This article is written by Neelam Kumar Jain (Membership No. 079031), B.Com (Accounts-Gold Medalist), FCA, DISA.

Introduction

“The law is a profession of words.”1 By means of words contracts are created, statutes are enacted, and constitutions come into existence. Yet, in spite of all good intentions, the meanings of the words found in documents are not always clear and unequivocal. They may be capable of being understood in more ways than one, they may be doubtful or uncertain, and they may lend themselves to various interpretations by different individuals. When differences in understanding are irresolvable, the parties having an interest in what is meant may end up in litigation and ask the court to come up with its interpretation. In the eyes of the law, when this kind of situation arises, the contract or the legislative act contains “ambiguity”.2

It appears that the past history regarding interpretation of the expressions ‘State’ and ‘Union territory’ under various enactments told the aforesaid same story. The manner in which the definitions and meaning of the aforesaid expressions are provided in some of the statutes while others left undefined or partially defined led considerable ambiguity, interpretation problem and made these entities mixed up. This article elaborately discussed these issues and draw attention to the need of suitable amendment in the definitions of the expressions “State” and “Union territory” under various laws including Constitution of India, 1950 (in short ‘the Constitution’) to avoid the persistent disputes related to meaning of the said expressions.

Meaning of “State” under  various  Acts

At the outset it would be pertinent to know the definitions of the expressions “State” and “Union territory” under various laws.

Section 2(103) of the Central Goods and Services Tax Act, 2017 (In short ‘the CGST Act’) define the word ‘State’ as  “State” includes a Union territory with Legislature.

The aforesaid same definition also applicable to the Integrated Goods and Services Tax Act, 2017 (in short ‘the IGST Act’) by virtue of its Section 2(24) and the Union Territory Goods and Services Tax Act, 2017 (In short ‘the UTGST Act’) by virtue of its Section 2(10).

 It is well-settled that the word ‘includes’ is often used in interpretation clause in order to enlarge the meaning of the words or phrases occurring in the body of the statute and that when it is so used, these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import but also things which the interpretation clause declares that they shall include.3   

The CGST Act has not defined as to what is the meaning of the word “State” instead it simply say that ‘State” includes a Union territory with Legislature. The Act is a Central Act. Section 3 of the General Clauses Act, 1897 (in short ‘the GC Act’)  says that in the GC Act and in all Central Acts and Regulations made after the commencement of that Act, unless there is anything repugnant to the subject or context, the general definitions given therein would be applicable. 

Section 3(58) the GC Act defines the term ‘State’ (omitting the clause (a) not relevant here) as follows:

“(58)   “State”—

(a)   …………….; and

(b)   as respects any period after such commencement, shall mean a State specified in Schedule 1 to the Constitution and shall include a Union territory.”

It may be noted that the definition of the ‘State’ given in Section 3(58) of the GC Act could not be applied in GST laws as it conflict with the definition of the ‘State’ given in Section 2(103) of the CGST Act and produce a different intention.

Meaning of  “Union territory” under  various  enactments

As per Section 2(114) of the CGST Act -“Union territory” means the territory of—

(a)   the Andaman and Nicobar Islands;

(b)   Lakshadweep;

(c)   Dadra and Nagar Haveli and Daman and Diu;

(d)   Ladakh;

(e)   Chandigarh; and

(f)   other territory.

Explanation.—For the purposes of this Act, each of the territories specified in sub-clauses (a) to (f) shall be considered to be a separate Union territory;

The aforesaid same definition of the term ‘Union territory’ is given in the UTGST Act and same also applicable to the IGST Act by virtue of its Section 2(24).

Section 3(62A) of the GC Act define the term “Union Territory” mean any Union Territory specified in Schedule 1 to the Constitution and shall include any other territory comprised within the territory of India but not specified in that Schedule.

As per Article 366(30) of the Constitution of India, 1950 (in short ‘the Constitution’) “Union territory” means any Union territory specified in the First Schedule and includes any other territory comprised within the territory of India but not specified in that Schedule.

