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

c The Judgment of the Court was delivered by VENKATARAMIAH, J. I Pleadings Tb,e majority . of Petitioners in the.se petitions filed under . D 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 · consu.me in the. course of their activity large quantities of newsprint arid it is stated that 60% of . the' expenditure .involved in the production of a newspaper is utilised for.buying newsprint, a supstantial 'part of.which is import- . ed 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 F , 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. G The first set of writ petitions challenjing 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'ill addition to the customs duty. But by notifications.issued under section 25 of IJ the attstoms Act, 1962, the customs duty had been reduced to 10%

iNDiAN EXPRESS v. UNiON (Venkataramiah, J.) 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 va/ortm 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% B ad Pa!ortm. 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 a/ia 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 D,, 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· E print which had enjoyed total exemption from its payment till March l, 1981, as the foreign exchange position was quite comfor· table. Under the scheme in force, the State Trading Corporation of India sells newsprint to small newspapers with a circulation of iess than 15,000 at a price which does not include any import duty,to medium newspapers with a circulation between 15,000 and F 50,000 at a price which includes 5% ad valorem duty (now Rs. 27$ 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 G 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 I, 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 aliy longer. Since the capacity to bear the duty is an essential element in determining the reasonableness

302 SUPREME COURT REroll'Il! [198!] 2 S.C.R, o( the levy, it is urged, that th.e continuance. of the levy is violative of Article 19{1)(a) and Article 19(J)(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 ofnews- papers which are highly critical of the performance of the adminis- tration. lncideutally 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 an- nexures 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 c Secretary to the Government of India, Ministry of Finance, Depart- .inent of Revenue, In paragraph S of the counter-affidavit it is claimed that the Government .had levied the duty in the public • "j'..;.

interest to augment the revenue of the Government. It is stated that when exemption is given from the customs duty, the Executive \.- f,,,. has to satisfy itself that there is some other corresponding publfc .. D j interest justifying such exemption and that in the absence of any such public interest, the Executive has no power to exempt and that • it bas to carry out the mandate of Parliament which has fixed the J;. rate of duty by the Customs Tariff Act, 1975. It is also claimed that the classification of newspapers for purposes of granting exemp· tion is done in the public interest having regard to the relevant considerations. It is denied that the levy suffers from any mala ..- '•~ fides. 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 (I) (a) of the Constitution. But regarding the pica of '~ the petitioners that the burden of taxation is excessive, the counter- affidavit states that the said fact is irrelevant to the levy of import !- dirty 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 com· G fortable 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 ff In order to appreciat~ the various contentions of the parties ·~ "

' INDiAN EXPRESS v. UNION (Venkataramiah, }.) 303

it is necessary to set out briefly the history of the levy of cumtoms 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 qcess 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 90% of the countries in the world c 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 l~ia 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 Sl.ldden D 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 -.'-,_t_ which arose on the devaluation of the Indian Rupee in 1966. But on account of the financial difficulties which the country bad to face as a consequence of the Bangladesh war in 1971, a regulatory duty of 2 1.23 was levied on newsprint imports to meet the difficult situation by the Finance Act of 19.72. The price of newsprint in the year 1971-72 was Rs. 1134 per MT. The above 2 1/23 ad valorem regulatory duty was abolished by the Finance Act o'r 1973, r and was converted into 5% auxiliary duty by the said Act. This 1 levy of 5% was on all goods including newsprint imported into India. ·On April 1, i974 under the'~Import Control Order issned 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 G 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. 48.0ll 2lrof 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 H

SUPRBMJl COURT Rlll'ORTS [1985] 2 S.C.R.

tlie Customs Tariff Act, 1975 did not come into force. Onfy 5% A auxiliary duty which was levied from April I, 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 nptification dated July 15, 1977 read as follows : ·o . "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) c and fa. supersession of the notification of the Government oflndia in the Department of Revenue and Banking No. '2--Customs dated the 18th June 1977, the Central Govern- . ment, being satisfied that it is necessary fa the public interest so to do, hereby exempts newsprint, falling under sub- heading (2) of Heading No. 48.0l' 21 of the First Schedule D fo the Customs Tariff Act, 1975 (51 of 19'75), when import- ed into India, from the whole of that portion of the duty of customs Ieviable thereon, which is specified in the said First Schedule. sd/- (Joseph Dominic) '·· Under Secretary to the Government of India." The price ofi newsprint ~during; the year 1975-76 was Rs. 36\6 per MT .. The total exemption from customs duty imposed on newsprint was in force till Match I, 1981. In the meanwhile F .. the Central Government notified increas·ed salaries and wages to e'inployees of newspaper establishments, in December, 1980 on the ~ommedations contained in , the Palekar Award. On March I, l981, 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 Jor printing of newspapers, books 11nd 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

