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

(1985] :h.c,ll'~ implications of their action. It saould not be an .isolated · act on the part of some Ministry of some province. That wa~ the fundamental basis of our amendment ............. .. .................. ; ...................................If today all news- \ ,J,,· papers including those published from Delhi are opposing '• t > ;'-\ the imposition of these taxes with one voice and deman- i" ·.·1' . ding their inclusion in the Central· List, they do so, not because it is a question of saving some money, bnt be- cause the fundamental question of the liberty of the press is involved. By advocating their transfer to the Central Liilt we are prepared to run the risk of having these taxes ,, imposed in Delhi, and in other provinces which have not sought to imposi such taxes ·so far. But we do not want to leave it to the Provinces so that the liberty of the press remains unimpaired. We have faith in the Parliament : .we have faith in. the collective wisdom of the country ·and we have no doubt. that when this matter is viewed in the correct perspective, there will be no such taxes im- D posed on the newspapers, but we have not got that much faith in.the Provincial Miniskies. It is in that hope and having a full realisation of the situation that we have agr~d, as a matter of compromise, or should I say as a lesser evil, to have these two taxes transferred from the Pro'l!incial to the Central . List,'" (Vide Constituent . AS1embly Debates Vol. IX, pp. 1175-1180 'dated · Se'ptember 9, 1949).

Ultimately the power to levy taxes on the sale or purchase •i I of newspapers and on advertisement published , therein was I conferred oil Parliament by Entry 92 of List I of the Seventh Schedule to the Constitution. .This' shows the anxiety on the part of the framers of our Constitution to protect the newspapers against local pressures. But they; however, did not agree to provide any i::onstifutimial immunity against such taxation. 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 Sched.ule to the Constitution. • On the power of t e Government ill the United States of America to levy taxes on and to prov.ide for the licensing of news- papers, Corpus Juris Sequndum (Vol. 16) says at page 113~ as follows: ·

iNDiAN JiXP1ll!SS v.•tJNiON (Venkataramiah, J.) 327 · "213. (13), Taxing and Licensing A "The Constitutional guaranties of freedom of speech and of the press are subject to the proper exercise of the government's power of taxation, and reasonable license fees may b• imposed on trades or occupations concerned with the dissemination of literature or ideas . B - . " • As a general rule, the constitutional guaranties of freedom of speech and of the· press are subject to the proper exercise of the government's power of taxation, so • that the imposition of uniform and non-discriminatory taxes is not invalid as applied to persons or organisations c engaged in the dissemination of ideas through the J'Ublica- tion or distribution of writing. The guaranty of freedom of the press does not forbid the taxation of money or property employed in the publishing business, or the imposition of reasonable licenses and license fees on trades or occupations concerned with the dissemination of litera- D ture or ideas.

A license or license tax to permit the enjoyment of freedom of speech and freedom of press may not, however, be required as a form of censorship, and where the purpose of the tax or license is not for revenue, or for reasonable E regulation, but is a deliberate and calculated device to prevent, or to curtail the opportunity for, the· acquisition of knowledge by the people in respect of their governmental affairs, the statute or .ordinance violates the constitutional guaranties, and particularly the Fourteenth Amendment to the federal Constitution. While an ordinance imposing a tax on, and requiring a license for, the privilege of adver- tising by distributing books, circnlars, or pamphlets has been held valid_, an ordinance requiring the payment of a license tax by street vendors or p:dd]ers is invalid as applied to members of a. religious group distributing G religious literature as part of their activities, at least where the fee is not merely a nominal one imposed to defray the cost of regulation, notwithstanding the ordinance is non.discriminatory. A governmental regulation requiring a license ito solicit, for ~ompensation, memberships in organizations requiring the payment of dues is invalid, H

328 SUPREMB'COURT·ll!PORTS (1985] l s.c.ll ., where it fixes indefinite standa_rds for the granting of a A license to an applicant. A provision of a retail sales tax act providing that· a retailer shall not advertise as to the non-collection of sales tax from purchasers does not deprive retailers of the constitutional right of free speech." The above subject is summarised in American Jurispl'.lldence B 2d (Vol. 16) at page 662 thus :

"Speech can be effectively limited by the exercise of • that taxing power. Where the constitiltionalright to speak is sought to be deterred by a state's general taxing program; • due ·process demands that the speech be unencumber.ed c : until the state comes forward with sufficient proof to justify ·.. its inhibition. But constitutional guaranties are not violated by a statute the contr,Ollihg purpose of which is to raise revenue to help defray the current expenses· of state government and state obligations,· and which· shows no hostility to the press nor exhibits any purpose or design to -D restrain the press."

It may be mentioned here that the First Amendment to the ·Constitution of the United States of America is almost in absolute terms. ·It says that the Congress ·sl'iall make no I:iw abridging the freedom of the press. Yet the American Courts have recognised the power of the State to levy taxes on newspaper establish- ments, of course, subject to judicial review by courts by the applica- tion of the due process of law principle. ''Due process of law does not forbid all social control; but it protects personal liberty • against social control, unless such social contr61 is reasonable either because of a constitutional exercise of the police power, or of the powet offaxation or of the power of eminent domain". If any legislation delimiting personal liberty is held to be outside of all three of these categories, it is taking away of personal liberty without due process of law and is unconstitutionai. The police power, taxation and eminent domain are all forms of social control which .G are essential for peace, and good government. 'The police power is the legal capacity of the severeignty or one of its governmental • . agents; to· delimit i_the personal liberty of persons by means which bear a substantial relation to the end to be accomplished for the protection of social interests which ~easonably need protection. 81 Taxation is the legal capacity 6f sovereignty or one of its govern· • -','> •

"iNDiAN ExPRllSS v. UNION (Venkataramiah, !.) 329 mental agents to exact or· impose a charge upon persons or their prope~ty for the support of the government and for the payment for any other Public purposes which it may constitutionally carry out. Eminent domain is the legal capacity of sovereignty or one of its · governmental agents, to take private property for public use upon the payment of just compensation.' It is under the above said sovereign power of taxation the government is able to levy taxes on the publishers of newspapers too, subject to judicial review by courts ·1,, notwithstanding the language of the First Amendment which is absolute in terms. In India too the power to levy tax even on persons carrying on the business· of publishing newspapers has got to be recongnised as it i~ inherent in the very concept of gove~nment. But the exercise of such power should, however, be subject to · ; scrutiny by courts. Entry 92 of List I of the Seventh Schedule to the Constitution expressly suggests the existence of such power. ·

Thomas I. Emerson in his article on the First Amendment (The Yale Law Journal, Vol. 72 at p. 941, has made certain relevaD,t observations on the power of the State to impose taxes an.d economic regulations on newspaper industry. He says ; ·

"(a) Taxation and Economic·Regulation.

Regular tax measures, economic Tegulations, social welfare legislation and similar provisions may, of course, have some effect upon freedom of expression when applied to persons or organizations engaged in various forms of communication. But where the burden is the same as that borne by others engaged in different forms of activity, the similar impact on expression seems clearly insufficient to constitute an · "abridging" of freedom of experession. Hence a general corporate tax, wage and hour or collective bargaining legislation, factory laws and the like are as . applicable to a corporation engaged in newspaper publishing ' as to other business organisations. On the other hand, the use of such measures as a sanction to diminish the volume of expression or control its content would Clearly be aY imper- missible an "abridgment" as direct criminal prohibitions.· The line may sometimes 1'e difficult to draw, the more so as the scope af the regulation is narrowed.

Two principles for delineating the bounds of "abridg·

BUPll.EME COURT REPORTS. , · .[1985J 2 s.c.R, • ing'.' may b.e statQCI. ,First, as a general proposition the'vali- dity of the measure lll'Y be tested bY .the ru)e that it must · be equally applicable to a substantially larger .. group than that engaged in expression. Thus a special tax on the press alone, or a tax exemption available only to those with ... ' particular · political views or associations, would not be '

. permitted. Second, neither' the substantiPe nor procedural ... ·... provisions of the measure, even though framed in gene/fa/ t terms, may place any substantial burden on expression because of their peculiar impact in that .area. Thus the enforcement . of a tax or corporate registration statute by requiring ' disclosure of membership in an association.. where such <!isclosure would substantially impair freedom of expression, ' sl;tould be found to violate first amendment protection." (Underlining by us).

" . This view appears to ·have been accepted by our Secon<I Press C<lmmission in its Report (Vol. I) at page 35. The Commission , ! , ' \ .. oJ1roi:ves : ·~ - •, ~''·' ;• . "21. Economib and tax measures, legislation. relating to social welfare and wages, factory laws, etc., may have some effect 'upon freedom' of the Press when applied to persons or institutions engaged in various forms . of communication. But where th! burden placed on them is the same as that .borne by other engaged in different forms of activity, it does not constitute abridgment of freedom ' of the Press. The use of such measures, however, to oontrol ' the 'content' of expression would be clearly impermissible." • . I~ Alice Lee Grosjean, Supervisor of Public Accounts for the !I ,C .-State of. Louiiiana v. American Press CompanY(1) in which the .,. ·'.- ,. ' ;iippellants had questioned the constitutiqnal validity of an Act of i ' J;oi!i.$iana' which required every person engaged in the business of ~

' selling or making, any charge for, advertising or for advertisements, • ' printed or published in any newspaper, periodical etc.· having a . mrculatio.n of more than 20,000 copies per week to pay, in addition ' 'to at.I other ·taxes, a· Iicen.se tax for privilege of engaging in such I .busin~lis ln the Sta~e of Louisiana of two per cent (2%) of the gross :.;r~ts of81lch business, the Supreme Coui:t of the. United States ; oblerved at pages 668-669 : :, . (l) 297 U.S. 233 : 80 L. ed. 660.

INDIAN EXPRliSS v. UNION (Venktitaramiah, J.) 331 "In the light of all that has now been said, it is evident that the restricted rules of the English law in respect of the freedom of tbe press in force when the Constitution was adopted werenever accepted by the American colonists; and that by the First Amendment it was meant to preclude the national government, an!l by the Fourteenth Amendment to preclude the states, from adopting any form of previous restraint upon printed publications, or their circulation, including that which hacl theretofore been effected by • these two well known and odious methods ..................... .

