Double Aspect Theory — A Canadian Tree on Indian Soil

By Ashish Kumar Singh

Abstract

In this article I examine how a Canadian doctrine, which had been developed to decide controversies in the Canadian Constitutional scheme pertaining to distribution of legislative powers, has consolidated its position in the Indian Constitutional setup. In this article I attempt to show how the incorrect usage of the ‘Aspect Theory[1]’ [or the ‘Double Aspect Theory’] has permitted the Parliamentary overlap into taxing entries reserved for the State. I show this by evidencing that the Double Aspect Theory which evolved through the Judicial Committee of the Privy Council and the Supreme Court of Canada, to deal with the problems arising out of the distribution of legislative powers under S.91 and S.92 of the British North America Act, 1867 (hereinafter ‘The BNA Act’), by itself does not merit application in the Indian Constitutional scheme, which by itself has sufficient firepower in its arsenal to deal with the problems that otherwise frequently arise in Canadian Constitutional scheme.

Introduction

The first flight of the Double Aspect Theory landed on Indian soil through the decision in Federation of Hotel & Restaurant Association of India v. Union of India[2] wherein the Apex Court upheld the validity of Expenditure Tax and held that the impugned tax is on the expenditure aspect of the transaction, hence not covered under Entry 62[3] of List-II of the Seventh schedule of the Constitution of India, 1950 (hereinafter ‘COI’). Parliament was held competent to levy Expenditure Tax under Entry 97[4] of List-I. It is submitted that the doctrine of Double Aspect Theory was judicially evolved by the Canadian Supreme Court to allow concurrent operation of Dominion[5] and Provincial[6] statutes. It is also submitted that this doctrine was developed by the Canadian Supreme Court to resolve the conflict between the Dominion and Provincial statutes and such conflict arises frequently due to the broad and generally worded entries in the BNA Act. It is submitted that there is no place for this doctrine in the Indian constitutional scheme as the constitutional problems for which this doctrine was evolved, can be easily resolved under the India constitutional apparatus as under Articles 246 and 254. Furthermore, it is asseverated that in cases of conflict between the statutes, the doctrine of ‘Pith and Substance’ must be applied. In this article I attempt to buttress the above submissions in light of Canadian and Indian Case Laws.

Distribution of Legislative Powers in the Canadian Constitution

At the heart of Canada’s constitutional design is its federal nature. The preamble to the Constitution Act, 1867 announces the colonies’ “desire to be federally united into one Dominion”. The Privy Council put it in a classic formulation:

”The object of the Act was neither to weld the provinces into one, nor to subordinate provincial governments to a central authority, but to create a federal government in which they should all be represented, entrusted with the exclusive administration of affairs in which they had a common interest, each province retaining its independence and autonomy.” [7]

Although the creation of the federation requires the division of legislative powers, yet the distribution of legislative powers between the federal parliament and the provincial legislatures has been always a contentious issue. Since the commencement of the BNA Act, the Canadian courts have become the battle ground wherein both the Federal and Provincial governments have zealously guarded their legislative powers. The appropriate division of sovereign power, and the validity of particular statutes passed by parliament and the Provincial legislatures, are thus hotly contested issues with high stakes. The stakes are even higher because of the enormous difficulty in amending the Canadian constitution. Therefore, it is the Canadian courts which are modifying the legal regime by their judicial interpretation. The Canadian Supreme Court also has to evolve different numbers of doctrines which helps in adapting the constitutional texts to new societal conditions.

The BNA act has distributed the powers and responsibilities by making a two list of categories and classes — one list for the federal parliament (primarily S.91 of the BNA Act)and the other one for the Provincial Legislatures (primarily S.92 of the BNA Act). The opening paragraph of S.91 vests the federal parliament with the power to make law for, peace, order and good Government of Canada (hereinafter POGG) and matters not enumerated in the provincial list (i.e., the residuary power lies with the Federal Parliament, unlike American and Australian Constitution) and matters enumerated in the federal list. S.92 vests power in the Provincial legislatures to make law related to matters, enumerated in the provincial list, and of a local or private nature in the provinces. The concluding paragraph of section 91 also specifies that the matters falling under the Federal list shall not be deemed as matter of a local or private nature. S.95 provides for the concurrent jurisdiction in matters relating to Agriculture and Immigration.

Although the federal and provincial categories of power are expressed yet they are expressed in quite general terms. The power conferring provisions are drafted in open-ended language. For example S. 91(1A) provides for “The Public Debt and Property”, S.91 (26) provides for “Marriage and Divorce”, S.92 (13) provides for “Property and Civil Rights in the Province” and S.92 (16) provides for “Generally all Matters of a merely local or private Nature in the Province”. Due to the nature of entries in S.91 and S.92, the Canadian Supreme Court has had a hard time defining the limits of the law making powers of Canadian legislative bodies. This generality nevertheless provides flexibility in constitutional interpretation, but it also brings much overlapping and potential conflict between the various definitions of powers and responsibilities. For example, overlapping often happens between S. 91(21) and S.92(11) which provides for “Bankruptcy and Insolvency” and “The incorporation of Companies with Provincial objects” respectively. Another relevant example is that of S.91(26) and S.92(12) which provide for “Marriage and Divorce” and “The Solemnization of Marriages in the province” respectively. To understand the relation between the S.91 and S.92 it is germane to quote the words of Lord Justice Viscount Haldane in John Deere Plow Company Ltd. v. Wharton [8]. His lordship held:

“…. It is necessary to realize the relation to each other of ss. 91 and 92 and the character of the expressions used in them. The language of these sections and of the various heads which they contain obviously cannot be construed as having been intended to embody the exact disjunctions of a perfect logical scheme.”

