Option 1 states that the Government of India Act of 1935 introduced provincial autonomy. This is correct. The act gave some degree of self-governance to the provinces of British India, allowing them to have their own legislative councils and making them responsible for certain areas of governance.

Option 2 states that the act proposed a federation of India. This is incorrect. The act did propose a federal structure, but it did not come into effect. Instead, it led to the partition of India in 1947 and the establishment of two separate countries, India and Pakistan.

Option 3 states that the act proposed the establishment of a Federal Court. This is correct. The act did establish a Federal Court with jurisdiction over matters of federal importance. This court was the highest court of appeal in British India.

In conclusion, the correct statements are 1 and 3. Option 1 is the correct answer.