· It is not intended by anything we have said to suggest that the owners of newspapers are immune from any of the ordinary forms Qf taxation for suppprt of the government. --( .. But this is not an ordinary form of tax, but one single in kind, with a long history of hostile misuse against the freedom of the press.

The predominant .purpose of the grant of immunity here invoked was to preserve an untrammelled press as a vital source of public information. The newspapers, .-'\.. ' ina&azines and other journals of the country, it is safe to say,. have shed and continue to shed, more light on the public and business affairs of the nation than any other J instrumentality of publicity; and since informed public opinion is the most potent of all restraints upon misgovern- . ment, the suppression or abridgment of the publicity afforded by a free press cannot be regarded otherwise than with grave concern. The tax here involved is bad not because it takes money from the pockets of the appeilees. I If that were all, a wholly different question would be • presented. It is bad because, in the light of its history and of its present setting, u is seen to be a deliberate and calcula- ted device in the guise of a tax to limit the circulation of .· information to which the public is entitled in virtue of the constitutional guaranties. A free press ··stands as one· of the great interpreters between the government and the people. To allow it to be fettered is to fetter ourselves." (Underlining by us) ' The ·levy imposed by Louisiana was quashed by the. Sap;eme f,

'3,32 SUPREME COURT llBPORTS (1985] 2 s.c.il. \ · Con.rt· of the United States of America in the above case on the gt'Qund that it violated the First Amendment to the Constitution of ,tho' United States of America sine~ it was of the view that the tax . ' 'tevied in this ease was a device :to limit the circulation of informa- tion. tile eo'urt, however, did n~t say that no tax could be levied '' on.the press in any event. ' 'f'~·.·· ·In Robert Murdock, Jr. v. Commonwealth of Pennsylvania ····'(City of Jeannette)(1l the Supreme Court of the United States of .,,:, ' America declared, as unconstitutional and violative of the First • ··.Amendment to the Constitution of the United States of America ·\which guaranteed freedom of spe,ech and expression, an ordinance "- which imposed. a licence tax on persons canvassing for and soliciting within the city of Jeannette orders for goods, paintings, pictures, wares or merchandise of any kind or persons delivering such articles . under .orders so obtained or solicited. The .·petitioners in that case , were 'Jehovah's witnesses' who went about from door to door in the city of Jeannette distributing literature and soliciting people to ' . pµrchase certain religious books and pamphlets. None of them obtained a licence· by paying the prescribed fee and they were '' . convicted for violating the Ordinance by the Superior Court of - ';•,

·Pennsylvania. The Supreme Court of the United States of America quashed the conviction holding that the Ordinance violated the ,f· First Amendment Douglas, J. who wrote the majority opinion · ol)served at pages 1299 and 1300 thus: "In 111l of these cases the issuance of the permit or · license is dependent on the payment of a license tax. And the license t(lx isfi)Ced in amount and unrelated to the scope of the activities ofpetitioners or to their realized revenues. It is not a nominal fee imposed as a r~gulatory measure ,to defray the expenses of policing the activities in question'. It is in no way apportioned. It i.s a flal'license tax levied and collected as a condition to the pursuit of activities whose enjoyment is guaranteed by the First Amendment. Accordingly, it restrains in advance those constitutional liberties of press and religion and inevitably tends to suppress their exercise. That is almost uniformly recog- nised as the inherent vice and evil of this flat license tax ............ . ...... •'. f . • ,i

'(1} 319'u.s. 105 : 87 Law. ed. 1292.

INDIAN EXPRESS v. UNION (Venkataramiah, J.) 333

The fact that the ordinance is "nondiscriminatory" A is immaterial. The protection afforded by the First Amendment is not so restricted. A license tax certainly does not acquire constitutional validity because it classifies the privileges protected by the First Amendment along with the wares and merchandise of hucksters and peddlers and treats them all alike. Such equality in treatment does B not save the ordinance. Freedom of press, freedom Qf speech, freedom of religion are in a preferred position," (Underlining by us).

Justice Reed who dissented from the majority observed at page 1306 thus: c "It will be observed that there is no suggestion offreedom from taxation, and this statement is equally true of the other State constitutional provisions. It may be concluded that neither in the state or the federal constitutions was general taxation of church or press interdicted.

Is there anythiag in the dt1i1iens of this Court which indicates that church or press is free from the financial burdens of government ? We find nothing.. Religious societies depend for their exemptions from taxation upon state constitutions or general statutes, not upon the Federal Constitution. Gibbons v. District of Columbia, 116 US 404, 29 L ed 680, 6 S. Ct 427. This Court has held that the chief purpose of the free press guarantee was to prevent previous restraints upon publication. Near v. Minuesota 283 US 697, 713, 75 L ed 1357, 1366, 51 S Ct 625. F In Grosjean v. American Press Co., 297 US 233, 250, 80 L ed 660, 668, 56 S Ct 444; it was said ·that the predo- minant purpose was to preserve "an untrammelled press as a vital source of public information." In that case, a gross receipts tax on advertisements in papers with a .. circulation of more than twenty thousand copies per week was held invalid because a deliberate and calculated device G

m . of a t ax to 1·1m1t . th e guise ..the circulat1on . . ................... "

There was this further ~omment : I •

"It is not intended by anything we have said to suggest u

.\-f' -_\ :~:~ ·w~x;:=~~:"r~*·~i.~~~i~~ >,~~~ .... ( '.~

334 SUPREME CO!IR'I: REPORTS [19S5J 2 s.c,1.

'A that the owners of newspapers are immune from any of the ordinary forms of taxation for support of the government. But this is not an · ordinary form of tax, but one single in kind, with a long history of hostile misuse against the freedom of the press." Id, 297 US 250, 80 L ed 668. 56 S Ct.444. It may be said, however, that ours is a too narrow, technical and legalistic approach to the problem of state ·taxation of the activities of church and press; that we should look not to the expressed or historical meaning of • '· · the First Amendment but to the broad principles of free speech and free exercise of religion· which pervade our. national way of life. It may be that the Fourteenth Amendment guarantees these principles rather than the .. , more definite concept expressed in the First Amendment This would mean that as a Court, we should determine what sort ofliberty it is that the due process.clause of the Fourteenth Amendment guarantees against state restrictions on speech and church ......... ,

Nor do we understand that the Court now main· tains that t):te ·Federal Conatitution frees press or religion of any tax except such occupational taxes as tl:uise here levied. Income taxes, ad valorem taxes, even occupational taxes are presumably valid, save only a license tax on sales of religious books, Can it be that the Constitution permits a tax on the pfinting presses and the gross income Of a • metropolitan newspaper but denies the right to lay an occupational tax on the distributors of the same papers 7 f Does the exemption apply to book sellers or distributors of magazines or only to religious publications ? And, if , . th.e Jatter, to what distribµtors 7 Or to. what books? Or is this Court saying that a religious practice of book distribution is free from taxation because a state cannot G a prohibit the "freee exercise thereof" and newspaper is subject to the same tax even though the'\ame Constitu· tional Amendment says the state cannot abridge the freedom of the press ? It. has never been thought before that .freedom from taxation was a perquisite attaching to the privileges of the First Amendment,"

/.1 8 Justi<;e Reed all\!ed at pa$es B07 an\! 13(>8 th11s :

INDIAN EXPPRESS v. UNION (Venkataramiah, J.) 335

"It is urged that such a tax as this may be used readily to restrict the dissemination of ideas, This must be conceded but the possibility of misuse does not make a tax unconstitutional. No abuse is claimed here. The ordina- nces in some of these cases are the general occupation license type covering many businesses. In the Jeannette prosecutions, the ordinance involved lays the usual tax on canvassing or soliciting sales of goods, wares and merchan- dise. It was passed in 1898. Every power of taxation • or regulation is capable of abuse. Each one, to some extent, prohibits the free exercise of religion and abridges the freedom of the press, but that is hardly a reason for denying the power. I/ the tax is used oppressively the law c • will protect the victims of such action." (Underlining by us.) Justice Frankfurter who also dissented from the majority observed at pages 1310 and 1311 thus : D "It cannot be said that the petitioners are constitu- tionally exempt from taxation merely , because they may be engaged in religious activities ot because such activi- ties may constitute an exercise of a constitutional right, ......... E Nor can a tax be invalidated merely because it falls upon activities which constitute an exercise of a_ consti- tutional right. The First Amendment of course protects the right to publish ~ newspaper or a magazine or a book. But the crucial question is-how much protection does the Amendment give, and against what is the right protected ? It is certainly true that the protection afforded the freedom of the press by the First Amend- ment does not include exemption from all taxation. A tax upon newspaper publishing is not invalid simply because it falls upon the exeacise of a c9nstitutional right. Such a tax might be invalid if it invidiously singled out newspapers publishing for bearing the burdens of taxation or imposed upon them in such ways as to enc~oach on the essential scop~ of a free press. Tf the Court could justi- fiably hold that the tax measures in these cases were Vulner- able on that ground, I would unreservedly agree, But the H

336 SUPRBME COUllT REPORTS [1985] 2 s.c.R.

Court lias not done so, and indeed could not," (Under- lining by us)

In the above case it may be noticed that Douglas, J. who "i gave the majority opinion did not say that no tax could be levied at all on a press, but he did not approve of a uniform license B tax unrelated to the scope of the activities of the persons who had to beat it. The dissenting opinions have- clearly &lated that the press does not enjoy any immunity from taxation. They, however,-say that the taxation. should not encroach upon the • essential scope of a free press.

c We may usefully refer here to a passage in the foot note given below the Essay No 84 by Alexacder Hemilton in 'The • Federalist'. it reads :

"It cannot certainly be pretended that any degree of duties, however low, would be an abridgment of the liberty of the press. We know that newspapers are taxed in Great Britain, and yet it is notorious that the press nowhere enjoys greater liberty than in that country. And if duties of any kind may be laid without a violation of of that liberty, it is evident that the extent must depend ' )- on legislative discretion, regulated by public opinion ;" E )'.