Since 1867, there are numerous occasions when the Federal Parliament and the Provincial legislatures, in developing policies and programs, have stepped on each others’ jurisdictional toes. Moreover, the advent of new technologies and societal progress, have led to the emergence of new areas of government involvement that were not contemplated in 1867, or that did not fit surely in either of the two lists. Therefore, in interpreting the BNA Act, the Canadian courts are continually assessing the competing federal and provinces lists of powers against one another.

Since the birth of the federation up to the mid-twentieth century, the Privy Council tried to limits the overlap of powers between the two orders of government. They have used the nautical image of “watertight compartments” to illustrate the need to protect the autonomy of each order of government and balance its powers[9]. The aforesaid style of interpretation is called ‘dualistic approach’ or ‘principle of exclusive powers’ by scholars of Canadian Constitutional Law. The Judicial Committee began to show more openness, beginning in 1930s, to an evolving or flexible interpretation of the Constitution, but the tendency remained more or less in the line of above approach. Under the dualistic approach, the Privy Council applied the principle of ‘mutual modification’ and the doctrine of ‘Pith and Substance’ in a strict sense. The aforesaid interpretation attracted criticisms for being overly centralizing, or overly decentralizing, or for stifling the democratic expression of local or national sovereignty. In recent decades, the Supreme Court of Canada has responded to these concerns by favouring a “modern” or “co-operative” approach to federalism that interprets both federal and provincial legislative powers generously, and tolerates a high degree of overlap and interplay between them[10]. This openness to overlapping is called ‘co-operative approach’ by scholars. The adoption of this ‘co-operative approach’ has led to an increase in the number of overlaps between equally valid Federal and Provincial statutes. This approach augments the number of areas in which each order of government can intervene and afford equal protection for their autonomy. In pursuit of this ‘co-operative approach’, the Canadian Supreme Court has applied different doctrines such as the ‘Incidental Effects Rule’ [a stricter, more traditional version of the ‘Pith and Substance’ test], ‘Double Aspect doctrine’ and ‘Ancillary powers doctrine’ [these two doctrines are more relaxed, modern versions of the ‘Pith and Substance’ test]. The courts employ the ‘Pith and Substance’, double aspect and ancillary powers rule under the ‘co-operative approach’ to interpret the meaning of exclusivity in a weaker manner: exclusivity means the exclusive ability to pass laws that deal predominantly with a subject matter allocated to the enacting Legislature’s jurisdiction. I deal with these doctrines later in detail. Apart from the aforementioned doctrines and principles, the Canadian Supreme Court also applied doctrines of ‘Interjurisdictional Immunity’ and principle of ‘Federal Supremacy’.

The Pith & Substance Doctrine in Canada[11]

The ‘Pith and Substance’ doctrine is founded on the recognition that it is in practice impossible for a legislature to exercise its jurisdiction over a matter effectively without incidentally affecting matters within the jurisdiction of another level of government. The phrase ‘Pith and Substance’ was first used by Lord Watson in Union Colliery Co. of British Columbia Ltd. v. Bryden[12]. This doctrine was beautifully expounded by Lord Justice Atkin in Gallagher v. Lynn[13], wherein his lordship held:

“It is well established that you are to look at the ‘true nature and character of the legislation’, Russell v. The Queen[14], ‘the ‘Pith and Substance’ of the legislation’. If, on the view of the statute as a whole, you find that the substance of the legislation is within the express powers, then it is not invalidated if incidentally, it affects matters which are outside the authorized field. The legislation must not under the guise of dealing with one matter in fact encroach upon the forbidden field. Nor are you to look only at the object of the legislator. An Act may have a perfectly lawful object, e.g., to promote the health of the inhabitants, but may seek to achieve that object by invalid methods, e.g., a direct prohibition on of any trade with a foreign country. In other words, you may certainly consider the clauses of an Act to see whether they are passed ‘in respect of’ the forbidden subject. In the present case any suggestion of an indirect attack upon trade is disclaimed by the appellant. There could be no foundation for it. The true nature and character of the Act, its ‘Pith and Substance’, is that it is an Act to protect the health of the inhabitants of Northern Ireland; and in those circumstances, though it may incidentally affect trade with County Donegal, it is not passed ‘in respect of’ trade, and is therefore not subject to attack on that ground.” (Emphasis supplied is mine)

This doctrine is used to determine the validity of the impugned legislation, involves an examination of the true nature or essential character of the impugned legislation. This involves identifying the dominant or most important characteristics of the challenged law. This analysis consists of an inquiry into the true nature of the law in question for the purpose of identifying the matter to which it essentially relates. If the ‘Pith and Substance’ of the impugned legislation can be related to a matter that falls within the jurisdiction of the legislature that enacted it, the courts will declare it intra vires. If, however, the legislation can more properly be said to relate to a matter that is outside the jurisdiction of that legislature, it will be held to be invalid owing to the violation of the division of powers.

