Full Judgement
Indian Express Newspapers (Bombay) Private Ltd. & Ors Vs. Union of India & Ors [1984] INSC 230 (6 December 1984)
VENKATARAMIAH, E.S. (J) VENKATARAMIAH, E.S. (J) REDDY, O. CHINNAPPA (J) SEN, A.P. (J)
CITATION: 1986 AIR 515 1985 SCR (2) 287 1985 SCC (1) 641 1984 SCALE (2)853
CITATOR INFO :
R 1989 SC 190 (14)
ACT:
Constitution of India 1950 Article 19(I )(a)- Freedom of speech and expression Whether includes Freedom of press- Restrictions other than those In Article 19(2)-Whether reasonable-Interference in the name of Public Interest- Whether justified. D Roll of Press and Newspapers-Duty of Court to held the balance even and to strike down any unconstitutional invasion of press.
Fundamental rights under Article 19(l)(a) and (g)- Whether different from right conferred by First Amendment to American Constitution.
Article 13(3)(a)-Notification under section 25 Customs Act 1962-Contrary to fundamental rights-Whether to be struck down.
Article 14-Classification of newspapers for levying customs duty-Whether discriminatory.
Article 4I-Duty of State to encourage education of masses through media of press-Necessity of. F Entry 87 and 93 List 1. Seventh Schedule-Newspaper Industry-Levy of tax-Competency of Parliament to enact laws- Scrutiny by Courts when arises -Tax transgressing into the field of freedom of speech and expression and stifles that freedom-Whether unconstitutional.
Article 32-Validity of tax-Duty of Court-Not to be burdensome-Newspaper Industry not to be singled out-Custom Duty on newspaper-Whether tax on knowledge-People's right to know-Imposition of tax-Government to be more cautious.
Interpretation of statutes:
Constitution of India 1950 Article 19(1)(a)- Interpretation of-American 288 cases-Whether sole guide-He1p in understanding the basic principles of freedom of speech and expression.
Statutes Taxing Newsprint-Tests for determining vires of-Different from other taxing statutes-Grounds of challenge.
Customs Act. 1962 Section 25-Power to grant exemption- Whether legislative power-Whether notification a Subordinate piece of legislation Whether questionable on the ground of unreasonableness-Power of Government discretionary but not unrestricted.
Customs Act 1962 Section 25-Notification Substitution of by another- Whether former notification would revive ff the latter is held invalid.
Customs Tariff Act 1975 Section 2 and Second Schedule Heading 48.01/21 -Sub-heading 2-Newsprint-Import duty and auxiliary levy at a flat rate- Validity of.
HEADNOTE:
Under the Indian Tariff Act 1934, there was a levy of customs duty on imported paper. Exemption, however, had been granted for import of white, grey or unglazed newsprint from the levy of any kind of customs duty in excess of 1.5% ad valorem but subsequently a specific import duty of Rs. 50 per MT was levied on newsprint imports upto 1966. The Inquiry Committee on Small Newspapers examined the question of customs duty on newsprint and submitted its report in 1965 recommending total exemption of newsprint from customs duty. Pursuant to the said recommendation, the Government abolished customs duty on newsprint altogether in the year 1966. In 1971, a regulatory duty of 2-1/2% was levied on newsprint imports. This 2-1/2% regulatory duty was abolished and was converted into 5% auxiliary duty by the Finance Act of 1973. On the Customs Tariff Act 1975 coming into force, the Indian Tariff Act 1934 was repealed. Under section 2 read with Heading No. 48.01/21 of the First Schedule to the 197S Act, a levy of basic customs duty of 40% ad valorem was imposed on newsprint. However, the 5% auxiliary duty levied from April 1, 1973 continued to be in operation which was also totally abolished in July 1977. The total exemption from customs duty on newsprint continued till March 1, 1981 when notification dated July IS, 1977 granting total exemption from customs duty superseded by the issue of a fresh notification under which publishers of newspapers had to pay 10% ad valorem customs duty on imported newsprint. By another notification issued at about the same time the auxiliary duty imposed by the Finance Act of 1981 above 5% ad valorem was exempted in the case of newsprint. The result was that a total duty of 15% ad valorem came to be imposed on newsprint for the year 1981-82, which led to the increase in the price of newspaper resulting in fall in circulation of news papers. In the first set of writ petitions this 15% levy was challenged.
During the pendency of these writ petitions while Customs Tariff Act, 1975 was amended levying 40% ad valorem plus Rs. 1000 pet MT as customs duty on newsprint, the auxiliary duty payable on all goods subject to customs duty was increased to 50% ad valorem. But by notification dated February 82.
289 1982 issued under section 25(2) of the Customs Act 1962 the notification A dated March 1, 1981 was superseded and Rs. 550 per tonne was imposed as customs duty on newsprint and auxiliary duty was fixed at Rs. 275 per tonne. In all Rs. 825 per tonne of newspaper had to be paid as duty.
Under the newsprint policy of the Government there were three sources of supply of newsprint-(i) high seas sales. (ii) sales from the buffer stock built up by the State Trading Corporation which includes imported newsprint, and (iii) newsprint manufactured in India. Imported newsprint is an important component of the total quantity of newsprint utilised by any newspaper establishment.
The validity of the imposition of import duty on newsprint imported from abroad under section 12 of the Customs Act 1962 (Act 52 of 1962) read with section 2 and Heading No. 48.01/21 Sub-heading No. (2) in the First Schedule to the Customs Tariff Act, 1975 (Act 51 of 1975) and the levy of auxiliary duty under the Finance Act, 1981 on newsprint as modified by notifications issued under section 25 of the Customs Act 1962 with effect from March 1, 1981 was challenged in the writ petitions.
