continue with the law-making power, but if there is
repugnancy then Parliamentary Law will prevail over State
Law