# • INDIAN EXPRESS NEWSPAPERS (BOMBAY) PRIV.ATE LTD. & ORS. ETC. ETC v. UNION OF INDIA & ORS. ETC. ETC

- **Citation:** [1985] 2 S.C.R. 287
- **Court:** Supreme Court of India
- **Decided:** 1984-12-06
- **Case number:** Writ Petitions Nos. 3114·17 of 1981
- **Bench:** 0. Chinnappa Reddy, A.P. Sen, E.S. Venkataramiah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indian-express-newspapers-bombay-priv-ate-ltd-ors-etc-etc-v-union-of-india-ors-8880
- **Pages:** 86

## Headnote

· Constitution of India 1950, Article 19(1)(a)-Freedom of speech and expres.
,ion-Whether includes Freedom of press-Restrictions other than those tn Article
19~2)-Whether reasonable-Interference in the name of Public Interest-Whether
Justified.
Roll of PreSJ and Newspaperr-Duty of Court to held the balance even and
to strike down any unconstitutional invasion of press.
fandamental rights under Article J9(J)(a) and (g)-Whether different from
right conferred by First Amendment to American Constitution.
Article J3(3)(a)-Notification under section 25 Customs Act 1962-Contrary
to fundamental rights-Whether to be struck down.
Article 14-Classijication a/ newspapers for levying customs duty-Whether
discriminatory.
Article 41-Duty of State to encourage education of mas1es through media
of pm•-Necesslty of.
Entry 87 and 93, List 1. Seventh Schedule-Newspaper Industry-Levy of
tax-Competency of Parliament to enact laws-Scrutiny by Courts When arises
-Tax transgressing into the field of freedom of speech and expression and stifles
that freedom-Whether unconstitutional.
B
c
D
F
Article 32-Validity of tax-Duty of Court-Not to be burdensome-New1..
G
paper Industsy not to be sif,gled out-Custom Duty on newspaper-Whether tax
on know/edge-People's right to know-Imposition of tax-Government to be more
cautious.
Interpretation of statuteJ :
Co111tltutlon of India 1950, Article 19(/)(al-l•terpretation of-American
H
A
B
D
E
F
G
H
288
SUPRBl.tll COURT REPORTS
[1985] 2 S.C.11..
cases-Whether sole guide-Help In understaMlng the ba&ic principles of frtetfom
of 1peech and expre11lon.
Statutes Taxing Newsprint-Tests for determining vires of-Different from
other taxing statutes-Grounds of challenge . .
Customs Act/ 1962, Settion '25-Power to grant exemption-Whether
legislative power-Whether
notlfi~ation a Subordinate plece. of legislation -
Whether questi'onab/e on the Kround of unreasonableness-Power of Govr",.nment
· di1cTetionary but not unrestricted.
'
Customs Act, 1962, Section 25-Notification Substitution of by another--
Whether former notification would rerire if the latter is held inra/id.
Customs Tariff Act, 1975, Section 2 and Seco•d Schedule Heading 48.01/21
-Sub-heading 2-Newsprint-lmport duty and auxiliary levy at a flat rate--
Validity of.
Under the Indian) Tariff Act. 1934, there was a levy of customs duty on
imPQrted.!lllper. Exemption, however, had been granted for import of white,
grey or unglazed newsprint from the levy of any kind of cus\oms duty in excess
of !.5% ad vaforem but subsequently a specific import duty of Rs. 50 per MT
was levied on newsprint imports upto 1966. The Inquiry Committee on Small
Newspapers examined the question of customs duty on newsprint and Sl!bmitted
its report in 1965 recommending total exem~tion of newsp;int from Customs
duty. Pnrsilant to the said recommendation, the Government abolished
customs duty on newaprint altogeth<:r in the year 1966. In 1971, a rogutatoey
duty of2·1/2% wa1 levied on newsprint imports. This 2-1/2% regulatory duty
· was abolished and was converted into 5 % auxiliary duty by the Finance Act of
1973. On the Customs Tariff Act 1975 coming into force, the Indian Tariff
Act 1934 was repealed. Under aection 2 read with Heading No. 48.01/21 of
the Fit11t Schedule to the 197S Act, a levy of basic customa duty of.40% ad
valorem was imposed on newsprint. However, the 5% auxiliary duty ,levied from
April I, 1973 continued to be in OP,eration which was also totally abolished in
July 1977. The total exemption from customs duty on newsprint continued
till March J, 1981 when notification dated July 15, 1977 granting total exemp-.
tion from customs duty superseded by the issue of a fresh notification under
which publishers oi newspapers had to pay 10% ad va/orem customs duty on
import~rnewsprint. By another notification issued at about the same time the
auxiliai:y duty imposed by the Finance Act of 1981 above 5% ad 1•a/orem was
exempted in the case of newsprint.· The result was that a total duty

## Text

_Characters 0–39,984 of 211,431. This is a partial read: ask again with offset=39984 for what follows._

•
INDIAN EXPRESS NEWSPAPERS (BOMBAY)
PRIV.ATE LTD. & ORS. ETC. ETC.
v.
UNION OF INDIA & ORS. ETC. ETC .
December 6, 1984
287
[0. CHINNAPPA REDDY, A.P. SEN AND E.S. VENKATARAMIAH, JJ .)
· Constitution of India 1950, Article 19(1)(a)-Freedom of speech and expres.
,ion-Whether includes Freedom of press-Restrictions other than those tn Article
19~2)-Whether reasonable-Interference in the name of Public Interest-Whether
Justified.