In the writ petitions it was contended (I) that the imposition of the import duty has the direct effect of crippling the freedom of speech and expression guaranteed by the Constitution as it led to the increase in the price of newspapers and the inevitable consequence of reduction of their circulation; (2) that with the growth of population and literacy in the country every newspaper is expected to register an automatic growth of at least 5% in its circulation every year but this growth is directly 'impeded by the increase in the price of newspapers; (3) that the method adopted by the Customs Act, 1962 and the Customs Tariff Act, 1975 in determining the rate of import duty has exposed E the newspaper publishers to Executive interference; (4) that there was no need to impose customs duty on newsprint which had enjoyed total exemption from its payment till March 1, 1981, as the foreign exchange position was quite comfortable. Under the scheme in force, the State Trading Corporation of India sells newsprint to small newspapers with a circulation of less than 15000 at a price which does not include any . import duty. to medium newspapers with a circulation between 15000 and 50,000 at a price which includes 5% ad valorem duty (now Rs. 275 per MT) and to big newspapers having a Circulation of over 50,000 at a price which includes the levy of 15% ad valorem duty (now Rs. 825 per MT). This classification of newspapers' into big, medium and small newspapers is irrational as the purchases on high seas are sometimes effected by a publisher owning many newspapers which may belong to different classes; (5) that the enormous increase in the price of newsprint subsequent to March 1, 1981 and the inflationary economic conditions which led to higher cost of production have made it impossible for the industry to bear the duty any longer. Since the capacity to bear the duty is an essential element in determining the reasonableness of the levy, the continuance of the levy is violative of Article 19(1)(a) and Article 19(1)(g) of the Constitution. The imposition of the levy on large newspapers by the Executive is done with a view to stifling circulation of newspapers which are highly critical of the performance of the administration. The classification of newspapers into small, medium and big for purposes of levy of import duty is violative of Article 14 of the Constitution; and (6) that the power of the Government to levy taxes of any kind on the newspaper establishment rings the death-knell of the freedom of press and would be totally against the spirit of the Constitution.
The Union of India contested the writ petitions alleging (I) that the Government had levied the duty in the public interest to augment the revenue of the Government.
When exemption is given from the customs duty, the Executive has to satisfy itself that there is some other corresponding public interest justifying such exemption and that in the absence of any such public interest, there is no power to exempt but to carry out the mandate of Parliament which has fixed the rate of duty by the Customs Tariff Act, 1975; (2) that the classification of newspapers for purposes of granting exemption is done the public interest having regard to relevant considerations, and that the levy was not Malay fide Since every section of the society has to bear its due share of the economic burden of the state, levy of customs duty on newsprint cannot be considered to be violative of Article 19(1) (a). The plea that the burden of taxation is excessive is an irrelevant factor to the levy of import duty on newsprint; (3) that the fact that the foreign exchange position was comfortable was no bar to the imposition of import duty; and (4) since the duty imposed is an indirect tax which would be borne by the purchaser of newspaper, the petitioner could not feel aggrieved by it.
Allowing the Writ Petitions, ^
HELD: 1. The expression 'freedom of press' has not been used in Article 19 of the Constitution but, as declared by this Court, it is included in Article 19 (1) (a) which guarantees freedom of speech and expression. Freedom of press means freedom from interference from authority which would have the effect of interference with the content and circulation of newspapers. [310C; 35I]
2. There could not be any kind of restriction on the freedom of speech and expression other than those mentioned in Article 19 (2) and it is clear that there could not be any interference with that freedom in the name of public interest, Even when clause (2) of Article 19 was subsequently substituted under the Constitution (First Amendment) Act, 1951 by a new clause which permitted the imposition of reasonable restrictions on the freedom of speech and expression in the interests of sovereignty and integrity of India, these purity of the State, friendly relations with foreign States, public order, decency or morality in relation to contempt of court, defamation or incitement to an offence. Parliament did not choose to include a clause enabling the imposition of reasonable restrictions in the public interest. [3l2B-C]
3. Freedom of press is the heart of social and political. intercourse The press has now assumed the role of the public educator making formal and non-formal education possible in a large scale particularly in the developing world, where television and other kinds of modern communication are not 291 still available for all sections of society. The purpose of the press is to advance the public interest by publishing facts and opinions without which a democratic electorate cannot make responsible judgments. Newspapers being purveyors of news and views having a bearing on public administration very often carry material which would not be palatable to governments and other authorities. With a view to checking malpractices which interfere with free flow of information, democratic constitutions all over the world have made provisions guaranteeing the freedom of speech and expression laying down the limits of interference with it.
[316B.D; H] It is the primary duty of all the national courts to uphold the said freedom and invalidate all laws or administrative actions which interfere with it, contrary to the constitutional mandate. [317A] Brij Bhushan & Anr. v The State of Delhi [1950] S C.R.
605, Bennett Coleman & Co. & ors v. Union of India & ors.
[1973] 2 S.C.R. 757, Romesh Thappar v. The State of Madras;
1950 S.C.R. 594, Express Newspapers (Private) Ltd. & Anr. v.
The Union of lndia & ors. [1959] S.C R. 12 and Sakal Papers (P Ltd. & Ors v. The Union of India [19621 3 S.C.R. 842, followed.
1 Annals of Congress (1789-96) p. 141; D.R. Mankekar:
The Press under Pressure (1973) p 25; Article 19 of the Universal Declaration of Human Rights [1948: Article 19 of the International Covenant on Civil and Political Rights 1965; Article 10 of the European Convention on Human Rights:
First Amendment to the Constitution of the United States of America; Article by Frank C. Newman and Karel Vasak on 'Civil and political Rights' in the International Dimensions of Human Rights (Edited by Karel Vasak) Vo. 1 pp. 155-156;
"Many Voices one World" a publication of UNESCO containing the Final Report of the International Commission for the Study of Communication Problems Part V dealing with 'Communication Tomorrow' p. 265; Article entitled 'Toward a General Theory of the First Amendment' by Thomas 1. Emerson (The Yale Law Journal Vol. 72 .877 at p. 906; Second Press Commission Report (Vol.l. pp. 3435). referred to.