INDIAN EXPRESS v. UNION (Venkataramiah, J.) 305 .,,, ' duty imposed by the Fiuance Act of 1981 above S per cent A ad va/orem was exempted in the case of newsprint. The net . result was that a total duty of 15 per cent ad valorem7came to belimposed on newsprint for the year 1981-82. The explanation given by the Government in support of the above notification was as follows : ·B

"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 c on Small Newspapers (1965). The Committee had men- tioned in its report that 80% of the newsprint in interna- tional trade was free from customs duty and had recom- mended complete abolition of customs duty on newsprint. However, during the Bangladesh crisis in 1971, a2.l/2% ad D 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% a~\iary 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 15,1977 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%. G In the Budget proposals for the current year, the Minister of Finance has proposed a customs duty ofl5% 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% ~toms (luty co11stitutes 10% basic duty aQd 5% auxiliary duty." H

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

The price of imported newsprint in March 1,1981 was Rs. 4,560 per MT. The extract from the speech of the Finance Minister in support of the imposition of a total 15% of dilly (10% basic duty and 53 auxiliary duty) on newsprint is given below ;

"The levy of 15 per cent customs duty on newsprint ,B 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 c exchange. In the light of the bbservations made by the Hon. Members in the course of the General Debate on • the Budget I had assured the Ho11se that I would try to work out ar 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 newspa- pers •.. Under this Scheme, the. State Trading Corporation would •sell imported newsprint to small newspapers at a price which would not I include any amount . · relatable to imporfduty. Medium newspapers will get . their newsprint at a price which ;would include an amount relatable to import duty 'of 5 per·'cent ad va/orem. Big newspapers would, however, pay a price which will rellect ·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 . F that' these which have a circulation of 15,000 or less are classilied'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 arrange- ·' ments will be worked -0ut as between~ Government and the State Trading Corporation to enable the STC to give effect · tb these c6ncessions. 'As Hon. Members are aware, the If. cat~brisation of newspapers as small, medium and big in

INDiAN EXPRESS v. UNiON (Venkataramiah, J.) 307

terms of circulation is already well understood in the industry and is being followed by the Ministry of Informa· tion 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 B year to year. The State Trading Corporation will, for purposes of the present scheme, follow'.the same categorisa- tion 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 c and auxiliary duty on newsprint which arise for consideration are these :

Section 12 of the Customs Act, 1962 reads :

"12. Dutiable goods.-(lj Except as otherwise provided D 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 (51 of 1975), or any other law for the time being in force, on ·goods imported into or exported from India.

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 F 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 : G

"Heading Sub-heading No. Rate of duty Duration . No. and description Standard Preferenti'al when of article Areas rates of .. ..;. duty are protective H

(19$5) 2 S.C.lt;

B (2) Newsprint containing mechanical wood pulp amounting to not Jess than 70 per cent of the fibre content 40% (excluding chrome, c marble,• flint, poster, stereo and art paper) ,. ............................................................................" Newsprint used by the petitioners falls under Sub·heading (2) of Heading No. 48.01/21 by which 403 ad valorem customs duty D is levied on it. By ,the Finance Act of 1982 in sub-heading No. (2) of Heading No. 48.01/21, 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: .E "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 custom~. 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.

INDIAN l!KPRms v. UNION (Venkataramiah, J.) 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 \onne. In all Rs. 825 per tonne of newspaper has to. be paid as duty.. The high sale price of newsprint had by B 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 G 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 l~d 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 duringjl981.