Roll of PreSJ and Newspaperr-Duty of Court to held the balance even and
to strike down any unconstitutional invasion of press.
fandamental rights under Article J9(J)(a) and (g)-Whether different from
right conferred by First Amendment to American Constitution.
Article J3(3)(a)-Notification under section 25 Customs Act 1962-Contrary
to fundamental rights-Whether to be struck down.
Article 14-Classijication a/ newspapers for levying customs duty-Whether
discriminatory.
Article 41-Duty of State to encourage education of mas1es through media
of pm•-Necesslty of.
Entry 87 and 93, List 1. Seventh Schedule-Newspaper Industry-Levy of
tax-Competency of Parliament to enact laws-Scrutiny by Courts When arises
-Tax transgressing into the field of freedom of speech and expression and stifles
that freedom-Whether unconstitutional.
B
c
D
F
Article 32-Validity of tax-Duty of Court-Not to be burdensome-New1..
G
paper Industsy not to be sif,gled out-Custom Duty on newspaper-Whether tax
on know/edge-People's right to know-Imposition of tax-Government to be more
cautious.
Interpretation of statuteJ :
Co111tltutlon of India 1950, Article 19(/)(al-l•terpretation of-American
H
A
B
D
E
F
G
H
288
SUPRBl.tll COURT REPORTS
[1985] 2 S.C.11..
cases-Whether sole guide-Help In understaMlng the ba&ic principles of frtetfom
of 1peech and expre11lon.
Statutes Taxing Newsprint-Tests for determining vires of-Different from
other taxing statutes-Grounds of challenge . .
Customs Act/ 1962, Settion '25-Power to grant exemption-Whether
legislative power-Whether
notlfi~ation a Subordinate plece. of legislation -
Whether questi'onab/e on the Kround of unreasonableness-Power of Govr",.nment
· di1cTetionary but not unrestricted.
'
Customs Act, 1962, Section 25-Notification Substitution of by another--
Whether former notification would rerire if the latter is held inra/id.
Customs Tariff Act, 1975, Section 2 and Seco•d Schedule Heading 48.01/21
-Sub-heading 2-Newsprint-lmport duty and auxiliary levy at a flat rate--
Validity of.
Under the Indian) Tariff Act. 1934, there was a levy of customs duty on
imPQrted.!lllper. Exemption, however, had been granted for import of white,
grey or unglazed newsprint from the levy of any kind of cus\oms duty in excess
of !.5% ad vaforem but subsequently a specific import duty of Rs. 50 per MT
was levied on newsprint imports upto 1966. The Inquiry Committee on Small
Newspapers examined the question of customs duty on newsprint and Sl!bmitted
its report in 1965 recommending total exem~tion of newsp;int from Customs
duty. Pnrsilant to the said recommendation, the Government abolished
customs duty on newaprint altogeth<:r in the year 1966. In 1971, a rogutatoey
duty of2·1/2% wa1 levied on newsprint imports. This 2-1/2% regulatory duty
· was abolished and was converted into 5 % auxiliary duty by the Finance Act of
1973. On the Customs Tariff Act 1975 coming into force, the Indian Tariff
Act 1934 was repealed. Under aection 2 read with Heading No. 48.01/21 of
the Fit11t Schedule to the 197S Act, a levy of basic customa duty of.40% ad
valorem was imposed on newsprint. However, the 5% auxiliary duty ,levied from
April I, 1973 continued to be in OP,eration which was also totally abolished in
July 1977. The total exemption from customs duty on newsprint continued
till March J, 1981 when notification dated July 15, 1977 granting total exemp-.
tion from customs duty superseded by the issue of a fresh notification under
which publishers oi newspapers had to pay 10% ad va/orem customs duty on
import~rnewsprint. By another notification issued at about the same time the
auxiliai:y duty imposed by the Finance Act of 1981 above 5% ad 1•a/orem was
exempted in the case of newsprint.· The result was that a total duty ·of 15%
adv4lorem came to be imposed on newsprint for the year 1981·82, which led
to the increase in the price of newspaper resulting in fall in circulation of news ..
papers. In the first set of writ petitions this 15% levy was challenged.
During the pendency of thCse writ petitions while Customs Tariff Act,
1975 was amended levying 40% ad valorem plus Rs. 11)00 pet MT as customs
duty on newsprint, the auxiliary duty payable on all goods s~bject to customs
duty was increa•ed to 50% ad vaforem ..
D~t by notification dated Februray 82.
!
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iNOiAN llXPRE"!l v. UNION '
289
1982 issued under section
25(2) of the Customs Act 1962 the notification
dated March 1, 1981 was superseded and Rs. 550 per tonne was imposed as
customs duty on newsprint and auxiliary duty was fixed at Rs. 275 per tonne.
In all Rs. 825 per tonne of newspaper had to be paid as duty.
'Under the newsprint policy of the Government there were three sources
of supply of newsprint--{i) high seas sales, (ii) sales from the buffer stock built
up by the State Trading Corporation which includes imported newsprint, and.
(iiQ newsprint manufactured in I11dia. Imported newsprint is an important
component of the total quantity of newsprint utilised by any newspapef ·
establishment .
The validity of the imposition of import duty on newsprint imported· from
abroad under section 12 of the.Customs Act 1962 (Act 52of1962) read with
section 2 and Heading 1'0. 48.01/21 Sub-beading No. (2) in the First Schedule
to the Customs Tariff Act, 1975 (Act 51 of 1975) and the levy of auxiliary duty
under the Finance Act, 1981 on newsprint as modified by not.itications issued
under aection 25 of the Customs Act 1962 with effect from March 1, 1981 was
challenged in the writ petitions.'
