The Supreme Court on Thursday ruled that the Union government has the exclusive jurisdiction to enact law on the supply and regulation of natural gas and liquefied natural gas and quashed a Gujarat legislation purporting to regulate the gas supply through pipelines on the ground that it passed through the state territory.
Answering the presidential reference on the issue, a five-judge constitutional Bench headed by Justice S Rajendra Babu said: "Natural gas and liquefied natural gas is a Union subject under Entry 63 List 1 and hence, Union government alone has exclusive competence to enact legislations in this regard."
Referring to the 2001 Gujarat government legislation, the Bench emphatically declared that states had no legislative competence to enact law on the supply and regulations of natural gas and LNG.
Declaring the Gujarat legislation as unconstitutional, the Bench said that the portion of the state legislation which dealt with the supply and regulation of natural gas and LNG is without any legislative competence and ultra vires (an action outside the proper authority or purposes of a corporation or corporate officer) of the constitution."
The state government, through its legislation three years ago, had intended to impose tax on the pipelines passing through the state and it felt that the pipelines were consuming considerably land of the state.
In view of the legislation and the fact that the pipelines passed through several states, the President had given a reference to the Supreme Court to determine whether the states had legislative competence to enact laws pertaining to supply and regulation of Natural Gas and LNG.
