The concept of "cooperative federalism" is quite familiar to us, which envisages that the Centre and the States should iron out their differences through negotiation and coordination, as explained by the Supreme Court in the 2018 judgment in State (NCT of Delhi) v. Union of India.
However, an interesting concept of "uncooperative federalism" has been introduced by the Supreme Court in the recent judgment in the case Union of India and Anr versus M/s Mohit Minerals, which held that the recommendations of of the GST Council are not binding on the Centre and the States.
The judgment authored by Justice DY Chandrachud acknowledged that the functioning of Centre and States is not in practice always collaborative or cooperative. The judgment further stated that political contestation between Centre and States is permitted by the Constitution and such contestation furthers both the principles of democracy and federalism.
"If the States have been conferred lesser power they can still resist the mandates of the Union by using different forms of political contestation as permitted by constitutional design. Such contestation furthers both the principle of federalism and democracy. When the federal units are vested with unequal power, the collaboration between them is not necessarily cooperative. Harmonised decision thrives not just on cooperation but also on contestation".
The judgment stated that "collaborative discussions" and "interstitial contestation" are the two ends of the spectrum of the dialogues between the Centre and the States.
Giving this background, Justice Chandrachud adopts the concept of "uncooperative federalism" discussed by scholars Jessica Bulman and Heather K. They argue that the States which possess lesser power could use licenced dissent, dissent by using regulatory gaps or by civil disobedience such as passing a resolution against the decision of the Central Government as means of contestation.
Quoting from their work, it is stated that 'uncooperative federalism' is valuable since "it is desirable to have some level of friction, some amount of state contestation, some deliberation-generating froth in our democratic system."
In this backdrop, Justice Chandrachud states :
"Therefore, the States can use various forms of contestation if they disagree with the decision of the Centre. Such forms of contestation are also within the framework of Indian federalism"
"Indian federalism is a dialogue between cooperative and uncooperative federalism where the federal units are at liberty to use different means of persuasion ranging from collaboration to contestation", the judgment added.
Federal units check the excerics of power of one another to prvent one group from exercising dominant power
The judgment went on to observe further :
"The federal system is a means to accommodate the needs of a pluralistic society to function in a democratic manner. It attempts to reconcile the desire of unity and commonality along with the desire for diversity and autonomy. Democracy and federalism are interdependent on each other for their survival such that federalism would only be stable in well-functioning democracies. Additionally, the constituent units in a federal polity check the exercise of power of one another to prevent one group from exercising dominant power"
Equal powers for Centre and States on GST
In the context of GST, the Court said that Article 246A of the Constitution confers equal power to the Parliament and the State Legislatures to legislate on GST. Though the Constitution has a "centralising drift" with larger share of powers to the Union, there are provisions like Article 246A which give equal power to both Centre and States.
"Merely because a few provisions of the Constitution provide the Union with a greater share of power, the provisions in which the federal units are envisaged to possess equal power cannot be construed in favour of the Union", the Court observed in this context.
The Court noted that the recommendations of the GST Council are not based on a unanimous decision but on a three-fourth majority of the members present and voting, where the Union's vote counts as one-third, while the States' votes have a weightage of two-thirds of the total votes cast.
"There are two significant attributions of the voting system in the GST Council. First, the GST Council has an unequal voting structure, where the States collectively have a two-third voting share and the Union has a one-third voting share; and second, since India has a multi-party system, it is possible that the party in power at the Centre may or may not be in power in various States", the judgment stated.
Therefore, the bench added that the GST Council is not only an avenue for the exercise of cooperative federalism but also for "political contestation" across party lines.
For more about the judgment, refer this report
Case Title : Union of India and Anr versus M/s Mohit Minerals Through Director
Citation : 2022 LiveLaw (SC) 500