In the writ petitions it was contended :(I) that the imposition of the
import duty has the direct effect of crippling the freedom of speech and expres•
sion guaranteed by the Constitution as it led to the increase in the price of newspapers and the inevitabJe consequence of reduction Qf their circulation ; (2)
that with the growth of population and literacy 'in the country every newspaper is expected to register an automatic growth of at Jeast S% in its. c:i,rcuJation every year but this growth is directly f.lmpeded by tl!e ~ncrease in the price
of newspapers ; (3) that the method adopted by the Custom! Act, 1962 and the
Cu11toms Tariff Act, l 97S in determining the rate of impOrt duty has e,g;posed
the newspaper publishers to Executive interference; (4) that there w~ no need
to impose customs duty on newsprint which had enjoyCd tQtaJ .exemptl9ri froll)
its payment till March l, 1981, as the foreign exchange position was quite
comfortable. Under the scheme in force, the State Trac\ing Corporation of
India sells newsprint to small newspapers with a circulatiOn of less than 15,000
at a price which does not iCclude any jmport duty, to medium newspapers witbr
a circulation between 15,000 and 50,000 at a price which includes 5% ad valorent
duty (now Rs. 275 per MT) and to big 1 newspapers having a circulation of
over 50,000 at a price which includes the levy of 15% ad valorem duty (now Rs.
825 per MT). This classification of newspapers' into big, medium and small
newspapers ii; irration,al as the purchases on high seasiare sometimes effected by
a publillher owning many newspapers which may belong to different classes ; (5)
that the enormous increase in the price of newsprint subsequent to March 1,
1981 and the iatiationary economic conditions which led to higher cost of
production have made it impossible fot the industry to bear the duty any
tonger. Since the capacity to bear the duty is an .essential element in determining the reasonableness of the levy, the continuance of the levy i• violative of
Article 19(1)(a) and Article 19(l)(g) of th• Constitution. The imposition of the
levy on large ne,..papers by the Executiv<>'is done with a view to stiflina circulation of newspapers which are highly critical of the perfonnance of the admlnisA
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Sl/PIU!Mll COURT llEPOl!.TS
[1985]' 2 s.c .. 11..
trat!~n. .The classification of newspapers into small, medium and big for
puriioses of levy of import duty iB violative of Article 14 of the Constitution ;
and (6) that the power of' the Government to levy taxes of any kind on the
ne\VSpaper establishment rings the death.knell of the freedom of press and
would be .totally against the spirit of the Constitution.
The Union of India contested the writ petitions alleging (I) that the Government bad levied the duty in the public interest to augment the rcveoue of the
o·ovcrnmcnt. When exemption is given from the customs duty, the Executive
has to satisfy itself fhat there is some other corresponding pubJic interest justifying such exemption and that in the absence of any such public interest, there is
no power to exempt but to carry out the mandate of Parliament which has
fixed the rate of duty by the Customs Tariff Act, 1975 ; (2) that the classification of'neWspapers for purposes of granting exemptiOn is done in the public
irtterest having regard to relevant considerations, and that the levy was not ma/a
fide. Since every section of the society.has to bear its due share of the "economic
burden of the state;·1evy of custdms duty on newsprint cannot be considered to
be violative of Article 19(1) (a). The plea that the burden of taxation is e<cessive is an.irrelevant factor to the levy of import duty on newsprint ; (3) that
the fact that the foreign exchange position was comfortable was no bar to the
imposjtion of import cjuty ; and (4) since the duty imposed is an indirect tax
which would be borne by the purcbaS<r of newspaper, the petitioner could
not feel aggrieved by it.
·
Allowing theWrit Petitions,
HELD : I. The expre11ion 'freedom of press' has not been used in
Article 19 of the Constitution but, as declared by this Court, it is included in
Article 19 {I) (a) Which guarantees freedom of speech and expression. Freedom of Press means freedom from interference from authority which would
have the etfect of interference with the content and circulation of news:.
papers. [310C; 351]
2. : 'There could not be any kind of restriction on the freedom of speech
and expression other than those mentioned in Article 19 (2) and it is clear that
thete could not be any interference with that freedom in the name of public
interest. Even when clause (2) of Article 19 was <ubsequently substituted
under the Constitution (First Amendment) Act, 1951 by a new clause which
permitted the imposition of reasonable reStrictions on the freedom of speech and
expresSion in the interests of sovereiloty and integrity of India, these urity
of the State, friendly relations with foreign States, public order, decency- -or
morality in relation to contempt of cout:t, defamation or incitement to an offence.
Parliament did. not _choose to inclpde a clause enabliog the imposition
of reasonable restrictions in the public in.terest. (3J2B-CJ
3. Fr~dom of press js thelleart of social and political intercourse. The
press has now • .,.urned the role of the public educator making formal and
non-for111al education possible in a large scale particularly in the developing
world, wh~re television. and o\h\lr kinds of modern comlllQnication are 11ot
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INDiAN EXPRESS v.· lJNlON '
~91
still available for all sections of societ'y. The purp0se of the piess· is to 3.dvance
the pubJic interest by pub!hhing facts and opiniOns withOut which. a democratic electorate cannot make responsible judgments. Newspapers being
purveyors of news and views- having a bearing on public administi'ation very
often carry material which Would not be palatable to governments and other
authorities. With a view to thecking malpractices which inierfere with free
flow of informatioO., democratic constitutions all over the world have made
Provisions guaranteeing the fri!cdom of speech and expression laying 'down the
limits of interference with it. [316B-D; HJ
It is the primary duty of all the national courts to uphold the said free-. ·
dom and invalidate all laws or administrative actions
which
interfere
with it, contrary to the constitu~ionaCmandate. [3l7A]
.