As any legislation rarely has one aspect to it, the dominant feature or aspect is taken as the ‘Pith and Substance’ of the legislation, other aspect or aspects are then considered to be incidental. In other words, identifying the “in a relation to a matter coming within” to which it essentially applies, using the terminology of the introductory lines of S.91 and S.92. It is important to note that due to the vaguely worded nature of the entries in S.91 and S.92, it is difficult to attach the impugned legislation to a specific area of jurisdiction. As a result, except in cases of highly specific powers, the ‘Pith and Substance’ of a statute will be less general than that of the power itself.

Many scholars of Canadian constitutional law have considered the Incidental Effects Rule, the Double Aspect Doctrine and Ancillary Powers Rule under the head of the ‘Pith and Substance’ doctrine. They have considered these doctrines to be part of the ‘Pith and Substance’ doctrine. I will also submit my analysis on their line and consider these doctrines under the head of the ‘Pith and Substance’ doctrine.

1. Incidental Effects Rule

Under this doctrine, the Supreme Court of Canada has recognized that the Federal Parliament and Provincial legislatures can incidentally affect the power of the other levels of government when legislating in their own areas of jurisdiction[15]. In other words, if the ‘Pith and Substance’ of a law is within the jurisdiction of legislating entity then the courts will not take into account the law’s incidental effects on the powers of the other level of government. As I have explained above, the dominant feature or aspect of the challenged law is taken to be the ‘Pith and Substance’, and the other aspect or aspects are considered to be incidental. It is submitted that the above doctrine can be equated with Indian ‘Pith and Substance’ doctrine, as both allow only the incidental encroachment by the impugned law into each other jurisdiction if the ‘Pith and Substance’ of the impugned law looked at as a whole pertains to a entry or matter that falls in the jurisdiction of the enacting entity.

2. Ancillary Powers Doctrine

Under this doctrine, the Canadian Supreme Court upheld the constitutional validity of a particular provision that overlapped with a matter falling under the jurisdiction of the other order of the government, when they were integrated into an otherwise valid legislative whole[16]. In Quebec (Attorney General) v. Lacombe[17], the Canadian Supreme Court through Chief justice McMachlin held that:

“32. The ancillary powers doctrine may be briefly described. Recognizing that a degree of jurisdictional overlap is inevitable in our constitutional order, the law accepts the validity of measures that lie outside a legislature’s competence, if these measures constitute an integral part of a legislative scheme that comes within provincial jurisdiction: General Motors of Canada Ltd. v. City National Leasing, [1989] 1 S.C.R. 641, at pp. 668–70.

xxxx xxxx xxxx xxxx

35. The ancillary powers doctrine permits one level of government to trench on the jurisdiction of the other in order to enact a comprehensive regulatory scheme. In pith and substance, provisions enacted pursuant to the ancillary powers doctrine fall outside the enumerated powers of their enacting body: General Motors, at pp. 667‑70. Consequently, the invocation of ancillary powers runs contrary to the notion that Parliament and the legislatures have sole authority to legislate within the jurisdiction allocated to them by the Constitution Act, 1867. Because of this, the availability of ancillary powers is limited to situations in which the intrusion on the powers of the other level of government is justified by the important role that the extra jurisdictional provision plays in a valid legislative scheme.” (Emphasis supplied is mine)

In other words, even though the ‘Pith and Substance’ of a provision falls outside or exceeds the jurisdiction of enacting entity, its constitutionality is preserved because of the link between the provision and the valid legislative whole of which it forms a part. In such cases the Canadian Supreme Court has maintained a balance between the exclusivity principle and the legislatures’ basic authority to pass legislation under a valid head of power. The courts have done so by the way of devloping the “necessarily incidental test” wherein it is checked whether the challenged law is incidental to the overall scheme, and necessary for the valid legislation to be effective. It ensures that the incursion upon the jurisdiction of the other will be limited only to those instances that are absolutely necessary to give effect to an otherwise valid law.

It is submitted that for the engagement of this doctrine, there must be a particular provision that in ‘Pith and Substance’ falls in the jurisdiction of the other order of government. This necessarily means that the overlap is not merely incidental but substantial or serious, otherwise the impugned legislation must pass through the test of the Incidental Effects Rule. It has been held in many Canadian cases that mere incidental effects do not warrant the invocation of ancillary powers.