Presently 8 Union territories are specified in the First Schedule to the Constitution. Name of such union territories are as follows:

1. Delhi  2. The Andaman and Nicobar Islands  3. Lakshadweep  4. Dadra and Nagar Haveli and  Daman and Diu  5. Puducherry  6. Chandigarh  7. Jammu and Kashmir (in short ‘J&K’)  8. Ladakh

Out of the aforesaid eight Union territories only five Union territories has been covered in the definition of “Union territory“ given in Section 2(114) of the CGST Act. The reason is cleared that the remaining three Union territories have their own legislature. Hence for the purpose of the CGST Act these are treated as ‘State’ by virtue of Section 2(103) of the CGST Act.

It is pertinent to note that the UTs of Puducherry, J&K and Delhi are different from the other UTs. Article 239A and 239AA of the Constitution allow these UTs to have their own legislatures and pass their own laws. These Articles of the Constitution give status of partial statehood to these Union territories. 

Brief Distinct features of ‘State’ and ‘Union territory’

It may be noted that the “State” and the “Union territory” are the creations of the Constitution. Therefore to understand the meaning of the said terms, it would be useful to know some basic features of the ‘State’ and ‘Union territory’ under the Constitution. These features are highlighted in the table given below:

Brief history of the “Union Territories”

Before analysis and discuss the meaning of the terms ‘State’ and “Union Territories“, it would be pertinent to know the history of the territories which presently called the “Union Territories”.

Before Constitutional of India came into existence, these Union territories were called Chief Commissioner’s Provinces. Section 94 of the Government of India Act, 1935 talked about the area covered within the Chief Commissioner’s Provinces and provides that these areas were to be administered by the Governor-General, acting through a Chief Commissioner.

In the year 1947, during the initial stages of the drafting of the Constitution, a Committee was set-up to analysis and report on the fundamental changes required in the administrative framework existing in the Chief Commissioner’s provinces. The Constituent Assembly after considering the recommendations of the Committee, created a separate category called Part C States, which included three Chief Commissioner’s Provinces – Delhi, Ajmer and Coorg and some erstwhile Indian States namely Himachal Pradesh, Bhopal, Bilaspur, Cooch-Bihar, Kutch, Tripura, Manipur and Vindhya Pradesh. It was provided that these Part C States would be administered by the President, acting to such extent as he thought fit, through a Chief Commissioner or a Lieutenant Governor. Accordingly, Articles 239 and 240 were inserted in the final draft of the Constitution.

Thus under the Constitution of India initially the States were divided into Part A States, Part B States, Part C States and the territories in Part D. The First Schedule to the Constitution provided details of the States falling within each of these categories. Part VIII of the Constitution comprising Articles 239 to 242 dealt with Part C States.  Article 240 provided that Parliament could, by law, create a legislature or a Council of Ministers or both for Part C State.  In exercise of its powers under Article 240 (as it then stood), Parliament enacted the Government of Part C States Act, 1951 under which provisions were made in certain Part C States for a Council of Ministers to aid and advise the Chief Commissioner and also for a legislature. 

In 1955, the State Reorganisation Commission after studying the working of the Part C States submitted his report and expressed the view that Part C States were neither financially viable nor functionally efficient, and recommended that each of them should either be merged with the neighbouring States or made a centrally administered territory.

On the recommendations of the Commission, the States Reorganisation Act, 1956 and the Constitution (7th Amendment) Act, 1956 were passed. The four categories of States that existed prior to these Acts were reduced to two categories. The first categories called `States. The second category comprised the areas which had earlier been included in Part C and Part D states. These areas were called “Union Territories”. Some additions and deletions were made to these categories. The 7th Amendment Act also replaced Articles 239 & 240 by new provisions. The new Article 240 which still continues today, allowed the President to make regulations for certain Union Territories. Article 242 & 243 of the Constitution was also repealed by the 7th Amendment Act.

Subsequently (i) Dadra & Nagar Haveli  (ii) Goa, Daman & Diu  (iii)  Pondicherry and (iv) Chandigarh became Union Territory through various Constitution Amendment and other Acts.