· Brij Bhushan & Ani-. v, The State of Delhi,' [1950} ·~;.C.R.' ·605, Bennett
Coleman & Co. & OTs. v. Union of India & Ors·. [1973J 2 S.C.R. 757, Romesh
Thappar v. The State of Madras; 1950 S.C.R. 594, Express Ne.wspapers (Privtite)
Ltd. &: Anr. v. Tile Union of India & Ors., [1959] S.C.R. 12 and Sakal Papers
(P; Ltd. & Ors v. T7ze Unfon of India, (1962] 3 S.C.R. 842,fo//owed •.
·'
1 Annals of Congress (1789-96) p. 141 ; D.R. Mankekar: The Press under
~Pressure (1973) p. 25 ; Article j9 ·of the Universal Declaration of Human Rights,
[1948 : Article 19 of the International Covenant on Civil and Political Rights,
1966 ~·Article JO of the Europe~n Con11elztion on Human Rights: First Amendment 'to the Constitution of the United States of America ; 'Article by Frank C.
Newman and Karel Vasak on "Civil and political Rights' in the International
Dimensions of Human Rights (Edited by Karel Vasak) Vo. l,pp.155·156; "Many
VoiceS, One Worldn a publication of UNESCO containing the Final Report of -
the International Commission for the Study of Communication Problems, Part V
dealing with 'Communication Tomorrow' p. 265; Article entitled "Toward a
G_eneral Theory of the First Amendment' by Thomas I. Emerson (The Yale Law
Journal, Vol. 72, 877 at p. 905: Second Press Commission Report (Vol.I.
pp. 34.35). referred to.
S. (i) Excluding sm1ll newspaper establishm1:nts · having circulation
of less than about 10,000 ~opies a day, all other bigger ·newspaper
establish~
meats have ·the characteristics of a large industry. The Governinent has to
provide_ many services to them resulting in a big drain on the financial
resources of the State as many of these services are heavily subsidized.
Naturally such big newspaper organisations have to contribute their due share
to the public exchequer and have to bear the common fiscal burden like' au
others. [324C ; EJ
· '
(ii) While ex.amining the constitut"ionality of a law said tO be contra·
veniag Article 19 (l) (a) Or the Constitutiori, the.decisions of ·the Supreme
Court of the United States of America cannot be solely relied upon for
guidance but _couid be taken into consideratiori fof understanding the basic
. principles of freedom of speech and expressiyn and the need for that freedom
in a democratic country.· [324F·G]
(iii) The pattern of Article 19 (I) (a) and of Article.19(1)(g)ofth~:
Indian Constitution is different from the pattern of the fitst AmCDdment to the
American Constitution which is almost absolute in its terms. The rights
guaranteed under Aniele 19 (I) (a) and Article 19 (I) (g) of the Constitution
'
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. F
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292
SUPREME COURT REPORTS
[1985) 2 S.C.R.
arc to bC read alongwith clauses (2) and (6) of Article 19 which carve out areas
in respect or which valid legislation can be made. (324H ; 325AJ
6. Newspaper industr)' has not been granted exemption from taxation
in express terins. Entry 92 of List I of the Seventh· Schedule in the ·constitution empowers Parliament to make laws levying taxes on saJe or Purchase
or newspapers and on advertisements . published therein. The power to levy
customs duties on goods imported into the country is also entrusted to Parliament by Entry 83 in List I of the Seventh Schedu1e' to the ConStitution.
[325B ; 326G]
. .
7.- The First Amendment, to the Constitution of the United States of
America is almost in absoJute terms and, therefore, r.o Jaw abridging the
freedom of the press can be made by" the Congress. ·Yet the American Courts
have recognised the power of the State to_ levy taxes on newspapers establish·
ments.subjecttOjudicialreview.bycourts by the application of the due pro.
ccss of law principle. [328E-FJ
8. The police'Power •. taxation and eminent domain are all forms of
social control which ai.-e essential for peace and good government. In India the
power to levy tax on persons carrying on the business of publishing n:!wspapers
has got to be rCcoitlised as it is inherent in the vefy Concept of government:
But the exercise of 5UCh power should. however. be subject to scrutiny by
courts. Entry 92 · of List I of the Seventh Schedule to the Constitution
expressly suggests th~ e~iste~ce of such power. [328G ; 329C]
..
' 9. It is not necessary for the press to be subservient to the Government.
As tong as 'this Court sits• newspapermen need not- have the fear of their
freedom being curtailed hy unconstitutional mean5. It is not acceptable 'that
merely beCause the Government has the power to levy taxes. the freedom of
press would be totally lost. The Court is always there to hold the balance even.
and to strike down any uncons~itutional invasion. of.that freedom. [338G ; 339Fl
10 •. Newspaper industry enjoys two or the fundamental rights, namely,
the freedom of speech and expression guaranteed under Article 19 (1) (a) _and
the freedom to engage in any profession, occupation, trade, industry or business iuarantced under Article 19 (I) (g). While there can be no tax on the
right to exercise freedom of ei:pression. , tax is Jeviable on profession, occu·
pation. trade, business and industry. Hence tax is leviable · on newspaper
industrY. But when such .tax transgresses into the field of freedom of ex·
pression and stifles that freedom. it becomes unconstitutional. As long as
it is within reasonable limits and does not impede freedom of expression it
will not be contravening the limitations Or Article 19 (2). The delicatC . task
of determining when it crosses from the area or p[ofession, occupation,.
trade. business or industry into th'e area of freedom of expression and_ inter·
Ceres with that freedom is eiltrusted to tb-e Courts. [339G·H; 340A-B]
_ .