5. (i) Excluding small newspaper establishments having circulation of less than about 10,000 copies a day, all other bigger newspaper establishments have the characteristics of a large industry The Government has to provide many services to them resulting in a big drain on the financial resources of the State as many of these services are heavily subsidized. Naturally such big newspaper organisations have to contribute their due share to the public exchequer and have to bear the common fiscal burden like all others. 1324C; E] (ii) While examining the constitutionality of a law said to be contravening Article 19 (1) (a) of the Constitution, the decisions of the Supreme Court of the United States of America cannot be solely relied upon for guidance but could be taken into consideration for understanding the basic principles of freedom of speech and expressiyn and the need for that freedom in a democratic country. 1324F-G] (iii) The pattern of Article 19 (1) (a) and of Article 19 (1) (g) of the Indian Constitution is different from the pattern of the First Amendment to the American Constitution which is almost absolute in its terms. The rights guaranteed under Article 19 (1) (a) and Article 19 (1) (g) of the Constitution 292 are to be read alongwith clauses (2) and (6) of Article 19 which carve out areas A in respect of which valid legislation can be made. [324H; 325A]
6. Newspaper industry has not been granted exemption from taxation in express terms. Entry 92 of List I of the Seventh Schedule in the Constitution empowers Parliament to make laws levying taxes on sale or purchase of newspapers and on advertisements published therein. The power to levy customs duties on goods imported into the country is also entrusted to Parliament by Entry 83 in List I of the Seventh Schedule to the Constitution. [325B; 326G]
7. The First Amendment to the Constitution of the United States of America is almost in absolute terms and, therefore, no law abridging the freedom of the press can be made by the Congress. Yet the American Courts have recognised the power of the State to levy taxes on newspapers establishments, subject to judicial review by courts by the application of the due process of law principle. [328E-F]
8. The police power, taxation and eminent domain are all forms of social control which are essential for peace and good government. In India the power to levy tax on persons carrying on the business or publishing newspapers has got to be recognised as it is inherent in the very concept of government. 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. [328G; 329C]
9. It is not necessary for the press to be subservient to the Government. As long as this Court sits' newspapermen need not have the fear of their freedom being curtailed by unconstitutional means. It is not acceptable that merely because the Government has the power to levy taxes, the freedom of press would be totally lost. The Court is always there to hold the balance even and to strike down any unconstitutional invasion of that freedom. [338G; 339F]
10. Newspaper industry enjoys two of the fundamental rights, namely, the freedom of speech and expression guaranteed under Article 19 (1) (a) and the freedom to engage in any profession, occupation, trade. Industry or business guaranteed under Article 19 (1) (g), While there can be no tax on the right to exercise freedom of expression, tax is leviable on profession, occupation, trade, business and industry. Hence tax is leviable on newspaper industry. But 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 freedom of expression it will not be contravening the limitations of Article 19 (2). The delicate task of determining when it crosses from the area of profession, occupation, trade, business or industry into the area of freedom of expression and interferes with that freedom is entrusted to the courts. [339G-H; 340A-B]
11. While levying a tax on newspaper industry it must be kept in mind that it should not be an over-burden on newspapers which constitute the Fourth Estate of the country. Nor should it single out newspaper industry for harsh treatment. Imposition of a tax like the customs duty on newsprint is an imposition on knowledge and would virtually amount to a burden imposed on 293 a man for being literate and for being conscious of his duty as a citizen to inform himself about the would around him.
'The public interest in freedom A of discussion (of which the freedom of the press is one aspect) stems from the requirement that members of a democratic society should be sufficiently informed that they may influence intelligently the decisions which may affect 'themselves'. [341H; 342A-B]
12. Freedom of expression has four broad social purposes to serve: (i) it helps an individual to attain self fulfillment, (ii) it assists in the discovery of truth, (iii) it strengthens the capacity of an individual in participating in decision making, and (iv) it provides a mechanism by which it would be possible to establish a reasonable balance between stability and social change. All members of society should be able to form their own beliefs and communicate them freely to others. In sum, the fundamental principle 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 more cautious while levying taxes on matters concerning newspaper industry than while levying taxes on other matters. [342C-E]
13. In view of the intimate connection of newsprint with the freedom of the press, the tests for determining the vires of a statute taxing newsprint have, therefore, to be different from the tests usually adopted for testing the vires of other taxing statutes. In 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, it may be sufficient to show a distinct and noticeable burdensomeness, clearly and directly attributable to the tax. [342G-H] Constituent Assembly Debates. Vol. IX pp. 1l75-1180 dt. September 9,1949: Corpus Juris Secundum (Vol. 16) p. 1132;
American Jurisprudence 2d (Vol. 16) p. 662; Article on the First Amendment by Thomas 1. Emerson (The Yale Law journal Vol. 72 at p. 941); Second Press Commission Report (Vol 1) p. 35; Essay No. 84 by Alexander Hamilton in 'The Federalist; Alice Lee Grosjean supervisor of Public Accounts for the State of Louisiana v. American Press Company 297 U.S. 233: 80 L. ed. 660; Robert Murdock Jr. v. Commonwealth of Pennsylvania (City of Jeannette). 319 U S 105: 87 Law.
ed. 1292 and Attorney General & Anr. v. Antigua Times Ltd.
[1975] 3 All E. R. 81, referred to Bennett Coleman & Co. & ors. v. Union of India & ors, [19731 2 S.C.R. 757 and Sakal Papers (P) Ltd. & Ors. v. The Union of India [1962] 3 S.C.R. 842, distinguished. G Attorney General v. rimes Newspapers [1973] 3 All. E.R.
54, followed.
14, In the instant cases, assuming that the power to grant exemption under section 25 of the Customs Act, 1962 is a legislative power and a notification issued by the Government there under amounts to a piece of 294 subordinate legislation, even then the notification is liable to be questioned on the ground that it is an unreasonable one. [34SC-D]
15. A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature Subordinate legislation may be questioned on any of grounds on which plenary legislation is questioned. In addition it may also be questioned on the ground that it does not conform to the statute under which it is made. It may further be questioned on the ground that it is contrary to some other statute.
That is because subordinate legislation must yield to plenary legislation. It may also be questioned on the Ground that it is unreasonable, unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary.
[345H ;346A-B]
16. In India arbitrariness is not a separate ground since it will come within the embargo or Article 14 of the Constitution. In India any enquiry into the vires of delegated legislation must be confined to the ground on which plenary legislation may be questioned 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 Constitution. Subordinate legislation cannot be questioned on the ground of violation of principles of natural justice on which administrative action may be questioned.
[347E-G]
17. A distinction must be made between delegation of a legislative function in the case of which the question of reasonableness cannot be enquired into and the investment by statute to exercise particular discretionary power. In the latter case the question may be considered on all grounds on which administrative action may be questioned, such as, non- application of mind, taking irrelevant matters into consideration, failure to take relevant matters into consideration, etc. etc. On the facts and circumstances of a case, a subordinate legislation may be struck down as arbitrary or contrary to statute if it fails to take into account very vital facts which either expressly or by necessary implication are required to be taken into consideration by the statute or, say, the Constitution. This can only be done on the ground that it does not conform to the statutory or constitutional requirements or that it offends Article 14 or Article 19 (1) (a) of the Constitution. It cannot, no doubt, be done merely on the ground that it is not reasonable or that it has not taken into account relevant circumstances which the Court considers relevant. [ 348A-D]
8. In cases where the power vested in the Government is a power which has got lo be exercised in 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 section 25 (1) of the Customs Act, 1962 is required to be laid before Parliament under section 159 thereof does not make any substantial difference as regards the jurisdiction of the court to pronounce on its validity. [348E-F]
19. Section 25 of the Customs Act, 1962 under which the notifications are issued confers a power on the Central Government coupled with a duty to examine the whole issue in the light of public interest. It provides that if the Central Government is satisfied that it is necessary in the public interest so to 295 do it may exempt generally either absolutely or subject to such conditions, A goods of any description, from the whole or any part of the customs duty leviable thereon. The Central Government may if it is satisfied that in the public interest so to do exempt from the payment of 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 unrestricted.