It is submitted that the above doctrine is totally incompatible with our Constitutional scheme as Indian Courts do not, look at each and every impugned provision and try to find its ‘Pith and Substance’ independent of the statute. It is not required to find out the ‘Pith and Substance’ of a provision. To determine the repugnancy[18] and competency of an impugned legislation, its ‘Pith and Substance’ with respect to statute as a whole must be found out. The expression “with respect to” in Article 246 of the COI precluded Indian courts from ‘looking through’ the statute section or provision wise; rather it mandates that impugned legislation must be ‘look[ed] at’ as a whole. The impugned provision must be looked at in the context of the whole statute. Furthermore, if the encroachment is not incidental then the impugned law will fail the test under the Indian ‘Pith and Substance’ doctrine, for dealing with a matter which does not fall in the jurisdiction of the legislating entity and will thus, be declared ultra vires under Article 246 of the COI.

3. Double Aspect Theory

In Hodge v. The Queen[19], the Judicial Committee of the Privy Council was asked to decide, whether an Act passed by the Provincial Legislature of Ontario, known as “The Liquor License Act of 1877”, was within the powers of the Provincial Legislature. The Privy Council held that subjects which in one aspect and for the purpose fall within Section 92 of the BNA Act may in another aspect and for another purpose fall within Section 91. The Privy Council held:

“It appears to their lordships that Russell v. The Queen[20] when properly understood is not an authority in support of the appellant’s contention, and their lordships do not intend to vary or depart from the reasons expressed for their judgment in that case. The principle which that case and the case of the Citizens’ Insurance Company illustrate is, that subjects which in one aspect and for one purpose fall within sec.92, may in another aspect and for another purpose fall within sec.91.” (Emphasis supplied is mine)

It simply says that the challenged law can display several features, some one of which at least fall within a Federal class of laws, and others, which falls within the Provincial class of laws. For instance a law providing for the suspension or revocation of the driver’s right to drive a car upon a highway when found inebriated, has provincial aspects, of control of highways as local works under S.92(10)[21] and of the right to drive as a civil right in the province under S.92(13)[22]. The law herein has a federal aspect of criminal law under S.91(27)[23] too, reflecting the federal responsibility to prohibit ‘anti-social conduct’[24]. Another example is that of naked dancing in a bar, where the Court found that nude dancing has a double aspect, one Federal (the criminal aspect) and the other Provincial (the regulation of entertainments in association with liquor permits)[25]. The excerpt produced above, by Lord Fitzgerald was misconstrued as the genesis of the doctrine of Aspect Theory, as it is a general statement that can be made for any challenged law. In federalism there is no sharp distinction between the legislative powers, therefore it is common that overlap takes place between the Federal statute and Provincial statute. It is rare that the impugned legislation has just one aspect to it. Therefore, it is common for any challenged law to have aspects both in Federal and Provincial lists, but it does not mean that the impugned law is related to both the matters where one comes within S.91 and the other within S.92. It is submitted that generally laws do not have a double aspect; once its ‘Pith and Substance’ is determined, it either comes under or does not come under the jurisdiction of the level of government that passed it[26].

It is submitted that this doctrine has been applied in cases where the matter at hand has both Federal and Provincial aspects but both the aspects are of equal importance and there is no sharp contrast between the relative importance of the Federal and provincial characteristics of that matter. The courts invoke this doctrine when they are not able to identify the dominant character of the impugned legislation. In other words, this doctrine is exercised when the ‘Pith and Substance’ of the assailed law falls within both the jurisdiction of the Dominion and the Provinces, and there is difficulty in allocating the impugned legislation to either the Federal or Provincial List. According to Constitutional law scholar Katherine E. Swinton (as she then was, and later judge of the Superior Court of Justice for Toronto), by invoking the Double Aspect Doctrine, the courts have negated the possibility of ‘watertight compartments’ or exclusivity of legislative powers. She points out that this doctrine has been invoked to regulate a certain activity and to justify it under both jurisdictions. Courts, in the pursuit of this doctrine, have upheld legislation made by both orders of government on the same subject matter[27]. This doctrine has allowed and justified regulation of a certain activity by both the Federal and Provincial legislatures.

In Canadian Western Bank v. Alberta[28], the Canadian Supreme Court held that if the ‘Pith and Substance’ of the impugned legislation falls within the jurisdiction of the enacting legislature then the incidental effects it have on the statute of other order of the government will not render it unconstitutional as it is impossible to exercise its jurisdiction without incidentally affecting the matters coming under the jurisdiction of other government. The Court thereupon went to say that there are matters which are difficult to be placed under single head of power and held:

“Also, some matters are by their very nature impossible to categorize under a single head of power: they may have both provincial and federal aspects. Thus the fact that a matter may for one purpose and in one aspect fall within federal jurisdiction does not mean that it cannot, for another purpose and in another aspect, fall within provincial competence: Hodge v. The Queen (1883), 9 App. Cas. 117 (P.C.), at p. 130; Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749 (“Bell Canada (1988)”), at p. 765. The double aspect doctrine, as it is known, which applies in the course of a ‘Pith and Substance’ analysis, ensures that the policies of the elected legislators of both levels of government are respected. A classic example is that of dangerous driving: Parliament may make laws in relation to the “public order” aspect, and provincial legislatures in relation to its “Property and Civil Rights in the Province” aspect (O’Grady v. Sparling, [1960] S.C.R. 804). The double aspect doctrine recognizes that both Parliament and the provincial legislatures can adopt valid legislation on a single subject depending on the perspective from which the legislation is considered, that is, depending on the various “aspects” of the “matter” in question.” (Emphasis supplied is mine)