The Constitution (14th Amendment) Act, 1962 replaced the old Article 240 as Article 239A, enabling Parliament to create a Legislature and/or a Council of Ministers for Himachal Pradesh, Manipur, Tripura, Goa, Daman and Diu and Pondicherry.  Pursuant to Article 239A, Parliament enacted the GUT Act. This Act applied only to those Union territories as were referred to in Article 239A. It did not apply to Delhi. This Act provided for creation of Legislative Assemblies for the Union territories mentioned in Article 239A and the extent of their legislative power. 

Thereafter Himachal Pradesh, Manipur, Tripura, Arunachal Pradesh, Mizoram, Goa etc. gradually ceased to be a Union Territories and became States by virtue of various State and Reorganisation Acts. The Laccadive, Minicoy and Amindivi Island (Alteration of Names) Act, 1973 changed the name of these Island to `Lakshadweep’ but it continued to remain a Union Territory.

Thereafter through the constitution (Sixth-Ninth Amendment) Act, 1991, Articles 239AA and 239AB, which are special provisions in relation to Delhi, were inserted w.e.f. 1-2-1992. Pursuant to the article, the Parliament enacted the GNCTD Act.They provide that Delhi, which is to be called the National Capital Territory of Delhi, is to have a Legislative Assembly. Subsequently name of Union territory “Pondicherry” was changed to “Puducherry” by the Pondicherry (Alteration of Name) Act, 2006, w.e.f. 1-10-2006.

On 05.08.2019, the President of India in exercise of his powers under clause (1) of Article 370 of the Constitution has issued the Constitution (Application to Jammu and Kashmir) Order, 2019 which supersede with immediate effect the Constitution (Application to Jammu and Kashmir) Order, 1954 as amended from time to time. Consequently the Article 35A stands abrogated and the Jammu and Kashmir Reorganisation Act, 2019 was passed w.e.f. 31st October, 2019 which abolished the state of Jammu and Kashmir and created two new Union Territories namely-Union Territory of J&K with Legislature and Union Territory of Ladakh without Legislature.

W.e.f. 26th January, 2020 the Union territory of ‘Dadra and Nagar Haveli’ and ‘Daman and Diu’ was merged by the Dadra and Nagar Haveli and Daman and Diu (Merger of Union territories) Act, 2019.

Now as per present position, the Union Territories can be divided into three categories:

1. Union Territories without legislature – comprising Andaman & Nicobar, Lakshadweep, Dadar & Nagar Haveli and Daman & Diu,  Chandigarh and Ladakh.
2. Union Territories for which legislatures can be created by Parliament by law under Article 239A – This category covered Union territories of Puducherry and J&K.
3. Union Territories which have legislatures created by the Constitution (Articles 239AA and 239AB) – This category covered Union Territory of Delhi.

Ambiguity regarding meaning of the expression ‘State’ in the Constitution

The expression “State” was not defined in the Constitution till 15-09-2016. The Constitution (One Hundred and First Amendment) Act, 2016 inserted Clauses (26B) to Article 366 which defined the expression “State” as follow:

“(26B) “State” with reference to articles 246A, 268, 269, 269A and 279A includes a Union territory with Legislature;”  

It appears that the aforesaid definition itself is not complete and only in the nature of a clarification. Clause (1) to Article 367 provide that unless the context otherwise requires, the General Clauses Act, 1897, shall, subject to any adaptations and modifications that may be made therein under article 372, apply for the interpretation of this Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India. In such a situation we have to take resort the provision of GC Act to find out the definition of the expression “State”. Section 3(58) of the GC Act define the expression ‘State’ (after omitting irrelevant portions) as respects any period after the commencement of the Constitution (7th Amendment) Act, 1956 ‘shall mean a State specified in the First Schedule to the Constitution and shall include a ‘Union territory’. But this inclusive definition is repugnant to the definition of ‘State’ given in the Article 366(26B) of the Constitution. This inclusive definition is also repugnant to the subject and context of Article 246 which distribute legislative power between Parliament and the Legislatures of the States. Exclusive power to make laws for the State or any part thereof with respect to any of the matters enumerated in the State List (List II to 7th Schedule of the Constitution) is assigned to the Legislatures of the State. There is no distribution of legislative power with respect to Union territories except to the extent provided in Article 246A. That is why Parliament is given power by Article 246 (4) to legislate even with respect to matters emumerated in the State List. If the inclusive definition of ‘State‘ in Section 3(58) of the General Clauses Act is applied to Article 246(4), then Parliament would have no power to legislate for the Union territories with respect to matters covered in the State List. Consequently, no Legislature would be created under Article 239A of the Constitution for the Union territories.