• 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 F Bureau of CircuJations (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." G 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 \:he Government there are three sources of supply of newsprint-(i) high 8

'.l!O [1985] 2 s..c.tt. seas sales, (iiY 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. B III

The Importance of Freedom of Press in a Democratic society and the Role of Courts. c Out 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(l)(a) which guarantees freedom of speech and expres- sion. (See Brij Bhushan & .for. v. The State of Delhi(') and Bennett Coleman & Co. & Ors. v. Union of India & Ors.(') D The material patt of Article 19 of the Constitution reads :

"19. (1) All citizens shall have the right- (a) to freedom of speech and expression ; ..•...................................................... I (g) ·to practise any profession, or to carry on any • occupation, trade or business,

(2) Nothing in sub-clause (a}ofclause (!)shall alrect the operation of any existing law, or prevent the State from F making any Jaw, in so far as such Jaw imposes reasonable restrictions on the exercise of the right conferred by the said sub-clause in the interests of the sovereignty and integrity of India, the security of the State, friendly rela- tions with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incite- G ment to an offence. ........................................................................... (6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing Jaw in so far as it • imposes, or prevent the State from making any Jaw impos-

{I) (1950) S.C.R. 605. (2) [1973] 2 S.C.R. 757

lNDiAN llXPl\ESS v. UNION (Penkataramlah, J.) 31 l

ing, in the interests of the general public, reasonabl~ A restrictions on the exercise of the right conferred by the said sub-clause ................................................ "

The freedom of press, as one of the members of the Consti- tuent Assembly said, is one of the items around which the greatest and the bitterest of constitutional struggles have been waged in all countries where liberal constitutions prevail. The said freedom is attained at considerable sacrifice and suffering and ultimately it has come to be incorporated in the various written constitutions. James Madison when he offered the Bill of Rights to the Congress in 1789 is reported as having said : 'The right of freedom of speech c is secured, the liberty of the press is expressly declared to be beyond the reach of this Government'. '(See 1 Annals of Congress ( 1789- 96) p. 141). Even where there are no written constitutions, there are well established constitutional conventions or judicial pronounce- ments securing the said freedom for the people. The basic docu- ments of the United Nations and of some 9ther international bodies to which reference will be inade hereafter give prominence to the said right. The leaders of the Indian independence movement attached special significance to the freedom of speech and expres- sion which included freedom of press apart from other freedoms. During their struggle for freedom they were moved by the American Bill of Rights containing the First Amendment to the Constitution E of the United States of America which guarnteed the freedom of the press. Pandit Jawaharlal Nehru in his historic resolution con- taining the aims and objects of the Constitution to be enacted by the Constituent Assembly said that the Constitutions. should guarantee and secure to all the people of India among others freedom of thought and expression. He also stated elsewhere that "I would rather have a completely free press with all the dangers involved in the wrong use of that freedom than a suppressed or regnlated press" (See D.R. Mankekar: The Press under Pressure (1973) p. 25). The Constituent Assembly and its various commit- tees and sub-committees considered freedom of speech and expres- G sion which included freedom of press also as a precious right. The Preamble to the Constitution say(that it is intended to secure to aU citizens among others liberty of thought, expression, and belief. It is significant that in the kinds of restrictions that may be imposed on the freedom of speech and expression any reasonable restriction . impossible in the public interest is not one enumerated in clause (2)

· ·a12 . &UPIUIMll COURT REPQRTS 1· [1985) 2 S.C;R.

of Article 19. ln Romesh Thappar v. The State. of Madras and 4 Brij Bhushan's case (supra) this Court firmly expressed its view <.~ that there could not be any kind of restriction on the freedom of speech and expression other than those mentioned in Article 19(2) and thereby made it clear that there could not be any interference with that freedom in the name of public interest. Even when clause B (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, the security of the s·tate, friendly relations . with foreign states, public order, decency or morality in relation to contempt of court, defa· C.- · mation or incitement to an offence, Parliament did not choose to. include a clause enabling the imposition of reasonable restrictions in the public interest.

Article 19 of the Universal Declaration of Human Rights, 1948 declares : "Every one bas the right to freedom of opinion and expression ; this right includes freedom to hold opinions without interference and to seek, receive and impart information · and ideas through'·any media and regardless of frontiers".

Article 19 of the International Covenant on Civil and Political E- Rights, 1966 reads :

"Article 19

1Copy pinpoint1. Everyone shall have the right to hold opininos without interference. F

2Copy pinpoint2. Everyone shall have the right ta freedom of expression; . this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, through any other media of his choice.