At this stage we find it useful to refer to a decision of the Privy Council in Attorney General & Anr. v. Antigua Times Ltd.(1) Where the Judicial Committee of the Privy Council was called upon to decide about the validity of the imposition of a licence fee of $ 600 annually on the publisher of a newspaper under the News· ' papers Registration (Amendment) Act, 1971. Section 10 of the Constitution of Antigua read as follows :

"10. (1) Except with his ·own consent, no person shallbe hindered in the enjoyment of bis freedom of ex- pression, and for tho purposes of this section the said freedom includes the freedom to hold opinions and to • receive and impatt ideas and information without inter- ference, and freedom from interference ·with his corres- pondence and other means of communication.

l-J (J). [1975) 3 All B.R. 81

INDiAN BXPRESS v. UNION (Venkataramlah, J.) 337 (2) Nothing contained in or done under the autho· rity of any law shall be held to be inconsistent with or in contravention of this section to the extent that the law in question makes provision-·-(a) that is reasonably' requi- red - (i) in the interests of defence, public safety; public order, public morality or public health ; or (ii) for the purpose of protecting the reputations, rights and freedoms B of other persons, or the private lives of persons concerned in legal proceedings, preventing the disclosure of infor- • mation received in confidence, maintaining the authority and independence of the courts, or regulating telephony, telegraphy, posts, wireless, broadcasting, television or ' c .. other' means of commu11ication, public exhibitions or public entertainments ; or (b) that imposes restrictions upon public officers."

Lord Fraser who delivered the judgment of the Privy Council upheld the levy of the licence fee as being reasonably required in the interests of defence and for securing public safety D. etc. referred to· in section 10 (2) (a) (i) of the Constitution of Antigua, The learned Lord observed in that connection ' thns :

"'Revenue requires to be raised in the interests .of -'\. ' defence and for securing public ,safety, public order, public El morality and public health and if this tax was reasonably required to 'raise revenue for these purposes or for any· of them, then S. IB is not to be treated as contr1ivening the Constitution.

In some cases it may be possible for a court to decide from a mere perusal of an Act whether it was or was not F /' :. reasonably required. In other cases· the Act will not provide the answer to that question. In such.· cases has evidence to be brought before the court of the reasons for the Act and to show that it was reasonably required ? Their Lordships think that the proper approach to the G question is to presume, until the contrary appears or is shown, that all Acts passed by the Parliament of Antigua were reasonably required. This presumption will be rebutted if the statutory provisions in question are; to. use · the- words of Louisy J, 'so arbitrary as to compel the concJuSion t!Jat it·· does not involve a:n exertion of th H

.·~ . 338 SuPRBMll COURT REPORTS (1985] 2 S.0.R, 'lt.. taxing power but constit,utes in substance arid effect the 'r' ' ·direst execution of a different· and forbiddden. power.' If the , amount of the licence fee, was so mamfestly excessive as to lead to the conclusion that the real reason 'for ii~ imposition was· not 'the raising of revenue but the preventing of the publication of newspapers, then that. would .just/fy the conclusion that ,the law was not reasonably ~equired for the raising qf revenue.

;· In there Lordships' opinion the presumption. that ' .. '· . the newspapers Registration (Amendment) Act, 197l' was reasonably required has not been reputted am:t they do c not regard the amount of the licence fee as nian.ifestly a excessive and of such character as to lead to the con- clusion that S. IB was not enacted ·to raise revenue but fo.r some other purpose.'' (Underlining by us) Here again it is seen that the Privy council was of the vjew that th~ Jaw did .not forbid. the l~vy of fee on the publisher. or' a 11ewspaper but it would be qpen to challenge if the real reason for its imposition was not the raising of revenue but the preventing of the publication of newspaper. At this .stage it is necessary to refer to a forceful . argUment addresse!l: before us. It was urged on behalf of _the pefitiOners that the £~cognition of the power of the Government to levy taxes of any kind on die newspap~r establishments would ring in the • death-knell of the freedom of press and would be totally against .,._. . the spirit pf the .Constituti9.I\. It is, contended that the Govern: F ment Is likely to use it to make the press subservient to the 1'" Government, It is argued that wben once this power is. conceded, newspapermen will have to run a~er the Government an<! hence it ought not to be done. This raisi:s a philosophical question- Press versus Government. We do not think it is necessary for ~

.. ·i the press to be subservieµt to the Qovernment. As long as 'this I

Court sits' newspapermen need not have the fear of their freedom G being curtailed by unconstitutionlll means. It is, however, good • !' to remember some statements made in the past by some . wise.. men connected with newspapers in order to develop the culture of an independen1 press. Hazlitt advised editors to stay in their garrets and avoid exposing themselves to the sub-Jeties of .power, Walter H Lippman in his address to the International Press Instiute some ·' '•

INDIAN EXPRESS. v. U~ION (Venkatar,amiah, J.) 339 years ago said that the danger to the independence and integrity of journalists did not come from the pressures that might A . .J. be put on them ; it was that they might be captured and capiti- ' vated by the company they keep. Arthur Krock after 60 yeats of experience said that it 'is true that in most cases, the price of friendship with a politician is so great for any newspaperman to pay'. A. P. Wadsworth of the Manchester Guardian said "that B no editor should ever be on personal terms with our leaders for +.. fear of creating· a false sense of relation of confidence." James Margach says that 'when leading media figures see too much rather than too little of Prime Minister that the freedom of press is endangered.' Lord Salisbury told Buckle a famous editor in England "you are the first person who has not come to see me in c the last few days who is not wanting something at my ,hands- place or decoration or peerage. You only want information." Charles Mitchell wrote in 'Newspaper Directory'. The Press has row so great and so extensive an influence on public opinion ....... that ....... .'.... its conductors should be GENTLEMAN in the true sense of the word. They should be equally above corruption and 0 intimidation incapable of.being warped by personal consideratiohs from the broad path 0£ truth and honour ; superior to all attempts at mis'representing or mystifying public events'. If the press ceases to be independent the healthy influence of the press and public opinion will soon be substituted by the traditional influ- ences of landlordism and feudalism. The press lords should endeavour to see that their intere~t do not come into conflict with their duties. All this is said only to show that Government alone may not always be the culprit in destroying the indepen- dence Qf the press. Be that as it may, it is difficult to grant that merely because the Government has the power to levy taxes the freedom of press would be totally lost. As stated earlier, the court is always there to hold the balance even and to strike down any unconstitutional invasion of that freedom.

• Newspaper industry enjoys two of the fundamental rights, nathely'the freedom of speech and expression guara'nteed under Article 19 (I) (a) and the freedom to engage in any pr<ifession, ' ' ~ . occupation; trade, industry or busin'ess guaranteed under Article 19 (I) (g) of the Constitution, the first because it is concerned with the field of expression and communication and the second because communication has become an occupation or profession and because there is on invasion of trade,' business an.d industry

-' 340 SuPlutME COtlRdUJPQll.tS tl985) 2 s.c.11. . :futo that°' field where freedom--.of expression., is being· exercised. While there,can be _no tax on the rignt to exerzise freedom of .;. .· . .expression, tax is leviable on pro{ession, occupatioµs trade, busi- ness and industry. Hence tax is. leviable on newspaper industry. llut when_ such tax transgresses into the field of freedom of· .expression and stifles that freedom, it becomes unconstitutional. As long as it is within reasonable limits and does not impede B freedom of expression it will not·be contrve1;1ing the limitations of ~rticle 19 (2). The delicate task of determining 'w)len it crosses from the area of professiqn, occ:1pation, trade, business or industry into the area of freedom of_ expression and interferes with • that freedom is.imtrusted to the courts. 'The petitioners, however, have placed strong reliance on the Sakai's case (supra) and the Bennett Coleman's case (supra) · in support of their case that any tax on newsprint which is the most important component of a newspaper is unconstitutional. They have drawn our attenti9n to the following passage in the D _decision in Sakai's case (supra) which is at page 863 :

" It ·may well be within the power of the sfate to place, in the interest of the ·general public, restrictions upcm the right of a cit/zen to carry on business but it is . not open to the Stale to achieve this object by directly E ·and immediately curtailing any other freedom of that citizen guaranteed by the Cimstitution and which is not susceptible of abridgement on the same grounds as are set out in cl. (6) of Art. 19. Therefore, the right of • fteedom of speech cannot be taken away with the obj~ct ' '',' of placing restrictions on· the business activities of a F citizen. l<'reedom of speech can be restricted only. in the. interestsof the security 1of the State, friendly relations with foreign State, pubTfo order, decency or morality or in ,relation to contempt of court, defamation or in- 'citemeht to an offence_. It ·cannot, like the freedom to carry on business, be curtailedin the interest of the general G public•.. If a law directly affecting it is challenged it is no answer that the.restrictions enacted _by it are justifiable und~r els, (3) to (6): Fof, the scheme of Art. -19 is to enu- merate different freed~ms. seearately apd then to spe'lify the e~tent of restrictions to wl;tich they 1nay ,be subjects and· the object for seciirina which this could be done. A citizen

INDIAN EXPRESS v. :UNION (Venkalaramiah, J.) 341 is entitled to enjoy each and every one of the ft'e~doms together and cl. (I) does not prefer one freedom to another. That is the plain meaning of this clause. It follows from this that the State cannot make a law which directly restricts one freedom even for securing the better enjoyment of another freedom. All the greater reason, therefore, for holding that the State cannot directly restrict one freedom by placing an otherwise permissible restriction another freedom."