Analysis of some important judgments

Analysis of some important case laws is given below in tabular form:

In view of the aforesaid analysis it is clear that various courts have divergent views on this issue. Some Courts have opinioned that in view of Article 367 of the Constitution, the GC Act applies for interpretation of the Constitution as it stood on 26th January, 1950, when the Constitution came into force, subject only to any adaptations and modifications that made therein under Article 372. Whereas some judicial pronounces favour the applicability of the new definition of “State” u/s 3(58) of the GC Act which includes Union Territories unless the context otherwise requires.

Other relevant case laws

• The Code of Civil Procedure, 1908 (in short ‘the CPC’) is a Central Act which received the assent of the Governor-General on the 21st  day of March, 1908 and came into force on the 1st day of January, 1909. Therefore, the provisions of the GC Act, in view of its Section 4/4A, have to be applied in the interpretation of the CPC. “Ministers of States”, falling in item (ix) in Section 133(1) of the CPC, would, according to Section 3(58) of the GC Act, include the Chief Minister of Pondicherry, a Union territory. Therefore, the petitioner could claim exemption under Section 133 of the CPC.14 
• Legislature may use a word in the same statute in several different senses. In that view of the matter, the expression as defined in the interpretation clause would not necessarily carry the same meaning through the statute.15
• A conjoint reading of articles 245, 246 and 247 of the Constitution per se reveals that power of Parliament as well as of State Legislature, as per these articles, is “subject to the provision of the Constitution” and any law made, if it is in conflict with or in violation of any provision of the Constitution, then to that extent it may be held to be ultra vires. 16 
• The entries in the lists of the 7th Schedule to the Constitution is not a power given to the Legislature but are merely legislative heads. The Legislature derives its power under Article 246 and other related articles in the Constitution. The language of an entry should be given the widest meaning fairly capable to meet the need of the Government envisaged by the Constitution. Each general word should extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended within it. When the vires of an enactment is impugned, there is an initial presumption of its constitutionality. If there exists any difficulty in ascertaining the limits of the legislative power, it must be resolved, as far as possible, in favour of the Legislature, putting the most liberal construction on the legislative entry so that it is intra vires. The allocation of the subjects of the entries in the respective lists is not done by way of scientific or logical definitions but it is a mere enumeration of broad and comprehensive categories. 17

Other considerable points

1. It may be noted that the Article 12 of the Constitution also uses the term “the State” in extended form as an independent Sovereign country including its instrumentalities or local or other authorities. However this extended meaning is restricted in its operation, to Part III and to Part IV by reason of Article 36 but it does not applicable to the other provisions of the Constitution.  Whereas we are discussing here the expression ‘State‘ as referred to an entity described in the First Schedule to the Constitution.
2. Section of 13 of the  Jammu And Kashmir Reorganisation Act, 2019 provide that the provisions contained in article 239A, which are applicable to “Union territory of Puducherry”, shall also apply to the “Union territory of J&K”.
3. Where a term has not been defined in a particular Central Act, one has to turn to its definition as given in the General Clauses Act of 1897, the purpose of which Act is, as per its Preamble, of avoid superfluity of language in statutes wherever it is possible to do so, and to place in one single statute provisions as regards interpretation of words and legal principles which would otherwise have to be specified separately in many different Acts and Regulations. Whatever the General Clauses Act says, whether as regards meanings of words, or as regards legal principles, has to be read into every statute to which it applies, provided the statute does not contain anything repugnant to them in its subject or context, or does not produce a different intention.18 It may be noted that repugnancy specified here is not the same as contemplated under Article 254 of the Constitution.
4. The question of repugnancy under Article 254 of the Constitution arises when the provisions of both laws as made by the Legislature of a State and the Parliament are fully inconsistent or are absolutely irreconcilable or it is impossible without disturbing the other to apply to a given set of facts, when both the statutes covering the same field comprised in List III (Concurrent List).19

Conclusion

In view of aforesaid discussion it is clear that though the Union Territories are centrally administered under the provisions of Article 239 of the Constitution, they do not merged with the Union Government. In other words they have their separate existence as an entity and not form part of State.