In the leading case of Multiple Access Ltd. v. McCutcheon[29] on the Double Aspect Doctrine, wherein the Canadian Supreme Court was asked to decide on the vires of the S.113 and S.114 of the Ontario Securities Act which provides for a prohibition on insider trading, as an identical provision was given in the Canada Corporation Act enacted by the Federal legislature, the court held that Federal and Provincial aspects of the challenged law are of equal importance so that neither can be ignored and the impugned law can be enacted by either the Federal parliament and Provincial legislatures. The Court through Justice Dickson held:

“I incline to the view that the impugned insider trading provisions have both a securities law and a companies law aspect and would adopt as the test for applying the double aspect doctrine to validate both sets of legislative provisions, that formulated by Professor Lederman:

But if the contrast between the relative importance of the two features is not so sharp, what then? Here we come upon the double-aspect theory of interpretation, which constitutes the second way in which the courts have dealt with inevitably overlapping categories. When the court considers that the federal and provincial features of the challenged rule are of roughly equivalent importance so that neither should be ignored respecting the division of legislative powers, the decision is made that the challenged rule could be enacted by either the federal Parliament or provincial legislature. In the language of the Privy Council, “subjects which in one aspect and for one purpose fall within sect. 92, may in another aspect and for another purpose fall within sect. 91”.(“Classification of Laws and the British North America Act” in The Courts and the Canadian Constitution (1964), 177, at p. 193).

The double aspect doctrine is applicable, as Professor Lederman says, when the contrast between the relative importance of the two features is not so sharp. When, as here, the corporate-security federal and provincial characteristics of the insider trading legislation are roughly equal in importance there would seem little reason, when considering validity, to kill one and let the other live.” (Emphasis supplied is mine)

Prof. Peter W. Hogg in his treatise Constitutional law of Canada, the most cited book in the decisions of the Supreme Court of Canada, observed:

“When the courts find that the federal and provincial characteristics of a law are roughly equal in importance, then the conclusion is that laws of that kind may be enacted by either the Parliament or the legislature.”

From the analysis of the above cases, it can be seen that the Double aspect doctrine is applied to allow both the Federal Parliament and Provincial legislatures to enact the same rule, completely opposite to the context in which it has been applied in Indian tax cases. It is submitted that this doctrine has been applied qua statutes in Canada but the Indian Courts have applied this doctrine qua indivisible transactions, contracts and activities for levying Union and State taxes[30]. It is also submitted that there is no Canadian case law where this doctrine has been applied to levy taxes on the different aspects of a transaction. Therefore, before blindly applying, it is required that the context and conditions under which it has been applied in Canadian Constitutional scheme must be understood.

Canadian Constitutional law scholars such as Prof. Peter W. Hogg have advocated for the restricted use of this doctrine as it is against the principle of exclusivity and allows overlaps between the Federal and Provincial laws. He said that the use of this doctrine is of course, judicial restraint. Similar view on judicial restraint in applying double aspect doctrine was echoed by Lord Justice Viscount Haldane in Attorney-General for Canada v. Attorney-General for Alberta[31], wherein his Lordship said that this doctrine “is now well established, but none the less ought to be applied only with great caution”. The reason for such caution was given in Bell Canada v. Quebec[32], wherein it was held that the frequent use of this doctrine on these broadly and vaguely worded entries might lead to a situation where exclusive powers under S.91 and S.92 coalesce into single concurrent field. In this case, learned Justice Jean Beetz at Para 37 held:

“the reason for this caution is the extremely broad wording of the exclusive legislative powers listed in ss.91 and 92 of the Constitution Act, 1867 and the risk that these two fields of exclusive powers will be combined into a single more or less concurrent field of powers governed solely by the rule of paramountcy of federal legislation. Nothing can be more directly contrary to the principle of federalism underlying the Canadian Constitution: see Laskin’s Canadian Constitutional Law (5th ed. 1986), vol. 1, at p. 525.”

Furthermore, to avoid such situation, learned Justice at Para 38 held:

“….. the double aspect theory can only be invoked when it gives effect to the rule of exclusive fields of jurisdiction. As its name indicates, it can only be applied in clear cases where the multiplicity of aspects is real and not merely nominal.”

The aforementioned excerpt shows that the Court tried to stem the tide of overlapping between the statutes under the ‘co-operative approach’ by limiting its application to the situation wherein aspects are real, not nominal. The Court tried to limit the application of this doctrine as it was going against the federative principles, for it allowed excessive overlapping.