In Bennett Coleman's case (supra) the question which arose for consideration related to the validity of a restriction imposed under the newsprint policy which had certain objectionable features such c as '(i) tbat no newspaper or new edition could be started. by a common owner-ship unit even within the authorised quota of news- • print (ii) that there was a limitation on the maximum number of pages, no adjustment being permitted between circulation and ·pages so as to increase pages, (lii) that a big newspaper was prohi- bited and prevented from increasing the number of pages, page area, and periodicity by reducing circulation to meet the require- ment even within its admissible quota etc.. The majority held that the fixation of page limit had not only deprived the petitioners of their economic vitality but also restricted their freedom of ex- pression. It also held that such restriction of pages resulted in reduction of advertisement revenue and thus adversely affected the capacity of a newspaper to carry on its activity which is protected by Article 19(1)(a) of the Constitution. '

We have carefully considered the above two decisions. In the first case the Court was concerned with the newspaper.price-page policy Jj' and in the second the newsprint policy imposed by the Government had been challenged. Neither of them was concerned with the power of P-arliament to levy tax on any goeds used by the newspaper industry. As we have observed earlier taxes have to be levied for the support of ' the Government and newspapers which derive benefit from the public expenditure cannot disclaim their liability to con tribute a fair and G reasonable amount to the public exchequer. What may, however, have to be observed in levying a tax on newspaper industry is that it should not be a over-burden on newspapers which constitute the Fourth Estate of the country. Nor should it single out news- paper industry for harsh treatment. A wise administrator should realise that the imposition of a tax like the customs duty on IJ

_, -· 1)~f+-::~yo:c~-··if ,/"

', ,342 SUPIEME ,COt)R'J' il;PORTS '\ [1985] 2 s.c.R. newsprint is an imposition on knowle9ge and would virtually amount to a burden imposed on a man for being literate and for being conscious of his duty as a citizen to .inform himself about the world around him. 'The public interest in freedom of discussion (of which the freedom of the press is one aspect) stems from the requirement that members of a democratic society should be sufficiel).tly informed that they may . influence intelligently the decisions wjlich may affect .themselves'. (Per Lord Simon of Glaisdale in Attorney General v. Times, Newspapas('). Freedom of expression, as learned writers have ·observed, has four broad ' social purposes to serve : (i) it helps an individual to attain self fulfilment, (ii) it assists in the discovery of truth, (iii) it strengthens • · the capacity of an ipdividual in participating in decision-making 0 · and (iv) it provides a mechanism by which it would be possible to . establish a reasonable balance between stability and social change. I All members of society should be able to form their own beliefs • and communicate them freely to others. In sum, the fundamental principle involved here is the people's right to know. Freedom of · speech and expression should, therefore, receive a generous support from all those who believe in the participation of 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 IllOre cautious while levying taxes on other matters concerning newspapers industry than while levying taxes on matters. It is true that this Court has adopted a liberal appr,oach while dealing with fiscal measures and has upheld different kinds of ' taxes levied on property, business, trade and industry as they were found to be in the public interest. But in the cases before us the • Court is called upon to reconcile the social interest involved in the freedom of speech' abd expression 'With the public interest involved in the fiscal levies imposed by the Government specially because .f newsprint constitutes the body, if expression happens to be the soul. ' . .. ·In view of the intimate connection of newsprint with the freedom of the press, the tests for determining the vires of a statute • • G taxing newsprint ·have, therefore, to be different from the tests usually adopted for testing the'Vires of other taxing statutes. fa the case ·of ordinary taxing statutes, the laws may be questioned only if they are either openly confiscatory or a colourable device to confiscate. On the other hand, in the case of a tax on newsprint,

11 . (I) (1973) 3 AU. E.R. 54

INDIAN EXPRESS v. UNION (Venkataramiah, J.) 343 it may be.sufficient to show a distinct and noticeable burdensome- ness, clearly and directly attributable to the tax. A ,.\__, While we; therefore, cannot agree with the contention that no tax can be levied on newspaper industry, we hold that any such levy is subject to review by courts in the I igb t of the provisions of the Constitution. v ..8 Are the impugned notifications issued undes section 25 of the Customs Act, 1962 beyond the reach of the Adminis· trative Law. It is argued on behalf of the Government that a notification issued under section 25(1) of the Customs Act granting, modifying or withdrawing an exemption from duty being in the nature of a c piece of subordinate legislation, its validity cannot be tested by • the Court by applying the standards applicable to an administra- tive action. Reliance is placed on the decision of this Court in Narinder Chand Hem Raj & Ors. v. Lt. Governor, AdminMrator. Union Territory, Himachal Pradesh & Ors. 11) in support of the above D; contention. In that case the appellants were wine marchants carry- ing on business in Simla. At the auction held for the purpose of granting the privilege to sell the Indian made foreign liquor the appellants were the highest bidders. It appears that before the auction was held the Collector of Excise and Taxation had announ- ced that no sales tax would be liable to be paid on the sale of liquor and despite this assurance the Government had levied and collected from the appellants a certain amount by way of sales tax. The appellants prayed for the issne ofa writ to the Governments restrain- ing them from levying any sales tax and to refund what had been recovered from them by way of sales tax already. It was contended on behalf of the Government of Himachal Pradesh that non-collection of sales Tax possible only on the' issue of a notification by the Govern- ment pursuant to its statutory power under the Plflljab General Sales Tax Act, which was in force in the area in question shifting .• 'liquor' which was in Schedule 'A' to Schedule 'B' to the Punjab General Sales Tax Act, and that such a notification could not be issued because the Central Government had not given its requisite approval. Hence it was urged by the Government that since sales tax had been imposed by law on all items in Schedule 'A' it could not ' disobey the mandate of law. It further contended that the Court could not issue a mandamus to the Government to issue a notifica- tion to amend the Schedules to the statute as the act of issuing, such a notification was a legislative act and no writ could be issued to a

344 . SuPUMI! COURT RSPORTS [1985] 2 s.c.R. legislative body or a subordinate Legi,slative body to a· make a law '"'A or to issue a notification, as the case may be; which would have the effect of amending a law in force. This Court upheld the contention of the Government. The Court said:

"Our attention has not been drawn to any' provision in that Act empowering the Government to exempt any assessee from payment of tax. Therefore it is clear that appellant was liable to pay the tax imposed under the law, What the appellant really wants is a mandate from the court to the competent authority to dele.te the concerned entry from Schedule A and include the same in Schedule B. We shall not go into the question whether the Government of Himachal Pradesh on its own authority was competent to make the alteration in question or not. We shall assume I· for our present purpose that .it had such a power. The. power to impose a tax is undoubtedly a legislative power. That power can .be exercised by the legislature directly or . subject to certain conditions, the legislature may delegate the power to some other authority. But the exercise of that po:.ver whether by the legislature or by its delegate is an exercise of a legislative .p9wer. The fact that the p.ower was delegated to the executive does not convert that power into an executive or administrative power. No Court can issue. a mandate to a legislature to enact a particular law. Similarly no court can direct a subordinate legislative body ·to enact or not to enact a law which it may be competent to enact. , The relief as framed by the appellant in his writ petition does not bring out the real issue calling for deter- ' . mination. In reality he wants this Court to direct the Government to delete the entry in ques.t,ion from Schedule A and include the same in s'chedule B. . Art. .265 of the Constitution lays down that no tax can be levied' and collected except by authority oflaw. Hence the levy of a tax can only be done by the authority of .law and not by ' any executive order. Unless the executive is specifically empowered by law to five any exemption it cannot say that it will not enforce tfle /aw as against a particular person. No court can· give a direction to a Government to refrain from enforcing a provision oflaw. Under these circum- . ·stances, we-,must held that the relief asked for by the appel· latn cannot be granted." (Underlining by us)

INDIAN EXPRESS v. uNiON (Venkataramiah, J.) 345 The above decision does not in fact support the contention of the Government in the cases before us. It is noteworthy that the A Court in the passage extracted above bas made a distinction between the amendment of the Sch'edule to the PunjabGeneral Sales Tax Act by the issue of a notification by the Government of Himachal Pradesh in exercise of its power delegation by the legislature and the power of that Government to grant exemption under a power to grant exemption. In the present cases we are concerned with a power to grant exemption conferred on Government by section 25 of the Customs Act, 1962 and not with a power to amend the Act by means of a notification. Moreover this was just a case relating to business in liquor..

We shall assume for purposes of these cases that the power .. to grant exemption under section 25 of the Customs A<:t, 1962 is a legislative power and a notification issued by the Government there- under amounts to a piece of subordinate legislation. Even then the notification is liable to be questioned on the ground that it is an unreasonable one. The decision of this Court in MuniCipa/ Corpora- D tion of Delhi v. Bir/a Cotton, Spinning and Weaving Mills, Delhi & Anr.(1 ) has laid down the above principle. In that case Wanchoo, C.J. while upholding certain taxes levied by the Corporation of Delhi under section 150 of the Delhi Municipal Corporation Act, 1957 observed thus :

"Finally there is another check on the power of the Corporation which is inherent in the matter of exercise of power by subordinate public representative bodies such as municipal boards. In such cases if the act of such a body in the exbrcise of the power conferred on it by the law is unreasonable, the courts can hold that such exercise F is void for the unreasonableness. This principle .was laid

. ." ' down as far back as 1898 in Kruse v. Johnson [1898] 2. Q.B.D. 91"

But it appears that the principle enunciated in Kruse v. Johnson (2) is not being applied ~o stringently in England now. G

A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a com·

(I) [196813 s.c.R. 251. (2) [1898) 2 Q.B.D. 91.

~46 BtlPRl!MJ!.,COURT' REPORTS ,, j [1985] 2 S.C.R. . petept legislature. Subordinate legislation may be questioned A on any of the grounds on which plenary legislation is questioned. In addition it may also be questipned on the ground that it does not conform to the statute und~r which it is .made. It may further be ,,gll!!stioned on the ground that it is contrary, to some other· statute. th~t is because subordinate legislation must yield to plenary legislation. It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not beiug reasonable, but in the sense that it is manifestly arbitrary. In England, the judges would say "Parliament never inten.ded authority to make such rules. They are unreasonable arid ultra vi res". The present position of law bearing on the above point is stated by Diplock, c L.J. in Mixnam Properties Ltd. v. Chertsey U. D.C.(l) thus: ''The various grounds upon which subordinate legisla- tion has sometimes been said tc{be void ......... can, I think, today be properly regarded as being particular applications of the general rule that subordinate legislation, to be valid D must be shown to be within the powers conferred by the statute. ,Thus the kind of unreasonableness which invali· · dates a by-law is not the antonym of 'reasonableness' in is the sense of which tlrnt expression used in the common law, but such mainfest arbitrariness; injustice or partiality that a court would say : 'Parliament never intended to· give authority to make.such rules : they are unreasonable and · ultra vires .... ' lf the courts, can declare subordinate legislation to be invalid for 'uncertainty,' as distinct from unenforceable ... this must be beca\)Se Par!iment is to be presumed not to have intended Jo a,uthorise the subordinate F. legislative authority to ma~e changes in the existing law · which are uncertain ....."

Prof,, Alan Wharam in his Article entitled 'Judicial Control of Delegated Legislation : The Test of Resonabfeness' in 36 modern Law Review till at pages 622-23 has summarised the ' ' ' G present position in Eng)and 81 follows : "(i) It is possible ijuit lhe courts might invalidate a statutory instrument on the grounds of unreasonab~eness , . or uncertainty, vagueness or aribitrariness; but the writer's . "

(1) (1964] I Q.B. 214.