[350C-E]
20. Any notification issued under a statute also being a 'law' as defined under Article 13(3)(a) of the Constitution is liable to be struck down if it is contrary of any of the fundamental rights guaranteed under Part III of the Constitution. [350H; 351A] Article entitled 'Judicial Control of Delegated Legislation: The Test of Reasonableness' by Prof. Alan Wharam, 36 Modern Law Review 611 at pp 622 23; H.W.R Wade:
Administrative Law (5th Edn.) pp. 747-748; Municipal Corporation of Delhi v. Birla Cotton Spinning and Weaving Mills Delhi & Anr. [1968] 3 S.C.R 251; Kruse v. Johnson [1898] 2 Q.B.D. 91; Mixnam Properties Ltd. v. Chertsey U.D.C. [1964] I Q.B. 214; The Tulsipur Sugar Co. Ltd v. The Notified Area Committee Tulsipur [1980] 2S.C.R.1111;Ramesh Chandra Kachardas Porwal & Ors. v. State of Maharashtra & ors. etc.. [1981] 2 S C.R. 866; Bates v. Lord Hailsham of St. Marylebone & ors. [1972] 1 W.L.R. 1373 and Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 K.B. 223, referred to.
Narinder Chand Hem Raj & ors. v. Lt. Governor Administrator Union Territory. Himachal Pradesh & Ors.[1972] 1 S.C.R. 940, distinguished E State of Madras v. V.G. Rao [1952] S.C.R. 597 and Breen v. Amalgamated Engineering Union [1971] 2 Q.B. 175, relied upon.
21. If any duty is levied on newsprint by Government it necessarily has to be passed on to the purchasers of newspapers, unless the industry is able to absorb it. In order to pass on the duty to the consumer the price of newspapers has to be increased. Such increase naturally affects the circulation of newspapers adversely. [352G]
22. The pattern of the law imposing customs duties and the manner in which it is operated, to a certain 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, 1962 the Executive Government is given wide power by section 25 of the Customs Act, 1962 to grant exemption from the levy of Customs Duty, it is ordinarily assumed 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 Tariff Act, 1975 was enacted, 40% ad valorem was levied on newsprint even 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, 296 1975 Then again in 1982 by the Finance Act, 1982 an extra levy of Rs. 1000 per tonne was imposed in addition to the original 40% ad valorem duty even though under the exemption notification the basic duty had been fixed at 10% of the value of the imported newsprint. Neither any material justifying the said additional levy was, produced by the Government nor was it made clear why this futile exercise of levying an additional duty of Rs. 1000 per tonne was done when under the notification issued under. section 25 of the Customs Act, 1962 on March 1, 1981, which was in force then, customs duty on newsprint above 10% ad valorem had been exempted. While levying tax on an activity which is protected also Article l9(1)(a) a greater degree of care should he exhibited. While it is indisputable that the newspaper industry should also hear its due share of the total burden of taxation alongwith the rest of the community when any tax is specially imposed on newspaper industry, it should he capable of being justified as a reasonable levy in court when its validity is challenged. In the absence of sufficient material. the levy of 40 plus Rs. 1000 per tonne would become vulnerable to attack. [355E-H;356A-C]
23. The reasons given by the Government to justify the total customs duty of 15% levied from March 1, 1981 or total Rs. 825 per tonne as it is currently being levied appear to be inadequate. In the Finance Minister's speech delivered on the floor of the Lok Sabha in 1981, the first reason given for the levy of 15% duty was that it was intended ' to promote a measure of restraint in the consumption of imported newsprint and thus help in conserving foreign exchange." This ground appears to be not tenable for two reasons. Nobody in Government had ever taken into consideration the effect of the import of newsprint on the foreign exchange reserve before issuing the notification levying 15 duty. Secondly, no newspaper owner can import newsprint directly. News print import is canalised through the State Trading Corporation. If excessive import of newsprint adversely affects foreign exchange reserve, the State Trading Corporation may reduce the import of newsprint and allocate lesser quantity of imported newsprint to newspaper establishments. There is. however, no need to impose import duty with a view to curbing excessive import of news print. It is clear that the Government had not considered vital aspects before Withdrawing the total exemption which was being enjoyed by newspaper industry till March 1, 1981 and industry 15 duty on newsprint. [356D-H;
357A-B]
24. Attention was particularly drawn to the statement of the Finance Minister that one of the considerations which prevailed upon the Government to levy the customs duty was that the newspapers contained 'piffles'. A 'piffle' means foolish nonsense. It appears that one of the reasons for levying the duty was that certain writings in newspapers appeared to the Minister as 'piffles'. Such action is not permissible under the Constitution. [361H; 362A]
25. Matters concerning the intellect and ethics do undergo fluctuations from era to era. The world of mind is a changing one. It is not static. The streams of literature and of taste and judgment in that sphere are not stagnant.
They have a quality of freshness and vigour. They keep on changing from time to time, from place to place and from community to community. [868A] 297
26. It is one thing to say that in view of considerations relevant to a public finance which require every citizen to contribute a reasonable amount to public exchequer customs duty is leviable even on newsprint used by newspaper industry and an entirely different thing to say that the levy is imposed because the newspapers generally contain ''piffles''. While the former may be valid if the circulation of newspapers is not affected prejudicially, the latter is impermissible under the Constitution as the levy is being made on a consideration which is wholly outside the constitutional limitations. The Government 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 amounts to conferring on the Government the power to precensor a newspaper. The above reason given by the Minister to levy the customs duty is wholly irrelevant. [363B-D] 27 The argument on behalf of the Government that the effect of the impugned levy i minimal cannot be accepted.
[365C]
28. There are factors indicating that the present levy is heavy and is perhaps heavy enough to affect circulation.
There appears to be a good ground to direct the Central Government to reconsider the matter afresh. [366C ;D] Final Report of the International Commission for the Study of Communication Problems pp. 100 add 141;
Encyclopaedia Britannica [1962] Vol. 16; p. 339; Second Press Commission Report(Vol. 11)pp. 182-183; Bennett Coleman
757; Sakal Papers(P) Ltd & Ors. v. The Union of India [1962] 3 S.C.R. 842; William B. Cammarane v. United States of America 358 US 498; 3 Led 2d 462; Jeffery Sole Bigelow Commonwealth of Virginia 421 us 809: L ed 2d60O at 610 and Robert E. Hannegan v. Esquire Inc. 327 U.S. 147: 90 L ed.
