The distribution of powers between the Union and the States is an essential feature of federalism. The tendency of federalism is to limit on every side the action of the government and to split up the strength of the State among co-ordinate and independent authorities is specially noticeable, because it forms the essential distinction between a federal system and a unitary system of Government . A Federal Constitution establishes the dual polity with the Union at the Centre and the States at a periphery and each endowed with exercise sovereign powers in the field assigned to them respectively by the Constitution. The one is not subordinate to the other, but the authority of one is to co-ordinate with other. In America, the Sovereign States which were keen to federate, did not like complete subordination to the Central Government hence they believed in entrusting subjects of common interest to the Central Government, while retaining the rest with them. The American Constitution only enumerates the powers of the Central Government and leaving the residuary powers to the States. Australia followed the American pattern because their problems were similar to the Americans. The Canadians were conscious of the unfortunate happenings in U.S.A. culminating in Civil War of 1891. They were aware of the shortcomings of the weak Centre. Hence, they adopted strong Centre. Our Constitution-makers followed the Canadian scheme. however, they added one more List - the Concurrent List. The present Constitution adopts the method followed by the Government of India Act, 1935, and divides the power between the Union and the States in three Lists – the Union List, the State List and the Concurrent List. In India, the Legislative powers of the Parliament and the State Legislatures is subject to the provisions of the Constitution, viz., the Scheme of the distribution of powers, Fundamental Rights and other provisions of the Constitution. The powers of the Centre and the States are divided. They cannot make laws outside their allotted subjects. It is completely through that a scientific division is not possible and questions constantly arise whether a particular subject falls in the sphere of one or the other government. This duty is vested in the Supreme Court of India. The Supreme Court has evolved the certain principles of interpretation in order to determine the respective power of the Union and the States under the three Lists. This article is an attempt to analyze the legislative relations between the Union and the States and role of Judiciary in protecting and preserving this concept by evolving various principles of interpretation.