3Copy pinpoint3. The exercise of the rights provided for in Paragraph 2 of this Article carries with it special duties and responsibilities. It may therefore be subject to certain restrictions, but these shall only be such as are provid· ed by faw and are necessary :.

tNDiAN EXPRESS v. UNION (flenkalaramiah, I.) 313

(a) Fot respect of the rights or reputations of others;

(b) For the protection of national security or of public order (order public), or of public health or morals." Article 10 of the European Convention on Human Rights reads :

"Article 10 , 1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without c interference by public authority :md regardless of frontiers. This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises. D

2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be .subject to such formalities, conditions, restrictions or penalities as are prescribed by law and are necessary in a democratic · society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and · impartiality of the judiciary." F The First Amendment to the Constitution of the United States of America declares :

"Amendment I

Congress shall make no law respecting an establishment of G religion, or prohibiting the free exercise thereof; or abridg- • ing the freedom of speech or of the press ; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances."

Frank C. Newman and Karel Vasak in their article on 'Civil B

314 . SUPkll¥ll COURT Rl!P{)RTS [1985] 2 s.c.R.

A and Political Rights' in the International Dimensions of Human Rights (Edited by Karel Vasak) Vol. I state at pages 155-156 thus:

"(ii). Freedom of opinion, expression, information and communication.

B· A pre-eminent human right, insofar as it allows everyone to have both an intellectual and political activity, freedom of expression in the broad sense actually includes several specific rights, all linked together in a "continuum"· maoe increasingly perceptible by modern technological advance. What is primarily involved is the classic notion of freedom c of opinion, that is to say, the right to say what one thinks and not to be harassed for one's opinions. This is follow- ed by freedom of expression, in the limited sense of the term, which includes the right to seek, receive and impart information and ideas, regardless' of frontiers, either orally, in writing or in print, in the form of art, or through any other media of one's choice. When freedom of expression is putto use by the mass media, it acquires an additional dimension and becomes freedom of information. A new freedom is being recognised which is such as to encompass the multiform requirements of these various elements, while incorporating their at once individual and collective character, their implications in terms of both "rights" and "responsibilities" : this is the right to communication, in connection with which Unesco has. recently undertaken con!\id.erable work with a view to its further elaboration and implementation." ... F. "Many,Voices, One World" a publication of UNESCO which contains the Final Report of the International Commission for the study of Communication · Problems, presided over by Sean Mac Bride, in part V thereof dealing with 'Communication Tomorrow' at page 265 emphasizes the importance of freedom of speech and G pr~ss in the preservation of human rights in the following terms :

"IV. Democratization of Communication. Human Rights Freedom of speech, of the press, of information and of B assembly are vital for the realization of human righ :i

INDIAN EXPRESS v. UNION (Venkataramiah, /.) 315 ~ Extension of these communication freedoms to a broader ' > A individual and collective right to communicate is an evolv· ing principle in the democratization process. Among the human rights to be emphasized are those of equality for women and between races, Defence of all human rights is one of the media's most vital tasks, We recommend :

52. All those working in the mass media should contribute 8 to the fulfilment of human rights, both individual and collective, in the spirit of the Uhesco Declaration on the ' mass. media and the Helsinki Final Act, and the·Inter· national Bill of Human Rights. The contribution of the media in this regard is not only to foster these principles c but also to expose all infringements, wherever they occur, and to suppport those whose rights have been neglected or violated, Professional associations and public opinion should support journalists subjected to pressure or who suffer adverse consequences from their dedication to the defence of human right!;. 0

53. The media should contribute to promoting the just cause of peoples struggling for freedom and independence and their right to live in peace i'nd equality without foreign interference. This is especially important for all oppressed peoples who, while struggling against colonialism, religious E and racial discrimination, are deprived of opportunity to make their voices heard within their own countries.

54. Communication needs in a democratic society should be met by the extension of specific rights such as the right to be informed, the right to infrom, the right to privacy, the right to practicipate in public communication~an elements of a new concept, the right to communicate. In developing what might be called a new era of social rights, we suggest all the implications of the right to communicate to further explored. G Removal of Obstacles

Communication, with its immense possibilities for influen- ajng the minds and behaviour of people, can be a powerful means of promoting democratization of society and of widening public participation in the decision•making H