586, referred to.
Hamdard Dawakhana (WakS) Lal Kuan Delhi & Anr. v. Union of India & Ors., [1960] 2 S.C.R. 671; Lews J.
Yelentine v. F. J. Chrestensen 86 Law ed. 1292 and in re Sea Customs Act [1964] 3 S.C.R 787, distinguished.
Romesh Thapper v. The State of Madras [1950] S.C.R.
564; Honourable Dr. Paul Borg olivier & Anr. v. Honourable Dr. Anton Buttigieg [1967] A.C. 115 (P.C.); Thomas v. Collins [1944] 323 U.S. 516 Martin v. City of Struthers 11943] 319 U.S. 141, followed.
29. The classification of the newspapers into small, medium and big newspapers for purposes of levying customs duty is not violative of Article 14 of the Constitution. The object of exempting small newspapers from the payment of customs duty and levying 5% ad valorem (now Rs. 275 per MT) on medium newspapers while levying full customs duly 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 are in Indian languages catering to rural sector. There is nothing sinister in the 298 object nor can it be said that the classification has no nexus with the object to be achieved. [366F-G] Bennett Coleman & Co. & Ors v. Union of India & Ors.
[1973] 2 S.C.R. 757. referred to.
30. Quashing of the impugned notification dated March 1, 1981, which had repealed the notification dated July 15, 1977 under which total exemption had been granted would not revive the notification dated July IS, 1977. Once an old rule has been substituted by a new rule, it cases to exist and it does not get revived when the new rule is held invalid. Since the competence of the Central Government to repealer annul or supersede the notification dated July 15 1977 is not questioned, its revival on the impugned notifications being held to be void would not arise and, therefore, on the quashing of the impugned notification the petitioners would have to pay customs duty of 40% ad valorem from March 1, 1981 to February 28 1982 and 40% ad valorem plus Rs 1000 per MT from March 1, 1982 onwards In addition to it they would also be liable to pay auxiliary duty of 30% ad valorem during the fiscal year 1982-83 and auxiliary duty of 50% ad valorem during the fiscal year 1983-8 i. They would straightaway be liable lo pay the whole of customs duty and any other duty levied during the current fiscal year also. Such a result cannot be allowed to ensue. The challenge to the validity of the levy prescribed by the customs Tariffs Act, 1975 itself cannot be allowed to succeed. [370F-H]
31. The Government has failed to discharge its statutory obligations While issuing the impugned notifications. the Government is directed to reexamine the whole issue after taking into account all relevant considerations for the period subsequent to March 1, 1981.
The Government cannot be deprived of the legitimate duty payable on imported newsprint. [371D-E]
32. Having regard to the peculiar features of these cases and Article 32 of the Constitution which imposes an obligation on this Court to enforce the fundamental rights and Article 142 of the Constitution which enables this Court in the exercise of its jurisdiction to make such order as is necessary for doing complete justice in any cause or matter the following order was made: [371D-E]
1. The Government of India shall reconsider within six months the entire question of levy of import duty or auxiliary duty payable by the petitioners and others on newsprint used for printing newspapers, periodicals etc.
with effect from March 1,1981. The petitioners and others who are engaged in newspapers business shall make available to the Government all information necessary to decide the question. [37G-H]
2. If on such reconsideration the Government decides that there should be any modification in the levy of customs duty or auxiliary duty with effect from March 1,1981, it shall take necessary steps to implement its decision. [372A]
3. Until such redetermination of the liability of the petitioners and others is made, the Government shall recover only Rs. 550 per MT on imported newsprint towards customs duty and auxiliary duty and shall not 299 insist upon payment of duty in accordance wish the impugned notifications. The concessions extended to medium and small newspapers may, however, A remain in force. [372C]
4. If, after such redetermination, it is found that any of the petitioners is liable to pay any deficit amount by way of duty, such deficit amount shall be paid by such petitioner within four months from the date on which a notice of demand is served on such petitioner by the concerned authority. Any bank guarantee or security given by the petitioners shall be available for recovery of such deficit amounts. [372D]
5. If, after such redetermination, it is found that any of the petitioners is entitled to any refund, such refund shall be made by the Government within four months from the date of such redetermination.
6. A writ shall issue to the respondents. [372F] C B.N. Tiwari v. Union of India & ors, [1965] 2 S.C.R.
421, T. Devadasan v. Union of India & Anr. [1964] 4 S.C.R, 680 and Firm A.T.B. Mehtab Majid & Co. v. State of Madras & Anr. [1963] Supp 2 S.C.R, 435 at 446. relied on.
Mohd. Shaukat Hussain Khan v. State of Andhra Pradesh [975] I S.C.R. 429, Shri Mulchand Odhavji. Rajkot Borough Municipality A.I.R. 1970 S.C. 685, Koteswar Vittal Kamath v.
K. Rangappa Baliga & Co. [1969] 3 S.C.R. 40 and The case of State of Maharashtra etc. v. The Central Provinces Manganese Ors Co. Ltd.. [1977] I S.C.R. 1000, distinguished.
& ORIGINAL. JURISDICTION: Writ Petition NOS. 2656-60.
2935-40, 2941-46, 2947-52, 3402, 3467, 3595, 3600-03, 3608, 3632, 3653, 3661, 3821, 3890-93, 4590-93,. 4613-15, 5222, 5576, 5600 02, 5726 27, 7410. 8459-62, 8825, 8944 of 1981, 1325 of 1982, 470-72 of 1984. T C. Nos. 23 of 1983 and 23 of 1984.
AND Writ Petitions Nos. 3114-17 of 1981 WITH Writ Petitions Nos. 3393-93 of 1981 WITH Writ Petitions No. 3853 of 1981 WITH Writ Petitions Nos. 6446-47 of 1181 (Under Article 32 of the Constitutions of India) A.K. Sen, A.B. Divan, F.S. Nariman, K.K. Venugopal, B.R. Agarwala, Miss Vijay Lakshmi Menon, A.K Ganguli P.H. Parekh, C.S. Vaidyanalingam, D.N. Mishra, Pravin Kumar, KR. Nambiar, M.C. Dhingra, Miss Sieta Vaidyalingam, P.C. Kapur, Pramod Dayal, CM 300 Nayar, S.S, Munjral, KK .Jain, S.K. Gupta, A.l). Sangar, Ranjan Mukherjee, Sudip Sarkar, P.K. Ganguli, Miss Indu Malhotra, PR. Seetharaman and V. Shekhar for the petitioners.