11. White ~levying a tax on newspaper industry it must. be kept in mind
that it should not be an over-burden on newspapers which constitute the Fourth
Estate or the· country. Nor should it singtC out newspaper industrY for harsh
treatment. Imposition ofa tax Jike the customs-duty- on __ r.ewsprint is an
imposition·. on knOwtedgC 3.nd 'wou!d virtually amOUnt to'a burderl imposed on
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INDIAN EXPRESS P. UNION
293
a man for being literate and for being conscious of his duty as a citizen to
inform himse1f about the world around him. 'The public- interest in frredom
of discussion (of which the freedom of the press is one aspect) stems from
the requirement that members of a democratic society should be sufficiently
informed that they m1y influence inteUigentJy the decisions which may affect
'themselves'. [34JH ; 342A·Bl
J2. FreeJom of expression has four broad social pfilposes to ~erve: (i)
it helps an individual to attain sdf fulfitIDeat. (ii) it assist.io in the di~overy of
truth, (iii) it strengthens_ the capacity of an individual in p:irticipating in dl!cisiori.
making, and (iv) it provides a mechanism . by which it would be possible to
eStablish a reasonable balance between stabifity and social change. All members
of society shou!d be able to form their own beJiefs and communicate them
freely to others. In su!:n. the fundJ.mental principle is the people's fight to
know. Freedom of speech and expression should, therefore~ receive a generous
support from all those who believe in the participation or people in the
administration. It is on account ·of this special interest' which Society has in
the freedom of speech and expression that the approach of the Government
should be more cautious while levying taxe.S on matters concerning newspaper
industry than while levying taxes on other matters. (342C~E]
13. In view of the intimate connection of newsprint with the freedom
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of the press. the tests for determining_ the vices of a statute taxing newsprint
D
have, therefore. to be different from the tests usua!Jy adopted for testing the
vires of other taxing statutes .. In the case" of ordinary taxing statutes, the Jaws
may bC questioned oaly if they are either openly confiscatory or a colourable
device to confiscate. qn the other band, in the case of a tax on newsprint, it may·
be sufficient to show a distnct and noticeable burdensomeness, clearly and
directly attributable to the tax. [3420-H)
' Constituent A.<semh/j./Jebates. Vol. IX pp. 1175-1180 dt. September 9,1949:
Corpus Juris Secundum (VoJ. -16) p. 1132; American Jurisprudence 2d (Vol. 16)
p. 662; Article on the First Amendment by Thomas I. Emerson (The Yale Law
Journal, Vol. 72 at p. 941); Second Press Commission Report (Vol.J) p. 35;
Essay No. 84 by Alexander Hamilton in 'The Federal!st,; Alice Lee Grosjean,
Supervisor of Public Accounts for. the State of Louisiana y. American Press
Company. 291 U.S. 233 : 80 L. ed. 660; Robert Murdock Jr. v. Commonwealth
of Pennsylvania (City of Jeannette).
319. U.S. IOS: 87 Law. ed. 1292 and
Attorney General&: Anr. v. Antigua Times' Ltd .• [1975] 3 AJI ~· R. 81. referred
to
Bennett Coleman d: ·Co. &: Ors. v. Uni~n of India & Ors .• [1973] 2 S.C.R.
157 and Sakal Papers (P) Ltd. & Ou. v. The Union of· India, [1962) 3 S.C.R.
E
F
842, distinguished.
G
Attorney General v. Times Newspapers, [1973] 3 All. E.R. S4, followed.
14, In the instant cases, assum;ng that the power to gr~nt exemption
under. section 25 of the Customs Act, 1962 is a JegisJative power and a
notification issued by the Government thereunder amounts to a piece of
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SUPREME COURT REPORTS
[1985] 2 s.C.R.
subordinate legislatio~ even then the notification_'.is liable to be questioned on
the ground that it is an unreasonable one. [345C-D]
15. A piece of subordinate legislation does not carry the sfme degree of
immunity which is enjoyed by a stattite passed by a competent legislature.
Subordinate legislatiOn may be questioned on any of grounds on which plenary
legislation is questioned. In addition it may also be questioned on the ground
that it does not conform to the statute under which it is made. It may further
be questioned on the ground that it is contrary to some other statute. That is
because subordinate legislation must yield to plenary legislation. It may also
be questioned on the ground ~hat it is unreasonable, unreasonable not in the
sense of not being reasonable, but in the sen:;e that it is manifestly arbitrar'y.
,
,
(345H ; 346A-B]
16. In India arbitrariness is not a separate ground since it will come ·
· within the embargo or Article 14 of the Constitution. In India any enquiry
into the vires of dele.gated legislation must be confined to the ground on which
pl~nary legislation may be questioned to the ground that it is contrary to other
statutory provisi6ns or .that it is so arbitrary that it could not be said to be iri
conformity with the statute or that it offends Article 14 of the Constitution.
Subordinate legislation cannot be questioned on the ground of violation of
principles of natural justice on which administrative action may be questioned.