INDIAN EXPRESS v. UNION (Venkataramiah, J.) 347 view is that for all practical purposes such instruments must be read as forming part of the parent statute, subject A only to the ultra vires test.

(ii) The courts are prepared to invalidate by-laws, or· any other form of legislation, emanating from an elected, representative authority, on the grounds of unreasonable· B ness uncertainty or repugnance to the ordinary law ;. but they are reluctant to do so and will exercise their power only in clear cases.

(iii) The court,s may be readier to invalidate by-laws 0 passed by commercial undertakings under statutory ' power, although cases reported during the present century 'suggest that the distinction between elected·' authorities 'and commercial undertakings, as explained in Kruse v. Johnson, might not now be applied so stringently.

(iv) As far as subordinate legislation of non-statutory D origin is concerned, this is virtually obsolete, but it is clear from In re French Protestant Hospital (1951] ch. 567 thadt wollld be subject to strict control." (See also H.W.R. Wade: Administrative Law (5th Edn.) pp. 747-748).. E

In.India arbitrariness is noJ a separate ground since it will come within the embargo of Article 14 of the Constitution. In India any enquiry into the vires of delegated legislation must be confined to the grounds on which plenary legislation may be questioned, to the ground that it is contrary to the statute under which it is made, to. the ground that it is contrary to other statutory provisions or that it is so arbitrary that it could .not • be said to be in conformity with the statute or that it offends Article 14 of the Consttiution.

That subordinate legislation cannot be questioned on the ground of violation of principles of natural justice on which ad- ministrative action may b.e questiorred has been held by this Court in The Tulsipur Sugar Co. Ltd. v. The Notifi_ea' Area .Committee, Tulsipur(1l,' Rame<hchandra Kachardas Porwal & Ors; v, State of

(I) (1980] 2 S,C.R. till. H ' . ,,

• 34g SUPREME COURT REPORTS · (1985] 2 s.c.a. ' .Maharashtra & Ors. etc( and in Bates v. Lord Hai/sham. of St' 1).

Marylebo11e & Ors(').· A distinction must be made between · •'de1egation of a legislative function in the case of which the ques· tion of reasonableness cannot be enquired into and the investment by statute to exercise particular d.iscretionary po)Vers. In the .latter case the question may be consid.ercd on all grounds on .,. B wl1ich administrative 'action may be . quest.ioned, such as, non· application of mind,. taking irrelvant matters into consideration, failure to tlllce relevant matters into considel'a.tion, etc. etc. On the facts and' circumstances of a case, a sub~rdinate legislation be may struck down as arbitrary or contrary to statute if it fails to .' take into account very vital facts which either expressly or by . c' 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·.· consti- tutional requirements or that it .,offends Article 14 or Article 19 (\) (a) of the Constitution. It cannot, no doubt, be done merely on the ground that it is not reasonable or that it has not taken into account relevant circumstances which ·the Court considers relevant.;

W• do not, therefore,'find much substance, in the contention that the coµrts cannot . ai all exercise judicial control over the impugned notifications. In cases where the power vested in' the IL Goyerriment is a power which has got to be exercised iri the public interest, as it happens 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 sectidn 25 (1) of the Cnstoms Act, 1962 F is .required to be laid before Parliament under. section 159 there- of does· not make any svbstantial difference as regards the juris- diction of the court to pronounce on its validity. l'he power to grant exemption should, however, be exercised in a reasonable way. Lord Greene M.R. has explained in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpo- G ration(•) what a 'reasonable way' means as follows : • "It is true that discretion must be exercised reason· ably. Now what does that mean 1 Lawyers familiar with (l),Il981) 2S.C.R.-866· (2).[1972) I WLR 1373• .. ·. (3) (19-48l l K.JI. µ~.

INDIAN EXPRESS v. UNION (Venkataramiah, J.) 349 the phraseology used in relation to exercise of statutory A discretions often use the word 'unreasonable' in a rather comprehensive sense. Ithas frequently been used and is frequently used as a general description of the things that must not be done, For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention 8. to the matters which he is b'ound to consider. He must exclude from his consideration matters which are icrele· vant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said to be acting'unreasonably'. Similarly, there may be some- thing so absurd that no sensible person could ever dream c that it lay within the powers of the authority. Warrington L..f. in short v. Poole Corporation [1926] Ch. 66 gave the example of the red-haired teacher, dismisse~ because she had red hair. This is unreasonable in one sense. In, another it is so unreasonable that it might almost be described as being done in bad faith ; and, in fiict, all these things run into one another."

Hence the claim made on behalf of the Government that the impugned notifications are beyond the reach of the adminis- trative law cannot be accepted without qulification even though all tlie grounds that may be urged against an administrative order may not be available against them.

Now, the notifications issued on March 1, 1981 and Feb- ruary 28, 1982 under section 25 of the ~ustoms Act, 1962 which grant exemptions from payment of certain duty beyond what is mentioned in them are issued by the executive Government. They were issued in substitution of earlier notifications which had granted total exemption. Such notifications have to be issued by the Government after taking into consideration all relevant factors which bear on the reasonableness of the levy on the news- G print. The Government should strike a just and reasonable , balance between the need for ensuring the right of people to free- dom of speech and expression on the one hand and the need to impose social control on the business of publication of a news- paper on the other. In other words, the, Government must at all material times be conscious of the fact that it is dealing with an activity protected by Article 19 (1) (a) of the Constit11tion ff

350. SUPREME COURT REPORTS [1985] 2 s C.R.

which is ·vital to our democratic existence, In deciding the A reasonableness of restrictions imposed on any fundamental right the court should take into consideration, the nature of the right. alleged to have been infringed, the underlying purpose of the restrictiOns imposed, the disproportion of the imposition' aad the prevailing conditions at the relevant time including the social values ·whose needs are sought to bo satisfied by means of the restrictions. (See the State of Madras v. V.G. Rao(1)). The restriction in question is the burden of import duty imposed on newsprint. 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 issue in the light of the public interest. It provides that if the Central Governmel)t is ·satisfied C' that it is necessary in the public interest so to do it may exempt generally either absolutely or subject to such conditions 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 public interest so to do exempt from the payment of D duty by a special order in each, case under circumstances of an exceptional nature to be stated in such order any goods on which duty is leviable. The power exercisable under section 25 of the · . Customs Act, 1962 is no. doubt discretionary but it is not. un- restricted, . It is useful to refer here to the observations of Lord ' Denning M.R, in Breen v. Amalgamated Engineering Union(') at .E page 190 read thus : . "The discretion of a statutory body is never unfet- tered. It is a discretion which is to be exercised according to law. That means at least this : the statutory: body must be guided by relevant considerations and noi by irrelevant. , If its decision is. influenced by exiraneous considerations which it ought not: to have taken into. : account then the decision cannot stand. No matter that · the statutory body may have acted in good faith never- · theless the.decision will be set aside; ·That· is established by Pad-field v. Minister of Agriculture Fisheries and Food [1968] A.C. 997 which is a landmark in modern adminis- trative law."

. In any event. any notification issued under a statute also

(I) [1952] S.C.R•. S97. H (2) (1971] 2 Q.B. 175.

INDIAN ll)(pJlESS v. UNION (Venkatar11111iah, J.) 351

Freedom of press as the petitioners rightly assert means • freedom from interference from authority which would have the effect of interference with the content and circulation of news- papers. The most important raw material in the - production c ofa newspaper is the newsprint. The cost and availability of • newsprint determine the price, size and volume of the- pablication and also the quantum of news; views and advertieements apppear· ing therein. It is not disputed that the cost of newsprint works out to nearly 603 ofthe cost of production of newspaper. In the case of a big newspaper the realisation by the sale of news- D paper is just alfout 40 % of' its total cost of production. The remaining cost 'is met by advertisements revenue which is about 403 , by revenue from waste sales and job work ,which comes to about 5% and revenue from other sources such as the income from properties and other investments of the newspaper establishment. I These figures have been derived from the statement furnished by one of the big newspapers, The case of an other big newspapers may be more or less the same. The financial and other _difficul- ties felt 'by the newspaper presss in securing newsprint i~ recent years which- have become an international phenomenon are set out in the Final Report of the International Commission for the Study of Communication Problems referred to above at page , 141 thus: l' .. "Extremely serious on an international scale has been the effect of high costs of important materials or facilities .................................... Paper is a material consumed in vast quan,tities whose price in recent years has spiralled out of proportion to the general wodd·wide ' inflation .........• , ................... As for newsprint, its price - on world markets rose from a datum figure of 100 in. 1970' to 329 in May 1977, and has continued to rise since. A sad , l>y·product of this situation has been ,the intro· _R

·352 • ' ' ' SUPREME COURT REPORTS [1985] 2 s.c.R.

•. · duction of a covert form of censorship, as some Govern- . men ts limit the import , of newsprint, dist~ibute it by· · .. • · ·official , allocation scJ:iemes, and use these schemes to discriminate against the opposition newspapers." · ' In Chapter 4 of the same Report at page 100 the Inter- _J.