K. Parasaran, Attorney General of India, Krishna Iyer, P.A. Francis, A. Subba Rao, Dalveer Bhandari and R.N. Poddar for the respondents.
F.S. .Nariman, S. Dholakia, Soli J. Sorabjee, Anil B. Divan J.B. Dadachandji S. Sukumaran, D.N. Mishra, KP. Dhanda pani, R.C. Bhatia, P.C. Kapur, A.N. Haksar, O.C.. Mathur, Miss Meera Mathur, Dr. Roxna Swamy, Arun Jetley, P.H. Parekh, Miss Divya Bhalla and Pinaki Misra for the intervener The Judgment of the Court was delivered by VENKATARAMIAH, J.
I Pleadings The majority of Petitioners in these petitions filed under Article 32 of the Constitution are certain companies, their share holders and their employees engaged in the business of editing, printing and publishing newspapers, periodicals, magazines etc Some of them are trusts or other kinds of establishments carrying on the same kind of business. They consume in the course of their 5 activity large quantities of newsprint and it is stated that 60% of the expenditure involved in. the production of a newspaper is utilised for buying newsprint, a substantial part of which is imported from abroad. They challenge in these petitions the validity of the imposition of import duty on newsprint imported from abroad under section 12 of the Customs Act, 1962 (Act 52 of 1962) read with section 2 and Heading No. 48/01/21 Sub-heading No. (2) in the First Schedule to the Customs Tariff Act, 1975 (Act 51 of 1975) and the levy of auxiliary duty under the Finance Act, 1981 on newsprint as modified by notifications issued under section 25 of the Customs Act, 1962 with effect from March 1, 1981.
The first set of writ petitions challenging the above levy was filed in May, 1981. At that time under the Customs Act, 1962 read with the Customs Tariff Act, 1975, customs duty of 40'% ad valorem was payable on newsprint. Under the Finance Act, 1981 an auxiliary duty of 30% ad valorem was payable in addition to the customs duty. But by notifications issued under section 25 of the Customs Act, 1962, the customs duty had been reduced to 10% 301 ad valorem and auxiliary duty had been reduced to 5% ad valorem in the case of newsprint used for printing newspapers, books and A periodicals.
During the pendency of these petitions while the Customs Tariff Act, 1975 was amended levying 40% ad valorem plus Rs. 1,000 per MT as customs duty on newsprint, the auxiliary duty payable on all goods subject to customs duty was increased to 50% ad valorem. But by reason of notifications issued under section 25 of the Customs Act, 1962 customs duty at a flat rate of Rs. 550 per MT and auxiliary duty of Rs. 275 per MT are now being levied on newsprint i.e. in all Rs. 825 per MT is now being levied.
The petitioners inter alia contend that the imposition of the import duty has the direct effect of crippling the freedom of speech and expression guaranteed by the Constitution as it has led to the increase in the price of newspapers and the inevitable consequence of reduction of their circulation. It is urged by them that with the growth of population and literacy in the country every newspaper is expected to register an automatic growth of at least 5% in its circulation every year but this growth is directly impeded by the increase in the price of newspapers. It is further urged that the method adopted by the Customs Act, 1962 and the Customs Tariff Act, 1975 in determining the rate of import duty has exposed the newspaper publishers to the Executive interference. The petitioners contend that there was no need to impose customs duty on news- print which had enjoyed total exemption from its payment till March 1, 1981, as the foreign exchange position was quite comfortable. Under the scheme in force, the State Trading Corporation of India sells newsprint to small newspapers with a circulation of less than 15,000 at a price which does not include any import duty, to medium newspapers with a circulation between 15,000 and 50,000 at a price which includes 5% ad valorem duty (now Rs. 275 per MT) and to big newspapers having a circulation of over 50,000 at a price which includes the levy of 15% ad valorem duty (now Rs. 825 per MT). It is stated that the classification of newspapers into big, medium and small newspapers is irrational as the purchases on high seas are sometimes effected by a publisher owning many newspapers which may belong to different classes. The petitioners state that the enormous increase in the price of newsprint subsequent to March 1, 1981 and the inflationary economic conditions which have led to higher cost of production have made it impossible for the industry to bear the duty any longer. Since the capacity to bear the duty is an essential element in determining the reasonableness 302 Of the levy, it is urged, that the continuance of the levy is violative of Article 19(1)(a) and Article 19(1)(g) of the Constitution. It is suggested that the imposition of the levy on large newspapers by the Executive is done with a view to stifling circulation of news. Papers which are highly critical of the performance of the administration.
Incidentally the petitioners have contended that the classification of newspapers into small, medium and big for purposes of levy of import duty is violative of Article 14 of the Constitution. The petitioners have appended to their petitions a number of annexures in support of their pleas.
On behalf of the Union Government a counter-affidavit is filed. The deponent of the counter-affidavit is R. S.
Sidhu, Under Secretary to the Government of India, Ministry of Finance, Department of Revenue. In paragraph 5 of the counter-affidavit it is claimed that the Government had levied the duty in the public interest to augment the revenue of the Government. It is stated that when exemption is given from the customs duty, the Executive has to satisfy itself that there is some other corresponding public interest justifying such exemption and that in the absence of any such public interest, the Executive has Do power to exempt and that it has to carry out the mandate of Parliament which has fixed the rate of duty by the Customs Tariff Act, 1975. It is also claimed that the classification of newspapers for purposes of granting exemption is done in the public interest having regard to the relevant considerations. It is denied that the levy suffers from any malafides. It is pleaded that since every section of the society has to bear its due share of the economic burden of the State, levy of customs duty on newsprint cannot be considered to be violative of Article 19 (1) (a) of the Constitution. But regarding the plea of P the petitioners that the burden of taxation is excessive, the counter affidavit states that the said fact is irrelevant to the levy of import duty on newsprint. In reply to the allegation of the petitioners that there was no valid reason for imposing the duty as the foreign exchange position was quite comfortable, the Union Government has stated that the fact that the foreign exchange position was quite comfortable was no bar to the imposition of import duty. It is further pleaded that since the duty imposed is an indirect tax which would be borne by the purchaser of newspaper, the petitioners cannot feel aggrieved by it.