It is also worthy to point out that the Article 1(3) of the Constitution specifically provide  that the Territories of India shall comprise (a) Territories of the States and (b) the Union Territories. Similarly Explanation I to Article 3 provide that for the purpose of clauses (a) to (e) of the said Article, “State” includes a Union territory. Further Article 80, 330(2), 341(1), 342(1), 358, 359(1A) etc. separately mention the expression ‘Union territory’ with the expression ‘State’ in the Article itself.  All these provisions show that the Union Territories are not included in the States unless specifically mentioned therein or the context otherwise requires. 

It is also important to note down that the provisions of Part VI of the Constitution deals with States do not apply to Union Territory.  In contra Part VIII provides for administration of Union Territories. It also indicates that the Union Territory is not a State. 

After the aforesaid analysis and in view of the definition of ‘State’ in clause (26B) to Article 366 it can be  concluded that the expression ‘State’ in the Constitution means the State mentioned in the First Schedule to the Constitution which do not include Union territories. However this conclusion itself is not absolute. In other words the said conclusion can not be correct in each and every case. 

It may be noted that all definitions in interpretation clause are normally provided subject to the general qualification such as Article 366 start with the qualification clause “unless the context otherwise requires”. Thus the very concept of interpretation clause connotes that the words have to be construed in the context in which they are used. They derive colour from their context.

However what is context in a given case also depend on the fact and circumstances of the case and changes over time. So it is also difficult and ambiguous to identify the relevant context. The circumstances under which a law is enacted may changed due to fast developing socio-economic conditions, which also require a statute to be interpreted differently. Since various Union territories are in different stages of growth and development. Some have already acquired the status of ‘State’. Some are on the way to it and may be changed to ‘State’ in near future. Thus in consonance with present level of statehood, it is essential to make suitable changes in the old definitions and the relevant provisions of the various laws and the Constitution so as to remove the long standing ambiguity. 

References

1. This is the opening sentence in David Mellinkoff’s monumental work, The Language of the Law, Little, Brown & Co., Boston: 1963
2. Sanford Schane-A research Professor of Linguistics, University of California, San Diego. B.A. Wayne State University
3. Case of CIT v. Taj Mahal Hotel [1971] 82 ITR 44 (SC) 
4. Abbreviation of the Government of National Capital Territory of Delhi Act, 1991
5. Abbreviation of the Government of Union Territories Act, 1963
6. Case of Samsher Singh & Anr v. State of Punjab, 1975 (1) SCR 814; (1974) 2 SCC 832; AIR 1974 SC 2192 
7. Reported in [1966] 1 S.C.R. 430 [Constitution Bench]
8. Reported in AIR 1997 SC 2847 : (1997) 1 JT 40 : (1996) 9 SCALE 613 : (1997) 7 SCC 339 : (1996) 10 SCR 472 Supp
9. Reported in [1968] 2 S.C.R. 103
10. Case of Okram Kullo Singh v. Election Commissioner, AIR 1968 Mani 84
11. Reported in AIR 1969 Delhi 246
12. Reported in [1970] 3 S.C.R. 881
13. Reported in [1971] 2 S.C.R. 197
14. Case of M.A.H. Farook vs Kalikrishna Dass (1974) 2 MLJ 46 (Madras High Court)
15. Case of Dr. Nalini Mahajan v. Director of Income-tax [2002] 122 Taxman 897 (Delhi)
16. Case of D.K. Abdul Khader v. Union of India, ILR 2001 KAR 1809, 2001 (2) KarLJ 534
17. Case of T.M.A. Pai Foundation v. State of Karnataka [2002] 8 SCC 481
18. Case of Chief Inspector of Mines v. K.C. Thapar, AIR 1961 SC 838; 1962 SCR (1) 9
19. Case of  K.T. Plantation Pvt. Ltd. v. State of Karnataka, AIR 2011 SC 3430, (2011) 9 SCC
    

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