·B national Commission has observed thus :

"While · newspapers which are commercial enterprises , -.. . expect to .. sustain themselves by_ sales and advertising, "'' , they. are not always viable 'on Ibis traditional basis Capit~l . and' p~ofits from other media a~d from busines~ ·· ., in, general · are. often inje~ted into the newspaper indus- . . · .. try, .In many cases, the financing~ . or at least the deficits • are covered by governments or ,;olitical bodies. Assis~ · , tance from the 'State has taken various ·forms,' including'• ·' '.· .• •tax concessions not enjoyed by. other industries, . reduced . • , . postal . and 'telephone · rates, guaranteed Government ·D " ., advertising,. and subsidies . tc:i ~he price of .newsprint.. . , · Although the press is suspicious of .Government involve"'. ment iri its affairs, a desir~ to preserve variety hy keeping .,.:the weaker,papers alive has led to consideration' of various schemes. Direct grants to P~l'ers in need are made ·in· ·E ; . · c. · seven European nations-,

Smaller newspapers and some. parts of the "quality"· ,, . · or "specialized'.' press have experienced difficulties from , • 1. a contraction of op.erations and size,· 'which has led to . ~ )imitations on the variety .of information sources. ·This F .: • has induced many governments to examine the possibi- ' . , · Jity of subsidies _to help. keep newspapers· alive ·or . to establish new ones, in monopoly circulation areas· and. to promote plurality and _variety. in general. , .. ; if any duty is levied on newsprint by Government, it .. :G neces..'1i:ily has to be passed on to the purchasers pf newspapers,, unlesi·tb·e industry is able to absorb it. In order to pass ·on the duty t~'the consumer the price of newspapers has to be increased, Such i increase naturally affects the circulation of ,newspapers adversely .. · · · ..''H I:

" · Jn Sakai's case (supra), this Court has observed . thus :

INDIAN EXPRESS v. tlN!O'.N (Venkalfltlitniah, J.) ~53

"The effect of raising the selling price of newspaper has been considered by the Press Commission. ln Para· •A graph 164 of the Report it is observed :

"The selling price of a paper would naturally h'ave an important effect on its circulation, In B !! this connection we have examln'ed the effect of price~ cuts adopted by two English papers at Bombay on t1fe circulation of those two papers as well as o~'lhe leading paper which did not reduce its price. ·Prior to ·27th October 1952, Times of India which had th.e highest circulation a,t Bombay was being .sold at Re, 0·2·6 while Free Press Journa1 and National . Standard which rank next . i.n circulation were' being sold for Re. 0·2·0. On 27th October, 1952, Free Press Journal reduced its price to Rs. 0· 1.0 and within a year had claimed to have doub\ed its circulation. On .1st July, 1953, the NMional Standard wascon· D vert.ed into a Bombay edition ot' Indian Express with , a selling price of Rs. 0.1:6. Within six months it " ,, too claimed to have doubled its cir.culation .......... .. Duriµg this period the Times of India which .<!}d not reduce its selling price continued to ~~tain its rea· dership. Thus it would appear that Free fress E Journal and Indian Express by reducing their price have been able to tap new readership which was la· tent in the market but which could not pay the higher prices prevailing earlier." F Though the prices of newspapers appear to be on 'the low side it is a fact that even so many people find it difficult to pay that small price. This is what has •been • pointed out b'y the Press Commission in Paragraph · 52 of its report. According to it the most common reason for people in not purchasing newspapers is the cost of the newspaper and the inability of the household to spare G the necessary amount. This conclusion is based upon the evidence of a very large number. uf individuals and 're· ___ )... prescntatives of Associations. We would, therefore, be justified in relying upon Wand holding that raising ,the price of newspaper even by a small amount such •as one

354 SUPjUiWB COURT REPORTS [1985] 2 s.c.R.

A nP. in ·order that its present size be maintained would adversely affect its circulation."

This is not a novel 11henomenon. A stamp tax on newspapers came to be' levied in England in 1712, It virtually crippled the growth of the English press and thus became unpopular. There was B a lot of agitation against the said tax. But on its abolition in 1861, the circulation of newspapers increased enormnously. The following aceount found in the Encyclopaedia Britannica (1Q6,2) Vol. 16 at page 339 is quite instructive : "Abolition of ''Taxes on knowledge".-The develop- • ment of the press ·was enormously assisted by the gradual abolition of the "taxes on knowledge," and also by the introduction of a cheap postal system .......................... .

To Lord Lytton, the novelist and politician, and sub- sequently ti:> Milner Gibson and Rfohard Cobden, is chiefly 0 due the credit of grappling with this question in l'arliament to secur~ first the reduction of the tax to a penny in 1836, and then its total abolition in 1855. The number of news- papers established from the early part of 1855, when the ·repeal of the duty had become a certainty, and continuing E in existence at the beginning of 1857, amounted to 107; 26 were metropolitan and 81 provincial. The duties on paper itself were finally abolished in 1861.

The abolitioll of the stamp .. taxes brought about such • reductions in the prices of newspapers that they speedily began to reach the many instead of the few. Some idea of the extent of the tax on knowledge imposed in the early 19th century may be gathered from the fact that the number of stamps issued in 1820 was nearly 29,400,000, and the incidence of the advertisement tax, fixed ;it 3s. 6d. , in i 804, made it impossible for the newspaper owner to G pass on the stamp tax to the advertiser. Jn 1828 the proprietors of the Times had to pay the state more than £ 68,000 in stamp and advertise.meat taxes and pa~r duty. But after the reduction of the stamp tax in 1836 from four pence to -0ne penny, the circulation of English .news- papers, based on the stamp returns, rose from 39,000,000 ff to t22,ooo,ooo iti 18S4,"

INDIAN EXPRBSS v. UN(ON (Venkataramlah, I.) 355 The Second Press Commission in its Report (Vol. II) at pages 182-183 has stated that the figures of circulation of newspaper compiled by the Audit Bereau of Circulation (ABC) for the period January to June ]981 indicated that the circulation of newspapers ·in the period January to June 1981 was 1.9% lower than in the previous six months period. The decline in the circulation of dailies w asmore in the case of very big newspapers with circulation of one B lakh and above than in the case of smaller papers. The Commis- sion said that the decline in circulation would appear to be aitribnt- able mainly to two factors-increase in the retail price of news- papers in September-October, 1980 and again in April-May, 1981 and that the increase in retail prices appeared to have become . necessary following continuing increase in newsprint prices in the c lvst few years including levy of import duty in 1981 and increase in v wages and salaries cost on account of Palekar Award. Of these factors which were responsible for increase in prices, the imposition of import duty on newsprint was on account of State action. This aspect of the matter is not seriously disputed by the Government. D The pattern of the law imposing customs duties and .the manner in which it is operated to a certain extent exposes the citizens who are liable to pay customs duties to the vagaries of executive discretion; While parliament has imposed duties by enacting the Customs Act, 1962 and the Customs Tariff Act, 1975, the Executive Government is given wide power by section 25 of E the Customs Act, 1962 to grant exemptions from the levy of Customs duty. It is ordinarily a~sumed that while such power to grant exemptions is given to the Government it will consider all relevant' aspects governing the question whether exemption should be granted or not. In the instant case in 1975 when the Customs F Tariff Act, 1975 was enacted, 403 ad valorem was levied on news- print eveµ though it had been exempted from payment of such duty. If the exemption had not been continued, newspaper publishers had to pay 40% ad valorem customs duty on the coming into force of the Customs Tariff Act, 1975. Then again in 1982 by the Finance Act, 1982 an extra levy of Rs. 1,000 per tonne was G 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. No informa- tion is forthcoming from the Government as to whether there was any material which justified the said additional levy. It is also not clear why this futile exercise of levying an additional duty of H

sun.oo com ilei>oll'l'S [,19851 ~ s.c.ll.

A/ Rs. 1,000 per tonne was done when under the notification issued under section 25 of the Customs Att, 1962 on March 1, 1981 which was.in force then, ~stoms duty on newsprint above 10% ad v~lorem had been exempted. As mentioned elsewhere in the course of this judgment while levying ·fax on an activity which·is protected B also by Article 19(1)(a) a greater degree of care should be exhibited. While it.is indsiputable that the newspaper industry should also·bear its ilue share of the total burden ohaxation alongwith the rest of the community when any tax is specially ·imposed on newspaper industry, it should be' capable of beinJ! justified as a reasonable levy in court when its validity is challenged. In the absence of sufficient material, (h the levy of 40% plus Rs. 1,000 per tonne would become vulnerable to attack.' If the lery imposed by the statute itself fails, there would be no need to question the notifications issued :under section 25 of the· Customs Act, 1962. But having regard to the 'Prevailing legisla- . tive practice 1et Ifs assum'e that in order to determine the actual D ,, levy we should take· into consideration not merely the rate of duty mentioned in the Customs Tariff Act, 1975 but also any notification issued Jnder section 25 of the customs Act, 1962 which isln fotce. Eveli then the i'e~ns given by the isovernment to justify the total customs di?fy of' 15% levied from March 1, 1981 or Rs. 'lf²⁵ per tonne as'.it is currently being leVflid'appear to be inadequate. Iri the E , Finance Minister's speech delivered on the floor of the Lok Sabha in 19Si;t)le:firstreason'giveil. ' '.,.\ '' . for the levy of 15% duty was thatitwas intc!nded"'to prolliote a measui'b of restraint in the consumption of imported newsprint ancl thus heJ,P1il conserving foreign exc'hange". This grountt appears to be not tenable for two rel!sons. . In the • counter-affidavit fifed on behall' of the' Gbvernment, it is stated that 11 ·' the ·'allegation that the position of 'f6reign exchange reserve is com· fortabfe · is itreleva~t. Tliis · shows that ndbody in Government had ~ over laken rnto co~side~ation the effect of the import. of new~print on 'the foreign exchange reserve before issuing the notifications • •' Ievyil\g 1.5% dlity. Secondly no newspaper owner can import . . newsprint ditectly; ''Newsprint import is canalised through the State · .. G '' Trading Coiporatiori. If excessi;/e import of newsprint adversely affecis foreign exchahge reserve, the State Trading Corporation may reduce' the import of newsprin!aild allocate lesser quantity of impor· ted newsprint to newspaper establishments. There.is howeyer, no • >i[ need to impose import cluty with a view to curbing execssive iri:iji6rt ,-'-. of newsprint; 'fa the Finance Millisiet1s speech tliere is no reference ff >to the capa6ity ofthe newspaper fod\istry to llear the levy 15% of

lNDIAN EXPRESS v. UNlON (Venkataramiah, J.) .. '357 duty. In the counter:affidavit it is asserted that the· extent o( .A I burden faced by the newspaper industry in India is irrelevant to the levy of import duty on newsprint. This clearly shows · again· that the Government had not also considered avital aspect of th'e ques- tion before withdrawing the total exemption which was 'being enjoy- ed by newspaper industry till March 1,1981 ·and imposing 15% duty on newsprint. E. The petitioners have alleged that the imposition of customs duty has compelled them 'to. reduce the extent of the ·area of the newspapers for advertisements .which supply a major part of the sinews of a newspaper and consequently has adversely affected their. revenue from advertisements ... It is argued.· by them relying c '. l upon the.ruling in Bennett. ·Coleman's case {supra) thatArticle 19(1) (a) is infringed thereby. Our attention is.drawn to the following' passages in Bennett Coleman's case (supra) which are at pages 777- .· 778 and at page 782 : · ' ,,, . :; •,,,'1 "Publications means dissemination and circulation." D" The press has to carry on its activity by keeping' ill. view : : · the class of readers, the· conditions of labour; price of · ,, · material,· availability of adverisements, size of paper. and' the different kinds of news · comments and·; views and advertisements which are to be published and cfrculated.·' The law which lays excessive and prohibitive burden which . '. E . would restrict the cfrculation of' a newspaper will not be saved by Article 19(2). · If the area of· advertisement is ··' restricted. price of paper goes' up.· Ii the price goes up ".·' circulation will go down. This was held· in Sakal Papers ' Case (supra) to be the direct consequence of curtailment' of ·' : · · F • advertisement. The freedom of a newspaper to publish 0

any number of pages or to circulate 'it to any D.umb er of persons has been held by this Court to be an integral p~t of the freedom of speech and expression. This freedom is violated by placing restraints upon something which is an essential 'part of that freedom. · A restraint 'on the .number G of pages, a restraint on circulation ' and restraint on a advertisements would affect the fundemantal ' rights under" Article 19{l)(a) on the aspects of propagation, ·publication . and circulatioJ.: •..•..•....••..•. ~ ... ; ..•..•. ;•..•.••.••.. .'. "· '''" -- - - - - --- -- ' -- The various provisions of the newsprint import policy · ' ' have been examined to indicate as to how the 'petitioners' '' II