It is important to take note of the limited number of entries given in the Federal and Provincial lists. The degree of detailing present in S.91 and S.92 is much less compared to the Seventh Schedule of COI, thus, many subjects such as aviation, highways, game and lotteries etc. are not mentioned in either of the lists. Broadly worded entries coupled with the procedural complexity in amending the Canadian constitution makes it difficult for addition of subjects in either of the lists. The BNA Act does not grant either order of the government legal jurisdiction over things, but only legislative authority over matters coming within the enumerated subjects. For example “Automobile” is not neither a matter nor an enumerated subject, so there is nothing which precludes either order of the government from legislating in respect of automobiles. The Provincial government will treat automobiles under the province’s power of property and civil rights. The Federal Parliament will treat the criminal aspect of the automobiles under Federal legislature power over criminal law. Hence, under the ‘co-operative approach’, this doctrine has been frequently used with subjects or matters that were not specifically allocated by the Canadian constitution[33]. It is submitted that such situation will never arise in our Constitution scheme as the absolute residuary powers have been given to the Union Parliament under Article 248 read with Entry 97 of List-I. Moreover the Government of the India Act, 1935, of which significant number of provisions are present in our present constitution, is the first attempt to enumerate the legislative powers as exhaustively as possible. Thus, absolute residuary powers coupled with the exhaustively enumerated entries in the Seventh Schedule of COI are sufficient to take care of such a problem that frequently arises in Canadian Constitutional setup.

It is constructive, although at the cost of repetition to summarize the differences between these doctrines. Differences between these doctrines were beautifully expounded in Quebec (Attorney General) v. Lacombe[34] wherein it was held:

“36. The ancillary powers doctrine is not to be confused with the incidental effects rule. The ancillary powers doctrine applies where, as here, a provision is, in pith and substance, outside the competence of its enacting body. The potentially invalid provision will be saved where it is an important part of a broader legislative scheme that is within the competence of the enacting body. The incidental effects rule, by contrast, applies when a provision, in pith and substance, lies within the competence of the enacting body but touches on a subject assigned to the other level of government. It holds that such a provision will not be invalid merely because it has an incidental effect on a legislative competence that falls beyond the jurisdiction of its enacting body. Mere incidental effects will not warrant the invocation of ancillary powers.

37. Nor is the ancillary powers doctrine to be confused with the double aspect doctrine. In Canadian Western Bank, at para. 30, Binnie and Le Bel JJ. explained that the double aspect doctrine recognizes the overlapping jurisdiction of the two levels of government: “. . . some matters are by their very nature impossible to categorize under a single head of power: they may have both provincial and federal aspects. Thus, the fact that a matter may for one purpose and in one aspect fall within federal jurisdiction does not mean that it cannot, for another purpose and in another aspect, fall within provincial competence . . . .” By contrast, ancillary powers apply only where a legislative provision does not come within those heads of power assigned to its enacting body under the Constitution Act, 1867.

38. In summary, only the ancillary powers doctrine concerns legislation that, in pith and substance, falls outside the jurisdiction of its enacting body. Laws raising a double aspect come within the jurisdiction of their enacting body, but intrude on the jurisdiction of the other level of government because of the overlap in the constitutional division of powers. Similarly, the incidental effects rule applies where the main thrust of the law comes within the jurisdiction of its enacting body, but the law has subsidiary effects that cannot come within the jurisdiction of that body.” (Emphasis supplied is mine)

Incompatibility of the Double Aspect Theory With the Indian Constitutional Scheme

It is submitted that the only the Incidental Effects Rule is applicable to the Indian Constitutional setup as it is equivalent to Indian ‘Pith and Substance’ doctrine wherein only incidental encroachment is allowed if the ‘Pith and Substance’ of the statute looked at as a whole pertains to a entry that falls in the jurisdiction of the enacting entity. The Double Aspect Theory is inconsistent with our legal setup as this doctrine applies the doctrine of ‘Pith and Substance’ in a relaxed manner and allows overlapping of statutes. Indian Supreme Court has always applied the doctrine of ‘Pith and Substance’ strictly; it has never allowed a law to be intra vires if its relaxed ‘Pith and Substance’ falls within both the Union List and the state list. If such a situation has arisen, the Supreme Court has struck down such law for being void under Article 246(1). For any impugned law to be intra vires it is necessary that it passes the strict test of ‘Pith and Substance’ and must fall in the jurisdiction of the enacting entity, otherwise it will be declared void under Article 246. It does not matter whether the challenged law has double aspects or many more aspects; it must pass the test of ‘Pith and Substance’ or be declared ultra vires under Article 246. It is also submitted that maintaining exclusivity between legislative powers is an important facet of Indian federalism. The introduction of the GST Council in the Indian constitutional scheme has dynamically altered the nature of levy of taxation, even though there in no taxing entry in the Concurrent list by itself. Apart from legacy tax issues, the nature of non-taxation legislation must still be put to test and for the same, maintaining such legislative exclusivity is essential.

