Presidential power under Article 240 extends taxing laws to Union territories with Parliament-like effect.

Article 240 is described as conferring a broad power on the President to make regulations for Union territories and to repeal or amend applicable laws, including by extending Parliamentary taxing legislation with suitable modifications. The text states that this power is not confined to public order matters and has the force of an Act of Parliament for the territory. It also says the proviso to article 240(1) limits that power only after a legislature is created for the Union territory, while the constitutional scheme recognises Parliament's plenary legislative authority over Union territories. The excerpt ends mid-discussion on the separate distribution of income-tax.

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Issues: (i) Whether the President had power under article 240 of the Constitution to promulgate a regulation extending the Income-tax Act, 1961, to Pondicherry; (ii) Whether the proviso to article 240(1), the constitutional scheme for Union territories, or the absence of a separate distribution of income-tax for Union territories restricted that power.

Issue (i): Whether the President had power under article 240 of the Constitution to promulgate a regulation extending the Income-tax Act, 1961, to Pondicherry.

Analysis: Article 240 confers a general power on the President to make regulations for the peace, progress and good government of specified Union territories, and such regulations may repeal or amend any Act of Parliament or existing law applicable to the territory. The expression is of wide import and is not confined to matters of public order or law and order. Since Parliament itself has plenary power under article 246(4) to legislate for Union territories on all matters, the President may also, by regulation under article 240, extend Parliamentary taxing legislation to a Union territory with suitable modifications. The regulation has the force and effect of an Act of Parliament applicable to that territory.

Conclusion: The President had power under article 240 to extend the Income-tax Act, 1961, to Pondicherry.

Issue (ii): Whether the proviso to article 240(1), the constitutional scheme for Union territories, or the absence of a separate distribution of income-tax for Union territories restricted that power.

Analysis: The proviso to article 240(1) only curtails the President's power after a legislature is created for the concerned Union territory and does not limit that power before such creation. The constitutional provisions relating to Union territories show that Parliament has plenary legislative authority, and the definition of

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