II A Brief History of the levy of Customs Duty on Newsprint In order to appreciate the various contentions of the parties 303 it is necessary to set out briefly the history of the levy of customs A duty on newsprint in India.
Even though originally under the Indian Tariff Act, 1934, there was a levy of customs duty on imported paper, exemption had been granted for import of white, grey or unglazed newsprint from the levy of any kind of customs duty in excess of 1.57 per cent ad valorem but subsequently a specific import duty of Rs. 50 per MT used to be levied on newsprint imports upto 1966. The question of levy of customs duty on newsprint was examined by the Inquiry Committee on Small Newspapers. In its Report submitted in 1965 that Committee recommended total exemption of newsprint from customs duty because in 90x/Q of the countries in the world no such levy was being imposed because newspapers played a vital role in a democracy. On the basis of the said recommendation, the Government of India abolished customs duty on newsprint altogether in the year 1966 in exercise of its power under section 25 of the Customs Act, 1962. The price of newsprint was Rs. 725 per MT during the year 1965- 66 but there was a sudden spurt in its price in 1966-67 when it rose to Rs. 1155 per MT. During the period 1966-71 although almost all imported goods suffered basic regulatory and auxiliary customs duty, there was no such levy on newsprint in spite of severe foreign exchange crisis which arose on the devaluation of the Indian Rupee in 1966. But on account of the financial difficulties which the country had to face as a consequence of the Bangladesh war in 1971, a regulatory duty of 2 1.2% was levied on newsprint imports to meet the difficult situation by the Finance Act of 1972. The price of newsprint in the year 1971-72 was Rs. 1134 per MT.
The above 2 1/2% ad valorem regulatory duty was abolished by the Finance Act of 1973 P and was converted into 5% auxiliary duty by the said Act. This levy of 5% was on all goods including newsprint imported into India. On April 1, 1974 under the Import Control order issued under section 3 of the Imports and Exports Control Act, 1947, import of newsprint by private parties was banned and its import was canalised through the State Trading Corporation of India. In 1975, the Customs Tariff Act, 1975 came into force. By this Act the Indian Tariff Act, 1934 was repealed. Under section 2 read with Heading No. 48.01/ 21 of the First Schedule to the Customs Tariff Act, 1975, a levy of basic customs duty of 40% ad valorem was imposed on newsprint. But in view of the exemption granted in the year 1966 which remained in force, the imposition made by 304 the Customs Tariff Act, 1975 did not come into force. Only 5% auxiliary duty which was levied from April 1, 1973 continued to be in operation. In the budget proposals of July, 1977, the 5% auxiliary duty was reduced to 2 1/2% but it was totally abolished by a notification issued under section 25 of the Customs Act on July 15, 1977. The notification dated July IS, 1977 read as follows:
"NOTIFICATION CUSTOMS GSR No. In exercise of the powers conferred by sub section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of lndia in the Department of Revenue and Banking No. 72-Customs dated the 18th June 1977, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts newsprint, falling under sub heading (2) of Heading No. 48.01 21 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from the whole of that portion of the duty of customs leviable thereon, which is specified in the said First Schedule.
sd/--
(Joseph Dominic)
Under. Secretary to the Government of India."
The price of newsprint during the year 1975-76 was Rs. 3676 per MT. The total exemption from customs duty imposed on newsprint was in force till March 1, 1981. In the meanwhile the Central Government notified increased salaries and wages to k employees of newspaper establishments in December, 1980 on the recommendations contained in the Palekar Award. On March 1, 1981, the notification dated July 15, 1977 issued under section 25 (1) of the Customs Act, 1962 granting total exemption from customs duty was superseded by the issue of a fresh notification which stated that the Central Government had in the public interest exempted newsprint imported into India for printing of newspapers, books and periodicals from so much of that portion of the duty of customs leviable thereon as was in excess of 10 per cent ad valorem. The effect of the said notification was that publishers of newspapers had to pay ten per cent ad valorem customs duty on imported newsprint.
By another notification issued at about the same time auxiliary 305 duty imposed by the Finance Act of 1981 above 5 per cent ad valorem was exempted in the case of newsprint. The net result was that a total duty of IS per cent ad valorem came to be imposed on newsprint for the year 1981-82.
The explanation given by the Government in support of the above notification was as follows:
"Customs duty on newsprint:
Originally, import of newsprint did not attract any customs duty. The Government of India abolished the -. Customs duty on newsprint after the devaluation of the rupee on the recommendation of the Inquiry Committee on Small Newspapers (1965). The Committee had mentioned in its report that 80% of the newsprint in international trade was free from customs duty and had recommended complete abolition of customs duty on newsprint. However, during the Bangladesh crisis in 1971, a2.1/2% ad valorem regulatory duty was imposed on newsprint imports. Subsequently, this was abolished on April 1,1973 and in its place a 5% auxiliary customs duty on newsprint imports was proposed in the Union Budget Proposals for 1973-74. While no customs duty was levied on newsprint because of the exemption granted by Customs Notification No. 235/F.No.527/1/76-CUS (TU) dated August 2,1976 of the Department of Revenue and Banking, 5% auxiliary duty was continued to be levied on imported newsprint till July 15,1977 when the Ministry of Finance, Department of Revenue by its Notification No. 148/F.No. Bud (2) Cus/77 dated July l5,1977 exempted newsprint from the whole of duty of customs. Prior to this the Ministry of Finance, Department of Revenue vide its Customs Notification No. 72/F. No. Bud. (2) Cus/77 dated June 18,1977 had reduced the auxiliary duty to 2 1/2%.