It is also important to note that, the reason, why these different kinds of interpretative doctrines are needed to be judicially evolved by the Canadian Supreme Court in the first place stem from the absence of Concurrent list and the broad and vaguely worded entries under S.91 and S.92 in addition to the proclivity of the Canadian courts towards the ‘co-operative approach’ otherwise the Privy Council had always applied the doctrine of ‘Pith and Substance’ to maintain exclusivity. Double Aspect Doctrine was judicially developed for the concurrent operation of Federal and provincial legislation. It is a doctrine specially developed to recognize concurrent matters or fields in the absence of specific constitutional sanction for the same. The Indian Constitution has provided List-III wherein matters have been enumerated on which either order of government has the legitimate power to legislate. List-III has taken care of the problems that arise with the absence of concurrent list under the Canadian Constitution. If a State Legislature enacts a law which has both Federal and State aspects, it will have to pass strict test of ‘Pith and Substance’ and will be validated only if its ‘Pith and Substance’ falls under any entry in List-III. Even if the law passed by the state legislature, falls under any entry in List-III, it must not be a law under the entry for which there is an existing Union law, otherwise the state law will be repugnant to Union law under Article 254(1). Article 254 is provided in the COI to maintain uniformity of law across states, except for the situations mentioned under Article 254(2). Therefore there is no need to apply The Double Aspect Doctrine in allowing concurrent operation of laws enacted by both the Federal Parliament and the State legislatures for being already provided under Article 246(2), subject to the Passing of strict ‘Pith and Substance’ test and not being in conflict with the Federal law[35]. There is also no need to allow both orders of government to enact laws on same subject matter under this doctrine for it will be completely antithetical to our constitutional scheme as no part of Part XI of COI allows the concurrent operation of Union and State laws on same subject matter [as it would be an infraction of doctrine of occupied field[36]].

Furthermore, it is important to note that Canadian Supreme Court has more or less followed a two steps process to resolve the conflict between the statutes. According to Prof. Hogg the first step is to examine the validity or competency of the impugned legislation by identifying its subject matter or ‘Pith and Substance’. The second step, which in the view of Prof. Hogg is a little more than a mere formality, is to determine which order of the government has the power to enact the impugned legislation. The Supreme Court of India has held in many cases that in case of a conflict, the doctrine of ‘Pith and Substance’ must be applied to find out, whether, between the entries assigned to different legislatures, the particular subject of the legislation falls within the ambit of the one or the other[37]. It is submitted that both the Canadian and India approaches are more or less same, but problems arise in Canada due to broad and sparse worded entries which makes it difficult for Canadian courts to determine the ‘Pith and Substance’ of the impugned legislation. As a result, except in cases of highly specific powers, the ‘Pith and Substance’ of a statute will be less general than that of the power itself. In such cases, the courts find the ‘Pith and Substance’[the relaxed version of it, otherwise courts have under strict ‘Pith and Substance’ test, no matter how difficult it is, identified the subject matter under the specific head of the legislative power] of the matter at hand in jurisdictions of both the orders of government. Thereupon, they allow the concurrent operation of the Federal and Provincial laws on the same subject matter. It is submitted that such situation will not arise in the Indian Constitutional framework because the degree of detailing present in the Seventh schedule of the COI is much more than that of S.91 and S.91 of the BNA Act. Therefore, it has no t been and will not be difficult for the Indian courts to ascertain the ‘Pith and Substance’ of the impugned legislation under a specific head of power.

It is under the ‘co-operative approach’ of federalism that Canadian Supreme Court has relaxed the strict test of ‘Pith and Substance’ which was applied by the Privy Council to maintain the exclusivity of legislative powers, and allows the overlapping of Federal and Provincial statutes. It is submitted that the rigors of ‘Pith and Substance’ doctrine have not been relaxed in India. It is submitted that the Indian ‘Pith and Substance’ is consistent with our constitutional scheme as a strict hierarchy of legislative powers has been maintained under Article 246 and we cannot allow it to be diluted by the application of this doctrine.

Conclusion

In the end I want to submit humbly that the Indian Supreme court, with due respect, has wrongly applied the double aspect doctrine to justify the overlapping of levy of Union and State law on an indivisible transaction and commercial activity as the overlapping of taxes is not allowed in our constitutional scheme[38]. It is also humbly submitted that the Double aspect doctrine has been applied without appreciating the differences between our constitutional scheme and the Canadian Constitutional scheme. It is indeed unfortunate that Indian Courts have not embarked on a serious study of this doctrine and examined its true position and place in our constitutional scheme.

Citations

[1] The word ‘Aspect’ and ‘Double Aspect’ are used interchangeably by the Canadian Supreme Court.

[2] 1989 3 SCC 634

[3] 62. “Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling”.

[4] 97. “Any other matter not enumerated in List-II or List-III including any tax not mentioned in either of those Lists”.

[5] The words ‘Dominion’, ‘Union’ and ‘Federal’ are used interchangeably in this article.

[6] The words ‘Provincial’ and ‘state’ are used interchangeably in this article.

[7] Liquidators of the Maritime Bank of Canada v. Receiver-General of the New Brunswick,[1892] A.C. 437

[8] 1915 A.C. 330

[9] A.G. for Canada v. A.G. for Ontario,[1937] A.C. 326, wherein Lord Atkin observed that “While the ship of state now sails on larger ventures and into foreign waters she still retains the watertight compartments which are an essential part of her original structure.”

[10] Eugene Brouillet and Bruce Ryder, Key Doctrines in Canadian Legal Federalism (oxford university press, 2017)

[11] It is necessary to mention that Canadian Pith and Substance doctrine is different from the Indian Pith and Substance doctrine. Doctrine of Pith and Substance has been applied in a relaxed manner in Canada, whereas in India it has been applied strictly.