358 U9SSJ 2 S.C.lt. fundamental rights have been infringed by the restrictions QI! pa&f· limit, prohibiton against new·new!papers and new ellitions. The effect and consequences of the impugned , policy upon the newepapers is directly controlling the growth and circulation of newspapers. The direct effect is the restriction upon circulation of newspapers. The direct • effect is upon growth of newspapers through pages. The direct effect is that newspapers are deprived of their area .·,' of advertisement. The direct effect is that they are expos· ed.to financial loss. The direct effect is that freedom of ·' speech and expression is infringed."'

In meeting the above contention the Government relying on the . dec;ifiOn in Hamdard Dawakhana ( Wakf) Lal Kuan, Delhi & Anr. v. Union of India & Ors.Pl has pleaded in defence of its 11ction that the right to publish commercial advertisement is not part of freedom of speech and expression. We have carefully considered D the decision .in Hamdard Dawakhana's case (supra). The main plank of that decision was that the type of advertisement dealt with there did not carry with it the protection.of Article 19(1)(a). On examin· ing the history of the legislation, the surrounding circum6tances and ~e scheme of the Act which had been challenged there namely the Drup and Magic Remedies (Objectionable Advertisements) Act I: · · .1954 (21 of I954)the Court held that the object of that Act was the· prevention of self-medication· and self-treatment by prohibiting instruments which· may be. used to advocate. the same or which tended to ·spread the evil. The· Court relying on the decition of the America~Snpreme Court in Lewis J. Valentine'!. F.J. Chresten- f sen <•> observed at pages 687~689 thus :

, "lt ~'11not be said that the right to.publish and distri- b\\t~ commercial advertisements advertising µn individual's personal business is a .part of fr~edom of speech guaranteed by the ,Constitution. In Lewis Valentine v, F.J. Chreste:z · 8 sen,ii was.held that tJle constitutional right of free speech iR not infringed by pro))iW~ing the distribution iq city atroe!• .of handbills .qe,a;:ing on one side a protest against. action ta~llll by public officials and on the. other advertising matter. The object of affixing of the protest to the co c~Ja s.c,J;l.. 611. (2) 86>•taw Ed... 1262.. k ·

INPIAN EXPRESS v. UNION (Venkataramiah, J.) 359.

advertising circular was the evasion of the prohibition of a A. ; city ordinance forbidding the distribution in the city streets of.commercial and business advertising matter. Mr. Justice Roberts, delivering the opinion of the court said :

"This Court has unequivocally held that the streets are proper places for the exercise of the freedom of com- B municating information and disseminating opinion and that, though the states and municipalities may appropria- tely regula,te the privilege in the public interest, they may not unduly burden or prescribe its employment in these public thoroughfares. We are equally clear that the Con- stitution imposed no such restraint on government as respects purely commercial advertising ......... If the respondent was attempting to use the streets of New York by distributing commercial advertising the prohibition of the Code provisions was lawfully invoked against such conduct.'' D It cannot be said, therefor.0, that every advertisement. is a matter dealing with freedom of speech nor can it be said that it is an expression of ideas. In every case one has to see what is the nature of the advertisement and what activity falling under Art. l~(I) it seeks to further. The advertisements in the instant case relate to commerce or trade and not to propagating of ideas ; and advertising of prohibited drugs or commodities of which the .sale is not in the interest of the general public cannot be speech within the meaning of freedom of speech.and would not fall within Art. 19(l)(a). The main purpose an!! true intent and aim, F object and scope of the Act is to prevent self-medication or self-treatment and for that purpose advertisement com- • mending certain drugs and medicines have been prohibited. • Can it be said that this is an abridgement of the petitioners right of free speech ? In our opinion it is not. Just as in G Chamarbaugwa//a'a tase !957·S.C.R. 930 it was said that activities undertaken and carried on with a view to earning profits e.g. the business of betting and gambling will not be protected as falling within the guaranteed right of carry- ing on business or trade, so it cannot be said that an -.~ advertisement commending drugs and substances an H

SUPREME COURT REPORTS [1985] 2 S.C.R.

A ap.propriate cure for certsin diseases is an exercise of the right of freedo_m of speech."

In the above said case the Court was principally dealing with the right to advertise prohibited drugs, to prevent self-medication B and self-treatment.. That was the main· issue in the case. It is no doubt true that .some of the observations referred to above go beyond the needs of the case and tend to affect the right to publish all cornrnercialadvertisernents. Such broad observations appear to have been.made in the light or the decision of the. American Court in Lewis J. Valentine v: F. J. Chrestensen (supra); But it is worthy c of notice that the view expressed in this American case has not been fully approved by the American .. Supreme Court itself in its · subsequent decisions. We shall refer only to· two of them. In his concurring judgment in wi/liam B. Cammarano v, United States of Amerka<'I Justice Douglas said "Valentine v. Chrestensen ... .....• held that business of advertisements and commercial matters did D not enjoy the protection of the First . Amendment, made applicable to the States by the Fourteenth. The ruling was casual, almost off hand. Arid it has not survived , reflection". In Jeffrey Gole Bigelow v. Commonwealth of Virginia<•> the American Supreme Court held th.at the holding.in Lewis J. Valentine v. F.J. _Chrestensen E (supra) was distinctly a limited one. In view or the foregoing, we feel that the observations made in the H.imdard Dawakhana's case (supra) are too broadly stated and the Government cannot draw much support from it. We are of the view that all.commercial. advertisements cannot be denied the protection of Article 19 (I) (a) of the Constitution merely because they are issued by businessmen. F In any event ·the Government cannot derive any assistance from this case to sustain the impugned notifications~ · ~. - .. It was next urged on behalf of the , Government that the levy of customs duty on newsprint was not strictly. a levy on newsprint G as such since though customs duties were levied with reference to goods, the taxable event was th• import of goods within the customs ··barrier and hence there could be no direct effect on the freedom of speech end expression by virtue of the levy of customs duty on newsprint.· Reliance was placed in support of the above contention

INDiAN EXPRESS v. UNION (Venkatarami(J/f; J.) 36In1.

on the decision in In re &a ·customs Act.(1) Thaf decision was· • A A rendered on a reference made by the President under Article 143 of the Constitution requesting this Court to record its opinion on the ·• question whether the Central Government could i'evy d1stoms duty"' on goods imported by a State. The contention of the hrajority of the States in that case was that the goods imported 'by· thern being .B their property no tax by way of customs could be levied fly reasonit>f· Article 289 (1) of the Constitution which exempted' the property ' • of a State from t~xation by the Union. This Court (majorify !r,'' minority 4) beta that in view of'clause (1) of Article 289 which was· distinct from clause (2) thereof which provided tliat nothing in clause (l) of Article 289 would prevent the Union from imposing: c or authorising the ihlpostition of'any tax to such extent', if any/a~' ·• Parliament mikbt by law provitle in respect of a tralle or businelllP• Qf any kind carried on by or on behalf of a State or any operatiollil I! connec\F'1 .therewith or any property used or occupied for the purposes of .such trade or business or' any incon\.e accruing or ' ' lt, ,- arising in conntietion therewitli and the other proviSions of the ' D . a Constitution which enabled t!J,e ·union to levy 4iffer~nt kind~ of taxes, customs duty levied OI) ..the importation of goocfs 'was only a tax levied on ·international tr~de and not on property. The Court further held that 't:he imiliunity granted under Article 289 (1) in favour of States had to be restricted to taxes levied directly on property and even though custo!11S duties ha.ct · referehce to gbods and commoditie~ they were not taxes on propertr an'd hence not within the 'exemption iii Article 289 (1). .Tl)e· above decision is again of very little -,• assistailce I td the. Government _ l ·' since,._ it cannot' be denied that the levy of custi>ms duty on ri-ewsprint·used in the a production of newspapers is restriction on the activity of publish- F ing a newspaper and the levy of customs duties had a' direct elfect on that activity. There exists no analogy beiwee~ . Article 289' (I) and Article 19 (l) (a) and (2) ofthe Constitution. Hence the levy 1 cannot bejustified merely on the ground that it was not on any • property of the publishers of newspapers. '' G ,,. Our att~ntion has been particularly drawn to the statement of the Fiqanc~ Mi~ister that one of the considerationl\'.whJCh pxev11iled upon the Goyenuqent to levy llte customs duty was that tjle newspa- pers contained 'piffies'. A 'piffie' means foolish nonse11se. It ap;iears

(I) [1964] 3 S.C.R. 787. .• . H .(' ' :i ~ "'