316 SUPREME COURT REPORTS [1985] 1 s.c.R.

process. This depends on the structures and practices of the media and their management and to what extent they facilitate broader access and open the communication process to a free interchange of .ideas, information and experience among equals, without dominance of discrimi· nation." B In today's free world freedom of press is the heart of social and p.olitical 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 still G available for all sections of society. The purpose of the press is to advance the public interest by publishing facts and opinions witho.ut which a democratic electorate cannot make responsible judgments. N~wspaper being surveyors of news and views having a bearing on public administration very often carry material which would not be palatable to governments and other authoritieli. The D authors of the articles which are published in newspapers have to be critical of the action of government in order to expose its weak· nesses. Such articles tend to · become an irritant or even a threat to power. Governments naturally take recourse to suppress news- papers publishing such articles in different ways. Over the years, governments in different part& of the world have used diverse methods to keep press under control. They have followed carrot- stick methods. Secret payments of money, open monetary grants and subventions, grants of lands, postal concessions, Government • advertisements, conferment of titles on editors and proprietors of newspapers, inclusion of press barons in cabinet and inner political councils etc.· constitute one. method of influencing the press. The other kind of pressure is one of using force against the press: Enactment of laws providing for precensorship, seizures, interference with the transit of newspapers and demanding security • deposit, imposition of restriction on the price of newspapers, on the number of pages of newspapers and the area that can be devoted for advertisements, withholding of Government advertisements, increase of postal rates, imposition of taxes on newsprint, .canalisa- ' tion of import of newsprint with the ·-object of making it unjustly costlier etc. are some of the ways in which Governments have tried to interfere with freedom of press. It .is with a view to checking such malpractices which interfere with free flow of information, demo· c;ratic c 0 nstit11tion~ all over the worl\i have made provisions $uara11-

INDIAN EXPRESS v. UNI0;-1 (Venkataramiah, J.) 317

teeing the freedom of speech and expression laying down the limits of interference with it. It is, therefore, the primary duty of all the A national courts to uphold the said freedom and invalidate all laws or administrative actions which interfere with it, contrary to the constitutional mandate. Thomas I. Emerson in his article entitled 'Toward a General B Theory of the First Amendment' (The Yale Law Journal, Vol. 72,877at p. 906) while dealing with the role of the Judicial institu· • tions in a democratic society and in particular of the apex court of U.S.A. in upholding the freedom of speech and expression writes :

"The objection that our judicial institutions lack the political power and. prestige to perform an active role in c protecting freedom of expression against the will of the majority raises more difficult questions. Certainly judicial institutions must reflect the traditions, ideals and assump- tions, and in the end must respond to the needs, claims and expectiations, of the social order in which they operate. D They must not, and ultimately can 'not, move too far ahead or lag too far behind. The problem for. the Supreme Court is one of finding the proper degree of responsiveness and leadership, or perhaps better, of short-term and long- term responsiveness. Yet in seeking out this position the Court should not under estimate the authority and prestige E it has achieved over the years. Representing the "con- science of the community" it has come to possess a very real power to keep alive and vital the higher· values and goals towarils which our society imperfectly strives .......... Given its prestige, it would appear that the power of the F Court to protect freedom of expression is unlikely to be • • substantially curtailed unless the whole structure of our democratic institutions is threatened." • What is stated above applies to the Indian courts with equal G force. In Ramesh Thappar's case (supra) Brij Bhushan's case (supra), Express Newspapers (Private) Ltd. & Anr. v. The Union of India & Ors.,(!) Sakal Papers (P) Ltd. &. Ors. v. The Union of India(') and Bennett Coleman's case (supra) this Court has very strongly pronoun-

(I) (1959] S C.R. 12. (2) (1962] 3 S.C.R. 842. H

31S SUPREME COURT REPORTS [1985] 2 s.c.a.

ced in favour of the freedom of press. Of these, we shall refer to some observations made by this Court in some of them.