[12] [1899] A.C. 580

[13] [1937] A.C. 863

[14] [1882] A.C. 829

[15] General Motors of Canada v. City National leasing, [1989] 2 SCR 641; Attorney General (Que.) v. Kellogg’s of Canada et Al., [1978] 2 SCR 211, wherein the Canadian Supreme Court held that the Quebec’s Consumer Protection Act was valid even though it incidentally affected the area of television, an exclusive Federal subject.

[16] General Motors of Canada v. City National leasing, [1989] 1 SCR 641; Quebec (Attorney General) v. Lacombe, [2010] 2 SCR 453

[17] Supra note 16

[18] Concept of repugnancy under Article 254 relating to List-III is different from repugnancy arising due to overlapping in List-I and List-II in which case principle of ‘Pith and Substance’ is applied to determine legislative competency, see Tata sky Limited v. state of Punjab and another (CWP №10922 of 2010); Hoechst Pharmaceuticals Ltd. V. The State of Bihar, [1983] AIR 1019; Vijay kumar Sharma v. The State of Karnataka, [2007] AIR 2072

[19] [1883] 9 A.C. 117

[20] Supra note 14

[21] 10. Local Works and Undertakings other than such as are of the following Classes:

a. Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province:

b. Lines of Steam Ships between the Province and any British or Foreign Country:

c. Such Works as, although wholly situate within the Province, are before or after their Execution declared by the Parliament of Canada to be for the general Advantage of Canada or for the Advantage of Two or more of the Provinces.

[22] 13. Property and Civil Rights in the Province

[23] 27. The Criminal Law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters.

[24] Provincial Secretary of P.E.I. v. Egan and A.G. of P.E.I., [1941] SCR 398

[25] Rio Hotel Ltd. v. New Brunswick (Liquor licensing Board), [1987] 2 SCR 59

[26] Supra note 10

[27] British Columbia (Attorney General) v. Lafarge Canada Inc., [2007] 2 SCR 86

[28] [2007] 2 SCR 3

[29] [1982] 2 SCR 161

[30] Federation of Hotel & Restaurant Association of India v. Union of India (Supra) ; Bharti Telemedia Ltd. v. Government of NCT of Delhi (W.P.© no. 2194 of 2010); All India Federation of Tax Practitioners & Ors. v. Union of India & Ors. (Civil Appeal no. 7128 of 2001); Tata sky Limited v. state of Punjab and another (Supra)

[31] [1916] 1 A.C. 588

[32] [1988] 1 SCR 749

[33] O Grady v. Sparling, [1960] SCR 804; Law Society of British Columbia v. Mangat, [2001] 3 SCR 113; Siemens v. Manitoba (Attorney General), [2003] 1 SCR 21

[34] Supra note 16

[35] Offshore Holdings Pvt. Ltd. v. Bangalore Development Authority & Ors., [2011] 8 SC 708

[36] Hoechst Pharmaceuticals Ltd. v. State of Bihar, [1983] 4 SCC 45, also see; Swamigal Medical and Educational Trust v. State of Tamil Nadu,[1996] 3 SCC 15

[37] State of West Bengal v. Kesoram Industries Ltd, [2004] 10 SCC 201,

[38] Godfrey Phillips (I) Ltd. v. State of U.P. [2005] 139 STC 537

References

1. W.R.Lederman, THE CONCURRENT OPERATION OF FEDERAL AND PROVINCIAL LAWS IN CANADA (McGILL LAW JOURNAL, Vol.9 №3, 1963)

2. Eugene Brouillet and Bruce Ryder, key Doctrines in Canadian Legal Federalism (The Oxford Handbook of the Canadian Constitution, 2017)

3. Eugene Brouillet, The Supreme Court of Canada: The concept of Cooperative Federalism and its Effects on the Balance of Power (Courts in Federal countries, University of Toronto press, 2017)

4. Asher Honickman, WATERTIGHT COMPARTMENTS: GETTING BACK TO THE CONSTITUTIONAL DIVISION OF POWERS (ALBERTA LAW REVIEW, 2017)

5. An article on https://www.cpsa-acsp.ca/papers-2004/Verrelli.pdf (last accessed on 02/04/2020)

6. Ananth Padmanabhan & Giridharan Padmanabhan, SALE FOR YOU, SERVICE FOR HIM, BOTH FOR TAXMAN!!!, (National Law School of India Review, vol. 23(2), 2012)

7. V.Niranjan, LEGISLATIVE COMPETENCE: THE UNION AND THE STATES, (The Oxford Handbook of the Indian Constitution, 2016)

8. Prof. M.P.Singh, V.N.Shukla’s Constitution of India, (Thirteenth edition, Eastern Book Company, 2017)

9. Arun Sagar, Federal Supremacy and the Occupied Field: A Comparative Critique, (Publius, vol.43 no.2, 2013, Oxford University press)

10. Tony Blackshield, WORKING THE METAPHOR: THE CONTRASTING USE OF “PITH AND SUBSTANCE” IN INDIAN AND AUSTRALIAN LAW, (Journal of the Indian Law Institute, 2008 vol.50 no.4)