The main characteristic of a federal Constitution is the distribution of powers

between the Centre and the States.. The legislative powers are subject to the
scheme of
distribution of powers between the Union and State Legislatures (as provided in
three lists under the Constitution),
There are three Lists which provide for distribution of legislative powers (under
7th Schedule to the Constitution):
Union List (List I) - It contains 97 items and comprises of the subjects which are
of national importance and admit of uniform laws for the whole of the country.
Only the Union Parliament can legislate with respect to these matters e.g.
Defence, Foreign Affairs, Banking, Currency, Union Taxes, etc.

State List (List II) - It contains 66 items and comprises of subjects of local or
State interest and thus lie within the legislative competence of the State
Legislatures, viz. Public Order and Police, Health, Agriculture, Forests, etc.

Concurrent List (List III) - It contains 47 items, with respect to which; both
Union Parliament and the State Legislature have concurrent power of legislation It
is a
twilight zone', as for not so important matters, the States can take initiative,
while for the important matters, the Parliament can do so.

The Constitution makes a two-fold distribution of legislative powers:

With respect to territory.
With respect to subject matter of legislation, (i.e. three Lists).

[I] Territorial Legislative Jurisdiction [Art. 245]

No law made by the Parliament would be invalid on the ground that it would have
extra-territorial operation i.e. takes effect outside the territory of India.
Theory of Territorial Nexus
The doctrine of territorial nexus is deeply rooted in laws of India even before the
commencement of Constitution of India in 1950. The Government of India Act, 1935
(for the purpose of territorial jurisdiction), first recognized that the laws of
Union and States are enforceable in the territory of India and of State
respectively
although this simple generalization is subject to the exception of doctrine of
territorial nexus.In the post-Constitution era, Art. 245 have made doctrine of
territor-
ial nexus a part of scheme of distribution of legislative powers under the
Constitution. Art. 245(1) provides that a State legislature may make laws for the
territory
of that State.The State legislature cannot make extra territorial laws, except when
there is sufficient connection or nexus between the State and the object

If there is a sufficient nexus between the person sought to be charged and the
State seeking to tax him, the taxing statute would be upheld. But,the connection
must be
real and not illusory (i.e. it should be on the basis of a valid law) and the
liability sought to be imposed must be pertinent to that connection (i.e.law
selects some
fact which provide some connection with the State). Whether there is a sufficient
connection, is a question of fact and will be determined by the courts in each
case.

Extra-territorial Operation of Parliamentary Law

Art. 245(2) provides that no law made by the Parliament would be invalid on the
ground that it would have extra-territorial operation i.e. takes effect outside the

territory of India. In other words, Parliamentary law will cover persons and their
property anywhere in world, and the legislation may offend the rules of
international
law or may not be recognized by the foreign courts. Thus, if a citizen of India
goes to France and marries a French girl while his first wife is alive, he can be
prosecuted in India for bigamy.

Ashbury v. Ellis (1893 AC 339) and Croft v. Dunphy (1933 AC 156). In Electronics
Corpn., India v. C.I.T. (AIR 1989 SC 1707), the Supreme Court has held that law
having
extra-territorial operation can be banned by Parliament, but such law must have
nexus with something in India. The Court has observed that it isinconceivable that
a
law should be made by Parliament in India which has no relationship with anything
in India.