, (347E·G]
17. A distinction must ·be made between delegation of a legislative
function in the case of which the _question of reasonableness cannot be enquired
into and the investment by statute to exercise particular discretionary power.
In thC latter case the question may be considered on aU grounds on which
administrative action may be questioned, such as, non-application of mind,
taking irrelevant matters into consideratioa, failure to take relevant· matters
blto consideration, etc. etc. On the facts and circumstances of a case, a
subordinate legislation m3.y be struck. down as arbitr(!ry or contrary to statute
if it fails to take into account very vital facts lYhiCb-' either expressly or by
necessary implication are required to be taken into consideration by the statute
or. Say, the Constitution. This can only be done on the ground that it does
not conform to the statutory or constitutional requirements or that it offends
Article. 14 or Article 19 (1) (a) of the Constitution. It cannot. no doubt, be
done merely on the ground that it is not reasonable or that it bas not taken
into account relevant circumstances which the Court considers relevant. [348A-D]
18. In cases Where the power vested in the Government is ~ power which
has got to be exercised in tLe public interest. as· it harpens to be here. the
Court may require the Government to exercise that power in a reasonable way
in accordance with. the spirit of the Constitution.. The fact that a notification
issued under section 25 (I) of the Customs Act, 1962 is required to be laid before
Parliament under section 159 thereof does not make any substantial difference
as regards the jurisdiction of the court to pronounce on its validity. [3.48E-FJ
19. Section 25 of the Customs Act, 1962 under which the notifications
are issued confers a power on the Central Government coupled with a duty to
examine the whole is~uo in· the light of public interest. It provides that if the
Central Government is satisfied that it is necessary in .the public interest so to
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INDIAN EXPRESS v. UNION
295
do it may exempt generally either absolutely or subj~ct to such conditions,
A
goods of any description, from the whole or any part of the customs duty leviable thereon. The Central Government may if it is satisfied that in the pubHc
interest so to do exempt
from the payment of duty by a special order in each
case under circum:;tances of an exceptional nature to be stated in such order
any goods on which duty is lev!able. The power e11:ercisable under section 25
of the Customs Act, 1962 is no doubt discretionary but it is not unrestricted.
l350C-EJ
· B
20. Any notification issued under a statute also being a 'law' as defined
under Article 13(3)(•) of the Constitution is liable to be struck down if it is
contrary of any of the fundamental rights guaranteed under Part III of the
Constitution. [350H ; 35 lA]
.frticle entitled
1ludicial Control of Delegated Legislation : The Test of
C
Reasonableness' by Prof. Alan Wharam, 36 Modern La~ Review 61 l at pp. 622
23 ; H.W.R. Wade: Administrative Law (5th Edn.) pp. 747-748; Municipal
Corporation of Delhi v. Bir/a Cotton, Spihning and Weaving Mills, Delhi & .Anr.,
[1968] 3 S.C.R. 251 ; Kruse v. Johnson, [1898] 2 Q.B.D. 91 ; Mixnom Properties
Ltd. v. Chertsey U.D.C. {1964] I Q.11. 214; The Tu/sipur Sugar Co. Ltd. v.
The Notified Area Committee, Tu/sipur, [1980] 2 S.C.R. 1111 ; Ramesh Chandra
D
Kachardas Porwal & Ors. v. State qf Maharashtra & Ors. etc., [1981] 2 S.C.R.
866; Bates v. Lmd Hai/sham of St. Marylebone & Ors. (1972] I W.L.R.
1373 and Associated -Provincial Picture Houses Ltd. v. Wednesbury Corporation,
(1948] I K.B. 223, referred to.
Narinder Chand Hem Raj&: Ors. v. Lt. Governor, Administrator, Union
Territory, Himachal Pradesh & Ors., [1972] 1 S.c.R. 940, distinguished.
E
State of Madras v. V.G. Rao, [1952] S.C.R. 597 and Breen v. Amalgamated Engineering Union, [1971] 2 Q.B. 175, relied upon.
21. If any duty is levied on newsprint by Government it necessarily
has to be passed on to the purchasers of new<:papers, unless the industry is
able to absorb it. In order to pass on the duty to the consumer the price of
newspapers has to be increased. Such increase naturally affects the circulation
of newspapers adversely. [352G]
22. The pattern of the law imposing customs-duties and the manner in
which it is opereted, to a certain extent exposes the citizens who are liable to
pay customs duties to the vagaries of executive discretion. While Parliament
has imposed Juties by enacting the Customs Act, 1962 and the Customs Tariff
Act, 1975, the Executive Government is given wide power by section 25 of the
Customs Act, 1962 to grant exemption from the'1evy of Customs Duty, It is
ordinc.rily assumed that while such power to granfexemptions is given to the
Government it will consider all relevant asixcts governing.the-question whether
exemption should be granted or not. In the instant case, in 1975 when the
Customs Tariff Act, 1975 was enacted, 40% ad valorem was levied on news ..
print even though it had been exempted from payment of such c:luty. Jf the
exemption had not been continued, newspaper publishers had to pay 40% ad
valortm customs duty on the coming into force of the Customs Tariff Act,
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[1985] 2 s.c.R.