362 SUP.IU!MB COURT REPO!nS [1985] 2 S.C.R.

A' that one qf.. the reasons for levying the duty was that certain writings in newspapers appeared to the Minister as 'piffies'. Such action is not p'ermissible under our Constitution for two reasons-(i) that the judgment of the Minister about the nature of writings cannot be a true description of the writings and (ii) that even if the writlngs are .. piffies it qannot be a ground for imposing a duty will whiohhinder I · citc1Jlation of newspapers. In . this connection it is useful to refei to the decision 9f the American SupreJlle ·, Court .in Robert £;. Hannegaµ v. Esquire, ll'!c·<'> in which it was held that a publication could not be deprived of the benefit of second class mailing rates accorded to publications disseminating "information of a public .character, or devqted literature, the sciences;. arts, or some special c industry" because its contents might seem to the Postmaster Geperal by. reason of vulgarity or poor taste, ·not to. co.iitr)bute to the public good. Justice Douglas observed in that decision thus :

"It is plain, as we ·liave said,' that the favourable second class rates were granted to periodicals meeting the requirements of th~ Fourth condition, so that the public good ni.ight be served through a dissemination of the class ' of periodicals,, described. But that is ' ' - a far cry from assuming that Congress had any idea that each applicant .•. for the second-class rate must convin~e the Posim,aster 0

I . ~eneral that,his publication positively contributes to the . public good or public welfare. Under our system of 11overnment there. is an accommod!ltion for ilie widest yatietiea of tastes a,t;td ideas. What is good literature, what has educational value, what is refined publip information, .' what is good art, varies with individuals. as it does fro!ll f one generation to another. There do~btless would.be a contrariety of views concerning Cervantes' Don Quixote, Shakespeare's VeQus & Adonis, or Zola's Nana. But a requirement that literature or art conform to some norm prescribed by an official S!llacks of an ideology foreign to our system. The basic Values implicit in the requirements G of the Fourth condition can be served only by uncensored distrlliiltion of literature. "From the multitude of ~ompeting offerings the public will pick and choose. What • seems to one to be trash may have for others fleeting or . even enduring:values." '

(I) 327 U.S. 146 : 90 L. Ed. 586

I. INDIAN EXPRESS v•. UNION (Venkataramiah, ).) 363 Matters concerning the intellect .and .. ethics do undergo .. fluctuations from era to era. ·The world .of mind is a changing one. A It is not static. The streams of literature and of taste and judgment in that sphere are not stagnant. They have ·a qualiiy of freshness and vigour. · They keep on changing from time to time, froni place to place and from community ..to community. It · is one thing to say that in view of considerations . relevant to public finance which require every citizen to contribute· a reasonable amount to public exchequer customs· duty is leviablc even on newsprint used . by newspaper industry and an entirely different thing to say that the levy is imposed because the newspa- pers· generally contain 'piflles'. While the former may·· be valid if 'the circulation of newspapers is not affected prejudicially, the latter c is · impermissible under the Constitution as the levy is being made . on a consideration which is wholly .outside the constitutional liwiations. The Government cannot arrogate to itself the power to prejudge ·the nature of ·contents· of ·newspapers· even before they : are printed. Imposition of a restriction of the above kind virtually D 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. . l

To sum up, the counter-affidavit filed on behalf of the , .

· Government in these cases does· not show· whether the Government . ever considered the relevant matters: It says tha't the extent of .

burden on the newspaper industry · imposed by ·the impugned levy is irrelevant. It says that the position that foreign exchange reserve is comfortable is not relevant. It does not say that the increasing cost of imported newsprint was taken . into consideration. · The Finance Minister says that the levy was imposed because he found piflles' in some newspapers. There is no reference to the effect of • the implementation of the Palekar Award. on the newspaper industry. It does not. also state what effect it will have on the • members of the public who read newspapers and how far it will reduce the circulation of newspapers. G It is argued on behalf of the Government that the effect of the impugned levy being minimal; there is no need to consider the . contentions urged by the petitioners. As obserVed by Lord M~rris · of Borth·Y-Gest in Honourable Dr.· Paul Borg Olivier & Anr v. · H•nourab/e Dr. Anton· Buttigieg(') a case from Malta, that where (I) U?67] A.C. I 1' (P.C.) JI

;• 364 . SUPREME COURT REPORTS • [1985] 2 s.c.R •

'A fundamentar rights 'ancl freedom of the' individual ~re being cons.i- " dered,ca 'court should be cautious before accepting 'the view• that ' :some' particular disregard of them is of minimal account. The learned _ 'Lord' observed in the above case that there was always the likelihood . of the violation being 'vastly widened. and extended with impunity. He also referred to the words of Portia~'Twill be recorded for a B _ precedent, and many an error by the same example will. ru<h into · ~ the state', and the following passage. from the American case i.e Thomas v. Collins :(1) : • ., •

. '' . , .. "The r;straint is not small.when it is considered what .. ' .. ' . ' . ,. . '

a - . . . . was · restrained... The right is national right; federally'· '

'.C .~ • '. guaranteed. ,There is son:e modicum of freedom of thought, -speech and assembly which all citizens of. the . , . ; republic· may.: exercise throughout its length. and breadth," , .. ·. which no state, nor all together,, not the nation itself,. can . . .. ! . prohibit, restrain.or impe~~' .Jf. the restraint were smaller:. D ; · , than it is; it is from petty. tyrannies that large ones take ,'" ..•. root and grow .. This fact· can be more plain than when·· -. .. ; ... they are impos~d on the most basic right of.all. Seedlings planted.in that soil grow great and, growing, break down the foundations of liberty." ··

. ·: , .fo. th~ab~ve decision the Prl~y _Council cited with approval . the view expressed by this Court i.n Romesh Thappar's case (supra) .and in Martin v. City of Struthers.('); The Privy Council observed · thus : · ·· · · · · · '' :t ~. ,I

"A measure of interference with the free handling of the newspa.per rand its free circulation was involved in the F prohibition which the circular imposed. It was said in an . ·Indian case-Romesh"Thappey v. State of Madras): ,, .. .' . "There can be no doubt that freedom of speech and , ei::pression includes freedom of prepagation of ideas and • G tliat freedom is secured by , freedom of circulation, .. 'Liberty: of circulation is as· essential to that freedom as <' the liberty of publication. Indeed· without circulation the publication would be of little value." , • ... (2) [1944)323 U.S. Sl6 .. JI . (3) (19431319 u,s. 141 '.

INDiAN EXPRESS v. UNION (Venkfltaramiah, J.) 365 Similar thoughts were• expressed by Black J. in his . judgment in Martain v. City of Struthers when he said: A

"Freedom to distribute information to every citizen· wherever he desires to receive· it is so.. clearly· vitaf to the preservation of a free society that, putting aside reasonable police and health regulations of time and ' manner of distribution, it must be fully preserved". · .,B

We respectfully endorse the high principle expounded by the Privy Council in the above ·case. Moreover in the absence of a . proper e.xamination of all relevant matters, it is not possible to hold · that the ·effect of the levy is minimal. In fact the· impact. of the .C impugned levy in these cases i~ not minimal at all: For. example, The Tribune Trust has to pay Rs. 18.7 lacs and The Statesman Ltd. ·has to pay Rs. 35.9 lacs by way of customs· duty -on newspfint imported during 1983-84. Other big newspapers have also to pay farge sums by way of customs duty annually. ·· .. ! D The question in the present cases is whether· ihe tax ha~ been shown to be so burdensome as to warrant its being struck down 1 The petitioners have succeeded in showing a fall in circulation but whether it is a direct comeque;:;ce o( the customs levy and the in- crease in price has not b~en duly established. It may be due to varioi;s circumstances. The fall in circulation may be due to the general rise .F in cost ofJiving and the reluctance of people to buy as many news-. papers as they used to buy before. It may be due to ba(I management. It may be due to change of editorial policy. It· may be due to_ the absence of certain feature writers. It may be due to other cfrciim- . stances which it is not possible to .enumerate. Except the synchronising of time, there is nothing to indicate that the slight fall in· circulation is directly due to the levy of customs duty. One curious feature of the case is that the petitioners have made no efforts to produce their balance sheets or profit. and loss statements to. give us a true idea of how burdensome the customs levy really is. On the other· hand, the Government also has made no efforts to show the effect of the impact of the levy on the newspaper jndustry as a whole . . All these years,. the very exemption which they; granted was an . indication that the levy was likely to have a serious impact on the . newspaper industry. Even now the exemption given to the small and medium newspapers shows that there is bound to be an impact. No effort has been made on the part of the .Government to .show

366 8U'.PREMI! COURT REPORTS · [1985] 2 s.c.a.

the 'precise nature of the impact. On the other band, the case of , .the Government appears to be that such considerations. are entirely irrelevant, though the outstan<ling fact remains that for several years, the Government itself thought that the newsprint deserved total exemption. · On the material now available to us, while it is not possible to come to the conclusion that the effect of the levy B is indeed so burdensome llS'to affect the freedom of the press, we are also not ·able to come to the conclusion that it will not be l>nr,?ensome. This a matter which touches the freedom of the press which is, as we said, thjlvery soul of democracy. This is certainly not a question which should be decided on the mere questioji of • burden. of proof. There are factors indicating that the present levy c is heavy and is perhaps heavy enough to affect circulation. On stlch ,a yital issµe,. we cannot merely say that the petitioners .have not ..P~~ed sUllicient material to establish the drop in circulation ii ·directly linked to incre!lse of the levy when, on the side of the Government the entire exercise is thought to be irrelevant. Hence there appears to be a good ground to· direct the Central Government to reconsider the matter afresh in the light of what has been said here. . . r

· VII

ls ·the classification of newspapers made for the purpose of exemption Yiolaiive of Article 14 ?

1 We do not, however, see much substance in the contention. of

some of the petitioners that the. classification of the newspapers into iimall, medium and big newspapers for purposes of levying custo.ms • duty is violative of Article 14 of the Constitution, The oject of exempting small newspapers from the payment of customs duty and f levying 5% ad valorem (now Rs; 275 per MT) on roedium newspa- 4... pers while-levying full customs duty on big newspapers is to assist , ~ the small and medium newspapers in bringing down their cost .of ~

.production. 'Such papers do· not command large advertisement > ,revenue. Their area of circulation is limited and majority of them G iuein Indian languap cateri11g to rural sector. We do not find h · anything sinister in the object nor can it be said that the classifica- . ' tion ·has ho nexus with the object to be achieved. As observed by < .~ Mathew, J. in the Bennett Coleman's case (supra) it is the duty of the State to encourage education of the·masses through the medium of the press under Article 41 of the Constitution. We, therefore, ·Hject this coute11tion •