Context: Recently, President gave assent to the controversial farm Bills passed by Parliament. However, amid protests by farmers’ organisations, Chhattisgarh, Maharashtra, and Punjab might not implement the new laws & Kerala and Punjab have declared their intention to challenge them in the Supreme Court.

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What are the arguments for and against the laws?
The government

• Transform Indian agriculture and attract private investment– The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, provides for contract farming, under which farmers will produce crops as per contracts with corporate investors for a mutually agreed remuneration.
• Liberating farmers-The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 liberates farmers by giving them the freedom to sell anywhere. 

What is the question over the constitutionality of these laws?

• These are some of the questions that will be raised in the petitions challenging the constitutionality of the Acts.
• As per Union of India v H.S.Dhillon (1972), the constitutionality of parliamentary laws can be challenged only on two grounds — that the subject is in the State List, or that it violates fundamental rights.
• As per Ram Krishna Dalmia v Justice S R Tendolkar (1958) and other judgments, the Supreme Court will begin hearings after presuming the constitutionality of these laws.
• The bills (now Acts as they have got the President’s assent) do not mention, in the Statement of Objects & Reasons, the constitutional provisions under which Parliament has the power to legislate on the subjects covered.

Where does the question of federalism come in?
What is federalism, first?

• Federalism is the system of government in which sovereignty is constitutionally divided between a central governing authority and constituent political units.
• It is based upon democratic rules and institutions in which the power to govern is shared between national and state governments, creating a federation.
• It essentially means both the Centre and states have the freedom to operate in their allotted spheres of power, in coordination with each other.

Federalism in India

• The Seventh Schedule of the Constitution contains three lists that distribute power between the Centre and states.
• There are 97 subjects in the Union List, on which Parliament has exclusive power to legislate (Article 246); the State List has 66 items on which states alone can legislate.
• The Concurrent List has 47 subjects on which both the Centre and states can legislate, but in case of a conflict, the law made by Parliament prevails (Article 254).
• Parliament can legislate on an item in the State List under certain specific circumstances laid down in the Constitution.

Concretization of the idea

• Federalism, like constitutionalism and separation of powers, is not mentioned in the Constitution. But it is the very essence of our constitutional scheme.
• In the State of West Bengal v Union of India (1962), the Supreme Court held that the Indian Constitution is not federal.
• But in SR Bommai v Union of India (1994), a nine-judge Bench held federalism as part of the basic structure of the Constitution.
• Neither the relative importance of the legislative entries in Schedule VII, Lists I and II of the Constitution, nor the fiscal control by the Union per se is decisive to conclude the Constitution is unitary.
• The respective legislative powers are traceable to Articles 245 to 254. The Status qua the Constitution is federal in structure and independent in its exercise of legislative and executive power,” it said.

Where is agriculture in the scheme of legislative powers?

• Terms relating to agriculture occur at 15 places in the Seventh Schedule.
• Entries 82, 86, 87, and 88 in the Union List mention taxes and duties on income and assets, specifically excluding those in respect of agriculture.
• In the State List, eight entries contain terms relating to agriculture: Entry 14 (agricultural education and research, pests, plant diseases); 18 (rights in or over land, land tenures, rents, transfer agricultural land, agricultural loans, etc.); 28 (markets and fairs); 30 (agricultural indebtedness); 45 (land revenue, land records, etc.); 46 (taxes on agricultural income); 47 (succession of agricultural land); and 48 (estate duty in respect of agricultural land).
• In the Concurrent List, Entry 6 mentions the transfer of property other than agricultural land; 7 is about various contracts not relating to agricultural land; and 41 deals with evacuee property, including agricultural land.
• It is clear that the Union List and Concurrent List put matters relating to agriculture outside Parliament’s jurisdiction, and give state legislatures exclusive power.
• No entry in respect of agriculture in the State List is subject to any entry in the Union or Concurrent Lists.

What about Entry 27 of the State List that is subject to Entry 33 of List III (Concurrent)?

• Entry 33 of the Concurrent List mentions trade and commerce, production, supply and distribution of domestic and imported products of an industry over which Parliament has control in the public interest.
• This includes foodstuffs, including oilseeds and oils; cattle fodder; raw cotton and jute.
• The Centre could, therefore, argue that it is within its powers to pass laws on contract farming and intra- and inter-state trade, and prohibit states from imposing fees/cesses outside APMC areas.
• However, like education, farming is an occupation, not trade or commerce.
• If foodstuffs are considered synonymous with agriculture, then all the powers of states in respect of agriculture, listed so elaborately in the Constitution, shall become redundant.

Three landmark cases

• Rajasthan v G Chawla (1959): courts have used the doctrine of “pith and substance” to determine the character of legislation that overlaps between entries. The constitutionality of legislation is upheld if it is largely covered by one list and touches upon the other list only incidentally.
• State of Bihar v Kameshwar Singh (1952): SC invoked the doctrine of colourable legislation, which means you cannot do indirectly what you cannot do directly.
• ITC Ltd v APMC (2002): Supreme Court upheld the validity of several state laws relating to agricultural produce marketing, and struck down the central Tobacco Board Act, 1975. It interpreted Entry 28 of the State List (markets and fairs) in favour of states, and rejected the Centre’s argument based on Entry 52 of the Union List read with Entry 33 of Concurrent List that tobacco is an industry declared as being under the control of Parliament in public interest.

What is the Doctrine of Colorable Legislation?

• This doctrine refers to the question of competency of the legislature while enacting a provision of law.
• If a legislature is prohibited from doing something, it may not be permitted to do this under the guise or pretence of doing something while acting within its lawful jurisdiction and this prohibition is an implied result of the maxim “what cannot be done directly, cannot be done indirectly”
• This doctrine is a tool used to determine the legislative competence of laws enacted by various legislatures.
• Therefore, it is a means to implement the separation of powers and impose judicial accountability.