In the Budget proposals for the current year, the Minister of Finance has proposed a customs duty of 15% on newsprint imports which has become effective from March 1,1981 because of the Customs Notification No. 24/F. No. Bud (Cus)/81 dated March 1,1981. This 15% customs duty constitutes 10% basic duty and 5% auxiliary duty." 306 The price of imported newsprint in March 1,1981 was A Rs. 4,560 per MT. The extract from the speech of the Finance Minister in support of the imposition of a total 15% of duty (10% basic duty and 5% auxiliary duty) on newsprint is given below;
"The levy of 15 per cent customs duty on newsprint has understandably attracted a good deal of comment both within the House and outside. As it has been explained in the Budget speech, this levy is intended to promote a measure of restraint in the consumption of imported newsprint and thus help in conserving foreign exchange. In the light of the observations made by the Hon. Members in the course of the General Debate on the Budget I had assured the House that I would try to work out a scheme of providing relief to small and medium newspapers about which Members had voiced their special concern. We have now worked out the modalities of a scheme for affording relief to small and medium newspapers. Under this Scheme, the State Trading Corporation would sell imported newsprint to small newspapers at a price which would not ! include any amount relatable to import duty. Medium newspapers will get their newsprint at a price which, would include an amount relatable to import duty 'of S per cent ad valorem. Big newspapers would, however, pay a price which will reflect the full duty burden of 15 per cent ad valorem. There is a definition of small, medium and big newspapers in the Press Council. At the moment the present definition is that these which have a circulation of 15,000 or less are classified as small, those with a circulation of more than 15,000 but less than 50,000 are classified as medium and those with a circulation of over 50,000 are called big newspapers. Therefore, the small newspapers with a circulation of 15,000 and less will not pay any customs duty those with a circulation between 15,000 and 50,000 will pay customs duty of 5 per cent and with a circulation of over 50,000 will pay 15 per cent.
Suitable financial arrangements will be worked out as between' Government and the State Trading Corporation to enable the STC to give effect to these concessions.
As Hon. Members are aware, the categorisation of newspapers as small, medium and big in 307 terms of circulation is already well understood in the A industry and is being followed by the Ministry of Information and Broadcasting for purposes of determining initial allocation of newsprint and for setting the rates of growth of consumption of newsprint by various newspapers from year to year. The State Trading Corporation will, for purposes of the present scheme, follow, the same categorisation of newspapers into small, medium and big. These arrangements will. in effect, provide a relief of about Rs. 5.86 crores to small and medium newspapers. " The relevant provisions of the laws imposing customs duty and auxiliary duty on newsprint which arise for consideration are these:
Section 12 of the Customs Act, 1962 reads:
"12. Dutiable goods.-(1) Except as otherwise provided n in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (5l of 1975), or any other law for the time being in force, on goods imported into or exported from India.
(2).......... , Section 2 of the Customs Tariff Act, 1975 reads:
"2. Duties specified in the Schedules to levied.-The rates at which duties of customs shall be levied under the Customs Act, 1962, are specified in the First and Second Schedules." The relevant part of Chapter 48 of the First Schedule to the Customs Tariff Act, 1975 which deals with import tariff read in 1981 thus:
"Heading Sub-heading No. Rate of duty Duration No. and description Standard Preferential when of article Areas rates of duty are protective 308 ------------------------------------------------------- (1) (2) (3) (4) (5) ------------------------------------------------------- 48.01/21...................................................
(2) Newsprint containing mechanical wood pulp amounting to not less than 70 per cent of the fibre content 40% - - (excluding chrome, marble, flint, poster, stereo and art paper) ......................................................" Newsprint used by the petitioners falls under Sub- heading (2) of Heading No. 48.O1/21 by Which 40% ad valorem customs duty is levied on it. By the Finance Act of 1982 in sub-heading No. (2) of Heading No. 48.O1/21, for the entry in column (3), the entry "40% plus Rs. 1,000 per tonne was substituted.
The relevant part of section 44 of the Finance Act, 1982 which levied an auxiliary duty of customs read thus:
"44. (1) In the case of goods mentioned in the First Schedule to the Customs Tariff Act, or in that Schedule, as amended from time to time, there shall be levied and collected as an auxiliary duty of customs an amount equal] to thirty per cent of the value of the goods as determined in accordance with the provisions of section 14 of the Customs Act, 1962 (hereinafter referred to as the Customs Act).
......................................................" The above rate of auxiliary duty was to be in force during the financial year 1982-83 and it was open to the Government to grant exemption from the whole or any part of it under section 25 of the Customs Act, 1962.
Section 45 of the Finance Act, 1983 imposed fifty per cent of the value of the goods as auxiliary duty in the place of thirty per cent imposed by the Finance Act, 1982.
309 But by notifications issued on February 28,1982 under section A 25 (2) of the Customs Act, 1962, which were issued in supersession of the notification dated March 1, 1981, Rs.
550 per tonne was imposed as customs duty on newsprint and auxiliary duty was fixed at Rs. 275 per tonne. In all Rs. 825 per tonne of newspaper has to be paid as duty. The high sale price of newsprint had by that time gone up above Rs. 5,600 per tonne.
What is of significance is that when the Government was of the view that the total customs duty on newsprint in the public interest should be not more than 15 per cent and when these writ petitions questioning even that 15 per cent levy were pending in a this Court, Parliament was moved by the Government specifically to increase the basic customs duty on newsprint by Rs. 1,000 per tonne by the Finance Act, 1982. Hence today if the Executive Government withdraws the notifications issued under section 25 of the Customs Act, a total duty of 90 per cent plus Rs. 1000 per tonne would get clamped on imported newsprint. D The effect of the imposition of 15 per cent duty may to some extent have led to the increase in the price of newspapers in 1981 and it resulted in the fall in circulation of newspapers. On this point the Second Press Commission has made the following observations in its Report (Vol. 1 page 18): E "Fall in circulation during 1981.
94. To examine recent trends in, circulation and their relationship to recent trends in the economic environment, the Commission's office undertook an analysis of the Audit Bureau of Circulations (ABC) certificates for the period July 1980 to June 1981. It was found that there was a decline in circulation in the period January-June 1981 compared to the previous six-month period in the case of dailies and periodicals." The two important events which had taken place during the period between July, 1980 to June, 1981 were the enforcement of the Palekar Award regarding the wages and salaries payable in the newspaper industry and the imposition of the customs duty of 15% on the imported newsprint. Under the newsprint policy of the Government there are three sources of supply of newsprint-(i) high 310 seas sales, (ii) sales from the buffer stock built up by the State A Trading Corporation which includes imported newsprint and (iii) newsprint manufactured in India.
Imported newsprint is an important component of the total quantity of newsprint utilised by any newspaper establishment.
III The Importance of Freedom of Press in a Democratic society and the Role of Courts.
Our Constitution does not use the expression 'freedom of press' in Article 19 but it is declared by this Court that it is included in Article 19(1)(a) which guarantees freedom of speech and expression. (See Brij Bhushan & Anr. v. The State of Delhi(l) and Bennett coleman & Co. & Ors. v. Union of lndia & ors.(2) . The material part of Article 19 of the Constitution reads:
"19. (1) All citizens shall have the right- (a) to freedom of speech and expression;
.........................................................
(g) to practise any profession, or to carry on any occupation, trade or business, (2) Nothing in sub-clause (a) of clause (1) shall affect the
