Which article authorizes the Parliament to form a new state by separation of territory from any state?

Answer: Option B

Article 3 assigns to Parliament the power to enact legislation for the formation of new States. Parliament may create new States in a number of ways, namely by (i) separating territory from any State, (ii) uniting two or more States, (iii) uniting parts of States and (iv) uniting any territory to a part of any State.