1975. ·Tben agaia in 1~82 by the Finance Act, 19g2 an extra levy of Rs. 1000
per tonne was imposed in addition to the original 40% ad valorem duty even'.
though under the exemption notification the basic duty had been fixed at 10%
of the value of the imported newsprint. Neither any material justif}riog the
said additional levy was produced by the Government nor was it made
clear why this futile exercise 'of levying an additional duty of Rs. 1000 per
tonne was done when under -the notification issued· unde~ section 25 of the
Customs Act, 1962 on March 1, 1981, which was in force then, customs duty
on newsprint above 10% ad valorem had been exempted. While levying tax
on an activity which is protected also by Article 19(1)(a) a greater degree of care
should· be e:ichibJted. While it is indisputable that the newspaper industry
should also bear its due share of the total burden of taxation alongwith the
rest of the community when any tax: is specially imposed on newspaper industry.
it should be capable of being justified as a reasonable levy ia court when its
validity is challenged. In the' .. absence of sufficient material, the levy of 40%
plus Rs. 1000 per tonne would become vulnerable to attack. [355E-H; 356A-C]
23 .. The reasons given by the Government to justify the total customs
duty of 15% levied from March l, 1981 or total Rs. 825 per tonne as It is
currently being levied appear to be inadequate. In the Finance Minister~s
speech delivered on the floor Of the Lek 'Sabha in 1981, the first reason given
for the 1evy of 15% duty was th3.t it was intended '·to promote a measure of
restraint in the consumption of imported newsprint and thus help in conserving
foreign exchange." This ground appears to be not tenable for two reasons. Nobody
in Government had~ ever taken into consideration the effect of the import of
newsprint on the foreign exchange reserve. before issuidg the notification levying
15% duty. Secondly, no nawspaper owner can i1nport newsprint directly. Newsprint import is Canalised through the State Trading Corporation. If excessive
import of newsprint adversely affects foteign exchan-ge reserve,~ State Trad·
ing Corporation may reduce the import of newsprint and allocate lesaer quantity
of imported newsprint to newspaper
establishmen~s. There is, however, no
need to· impose import duty with a"view to curbing excessive import of news.
print. It is clear that the Govem·mcnt had not considered vitaJ aspects before
withdrawing the total exemption which was beiug enjoyed by newspaper industry
till March I, 1981 aad imposing 15% duty on.newsprint. (356D-H; 357A·B]
~4. A~tention was particularly drawn to the statement of the Finance
Minister that one of the considerations which prevailed Upon the Government
io levy the.cUstolns dUty was that'', t~e newspapers contained 'piftles'. A 'piffie'
means foolish -nonsense. It appears that one of the reasons for levying the
duty Was that Ce~tain writings in newspapers appeared. to tlie Mihistcr as 'piffles'.
Such action is not pi;rmissibk Lirider the Constitution. [361H ; 362Al
zs. Matters concern-ing the intellect and ethics do undergo fluctuations
from era to era. The wotld of mind is a ·changing one. It is not static. The.
streams of literature aD.d of taste ind judgment in that sphere arc not stagnant.
They have a quality of freshness and vigour. They keep oa changing from time
to time, fr?rri place to plilce and from community to community. [868A)
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lND!AN BicPiulss v. UNION
26. It is one thing to say that in view of considerations relevant to
public finance which require every citizen to- contribte a reas6nable amouD.t
to public exchequer customs duty is leviabte even on newsprint used by newspaper industry and an entirely different thing to say that the leVy is imposed
because the newspapers genera11y contain 'piffles·. While the former may be
valid if the circulation of newspapers is not affected prejudicially, the latter
is impermissible under the Constitution as the levy is being made on a consideration which is wholly outside the constitutional limitations. The Government c3.nnot arrogate to itself the power to prejudge the nature of cont_ents of
newspapers even before they are printed. Imposition of a restriction of the
above kind virtually amounts to conferring on the Government ·the power to
precensor a newspaper. The above reason given by the Minister to levy the
customs duty is wholly irrelevant. [363B-DJ
27 The argument on behalf of the Government that the effect of the
impugned levy i ~minimal cannot be accepted. [36SCJ
28. There are factors indicating that the present 1evy is heavy and is
perhaps heavy enough to affect .circulation. There appears to be a good
ground
to
direct
the
Central
Government to reconsider the matter
afresh. [366C ; DJ
Final Report of the International Commssion for the Study of CommuniM
cation Problems, pp. JOO add 141 ; Encyclopaedia Britannica [1962] Vol. 16; p.
339; Second Press Commission Report (Vol. II) pp. 182-183; Bennett Coleman
& Ca. and Ors. v. Union of India and Ors., [1973] 2 S.C.R. 757; Sakal Papers(P)
Ltd. & Or.. v. The Union of India, [1962] 3 S.C.R. 842; William B. Cammarane
v. United Stater of.America, 358 US 498 ; 3 Led 2d 462 ; Jeffery Sole Bigelow
Commonwealth of Virgina, 421 US 809 : L ed 2d600 at 610 and Robert E.
Hannegan v. Esquire, Inc. 327 U.S. 147 : 90 Led. 586, reffered to.
Hamdard Dawakhana (Wakf) Lal Kuan, Delhi & Anr. v. Union of India
& Ors., [1960] 2 S.C.R. 671 ; Lews J. Velentine v. f.J. Chrestensen, 86 Law
ed. !292 and in re Sea Customs Act, [1964] 3 S.C.R 787, distinguished.
Romeah Thapper v. The State of Madras, [1950] S.C.R. 564 ; Honou.able Dr. Paul Borg Olivier & Anr. v. Houourable Dr. Anton Buttigieg, [1%7)
A.C. 115 (P.C.) ; Thomas v. Collins, [1944] 323 U.S. 516 Martin v. City of Stru·
thers, (1943]319 U.S. 141, followed.
29. The classification of the newspapers into small, medium and big
newspapers for purposes of levying customs duty is not violative of ·Article 14
of the Constitution. The object of exempting small newspapers from the
paymont of cu.ioms duty· and levying 5% ad 'alorem (now Rs. 275 per
MT) on medium newspapers while levyiny full customs duty on big news·
papers is to assist the small and ·medium newspapers, in bringing down their
cost of production. Such papers do not command · large advertisement
're~
venue. Their area.of circulation is limited and majority of them are in
Indian languages catering to rural seclor. There is notbin1 sinister in the
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SUPREMli COURT REPORTS
(1985] 2 s.c.a.
object nor can it. be said that the classification has no nexus with the object to
be achieved. [366F-G]
..
Benn£tt Coleman & Co. & Ors. v. Union of India & Ors., [1973]
2 S.C.R. 757, referred to.
30. Quashing of the impugned notification dated March I, 1981, which
had repealed the notification dated July 15, 1977 under which total exemption
had been granted would not revive the notification dated July 15, 1977.
Once an old rule has been substituted by a new rule, it ceases to exist and
it does" not get revived w.\len the new rule is held invalid. Since the competence of the Central Government to repealer annul or supersede the
notification dated July 15, T977 is not questioned, its revival on the impugned notifications being held to be void would not ari_se and, therefore,
on tho quashing of the impugned notifications the petitioners would have
to pay customs duty of 40% ad va/orem'from March l, !981 to February
28, ·1982 and 40% ad va/orem plus Rs. 1,000 per MT from March I,
1982 onwards. In addition to it they would also be liable to pay auxiliary
duty of 30% ad valorem during the fiscal year 1982·83 and auxiliary duty of
50% ad va/orem during the fiscal year 1983·84. They would straightaway be
liable to.pay the whole of customs duty and any other duty levied during the
current fiscal year also. Such a resul_t cannot be a!lowed to ensUe. The
challenge to the validity of the levy prescribeu by the Customs Tariffs Act,
1975 itself cannot be allowed to succeed. [370F-HJ
31. The Government has failed 10 discharge its statutory obligations
While issuing the impugned notifications. The Government is directed to re-
'examine the wbo)e issue after taking into account au relevant considerations
fOr_the period subsequent to March 1, 1981. The Government cannot be
doprivod of the legitimate dut~ payable on imported newsprint. [37JD.EJ
32. Having regard to the peculiar features of these cases and ArticJe
32 of the Constitution which imposes an obligation on this Court to enforce
the fundamental rights and Article 142 of the Constitution which enables this
Court in the exercise of its jurisdiction· to make such order as is necessary
for doin& complete justice in any cause or matter the followiiig order was
made : [371F)
I. The Government of India shall reconsider within six months the
entire question of levy of import duty or auxiliary duty payable by the petitioners
and others on newsprint used for printing newspapers, periodicals etc. with effect
from March 1,1981. The petitioners and others who are engaged in newspapers
business shall make available to the Government all information necessary to
decide the question. [371G-HJ
2. If on such reconsid.:ration the Government decides that th!!re should
be any ·modification in the levy of customs duty_ or auxiliary duty with effect
from March 1,1981, it shall take necessary steps to implement its decision. 372A]
3. Until such redetermination of the liability of the petitioners and
others is made, the Government shall recover only Rs. 550 per MT on
ft. .
imported newsprint towar_ds customs duty and auxiliary duty and shall n~t
"
1-:
INDIAN EXPRl's'S v. UNION
299
insist upon payment of duty in accordance with the impugned notificatioos.
The concessions extended to medium aa:d small newspapers may, however,
remain in force. [372C)
4. If, after such redetermination, it is foun4 that any of the petitioners
is liable to pay any deficit amount by way of duty, such deficit amount shaH be
paid by such petitioner within four months from the date on which a notice of
demand is served on. such petitioner by the concerned authority. Any bank
guarantee or security given by the petitioners shall be available for recovery of
snch deficit amounts. [3720]
5. If, after such redetermination, it is found that any of the petitioneis
is entitltd to any refund, such refund ·sha11 be made by the Government within
.. four months from the date of such redetetmination.
6. A writ shall issue to the respon<lents. f372F]
B.N. Tiwari v. Union of India & Ors., [1965] 2 S.c.R: 421, T. Devadasan
v. Union of India & Anr., [1964] 4 S.C.R, 680 and Firm
A.TB. Mehtab
Majid & Co. v. State of Madras & Anr. [1963] Supp. 2 S.C.R, 435 at 446. relied
on.
Mohd .. Shaukat Hussain Khan v. State of Andhra Pradesh, [1975) 1 S.C.R.
4~9, Shri Mulchand Odharji v. Rajkot Borough Municipality, A.I.R. 1970 S.C.
685, Kote11Mr Vittal Karnath v. K. Rangappa Baliga & Co., (1969] 3 S.C.R. 40
and The case of State of Maharashtra etc. v. The Central Provinces Mangan~
Ore Co. Ltd., [1977] I S.C.R. 1002, distinguis)led.
ORIGINAL JURISDICTION : Writ Petition Nos. 2656-60. 2935·40,
2941-46, '2947-52, 3402, 3467, 3595, 3600-03, 3608, 3632, 3653, 3661,
3821, 3890-93, 4590-93, 4613-15, 5222, 5576, 5600-02, 5726-27,
7410, 8459-62, 8825, 8944 of 1981, 1325 of 1982, 470·72 of 1984.
T.C. Nos.