In Ramesh Thappar's case (supra) this Court said at page 602: "(The.freedom) ...... lay at the foundation of all demo- ·. cratic organisations, for without free political discussion on no public education, .so essential for the proper functioning of the 11rocesses of popular government, i,s possible. A freedom <;>f such amplitude might involve risks of abuse ..............,.... "(But) it is better to leave a few of its • noxious branches to their luxuriant growth, than, by prun- ing them away, to injure the vigour of those yielding the c proper fruits"." In Bennett Coleman's case (supra) A.N.'Ray, C.J. on behalf of the majority said at page 796 thus : "The faith of citizen is that political wisdom and virtue D will sustain themselves in the free market of ideas, so long as the channels of communication are left open. The faith in the popular government r~sts on .the old dictum 'let the people have the truth and the freedom to discuss it and all will go well'. The liberty of the press remains an 'Ask ot the Covenant' in every democracy ....... The E newspapers give ideas. The .newspaper 1 give the people the freedom to find out what ideas are correct." In the very same case, Methew, J, observed at page 818 : • · "The constitutional guarantee of the ·freedom of speech is not so much for the benefit of the prejs as it is for the benefit of the public. The freedom or" speech includes within its compass the right of all citizens to read and be informed. In Time v. Hill (385 U.S. 374) the U.S. Supreme Court said:

G "The constitutional guarantee of freedom of speech and press are not for the benefit Of the press so much .as for the benefit of all the people." In Griswold v. Connecticut (381 U.S. 479, 482) the U.S. Supreme Court was of the opinion that the right of freedom of speech and press includes not only the right to B utter or to print, but the right to reacl."

INDIAN EXPRESS v. UNION (Venkataramiah, !.) 319 Justice Mathew proceeded to observe (at pp. 819·820) : "Under Art. 41. of the Constitution the State has a duty to take effective steps to educate the people within limits of its available economic resources. That includes political education also. Public discussion of public issues together with the • spreading of information and·any opinion. on these issues . ~;

is supposed to be the main function of newspaper. The highest and lowest in the scale of intelligence resort to its columns for information. Newspapers is the most potent means for educating the people as it is read by those who read nothing else and, in politics, the common ma.n gets c his education mostly from newspaper.

The affirmative obligation of the Government to ..,, - permit the import of newsprint by expandirtg foreign ex- change in that behalf is not only because press II.as a fundamental' right to express itself, but also because the D community has a right to be supplied with information and the Government a duty to educate the people within the limits of its resources. The Government may, under cl. 3 of the Imports (ControJ) Order, 1955 totally prohibit the import of newsprint and thus disable any person from carrying on a business in newsprint, if itis fn the general I interest of the public not to expend any foreign exchl\]lge • on .that score. If the affirmative obligation ·to expend foreign exchange and permit the import of newsprint stems from the need of the community for information and the fundamental duty of Government of educate the people f as also to satisfy the individual need for self exression, it is not for the proprietor of a. newspaper alone to say that he will reduce the circulation of the newspaper and increase ' its page level, as the community has an interest in main· taining or (ncreasing circulation of the newspapers. It is . said that a propnetor of a newspaper has the fre4)ifom to cator to the needs of intellectual highbrows who may ' choose to browse.in rich pastures and for that he.would require more pages for a newspaper and that it would be a denial of his fundamental right if he were told that he can- not curtail the circulation and increase the pages. A claim to enlarge the volume of speech by diminishing the circulation. II:,.

l ' sUPREME COURT llEFoRTS [1985] 2 s.c.11. ' Ji: ' ' -~ : ' ~ - ' - ' raises the pro6Ie\n of reconciling the citizens' right to un- ,,-,, ·, . feti~r~d' exercise of sp'eech in volume' with the community's ritht to undiminished circulation. Both rights fall within the ambit of the concept of freedom of speech 8,S explained .aboVe.''

. . ·The Second .Press Commission has exp!ained the concept j ' .of freedom ot press in its Report !Vol. I pp. 34-35) thus : . 't .. '--·:-

i"The expression 'freedom of the press' carries different meanings to different people. Individuals, whether profes- . sjo11al,J!Jurn~lists o~ not, ·assert their right to address the public through the medium of the press: Some people stress . the freedom of the editor to decide what shall be publis,hed iµ .his paper. Some ?thers emphasizethe riaht '- r -··-· o( t~J'. ,l>Wnqt'S. t() .marJi:et th~ir publjcation. To Justice ..* Hofmes, ,the l)lain purpose of the freedom was to proy1nt . all prjor - ' ' 'restraint on' publication. ' ' - ~ .. 16. The theory is that jn a democracy freedom of · expre~lon.. is indispensable as ,all men are entitled to partidi.pate' in the proceas of formulation of common i.' decision!!.· Indeed, freedom of expression is the first condi- ,, tion': of· liberty. It occupies a preferred position in the hierarchy of liberties gfviiig succour ~and protection to ofuer Iillerties. 'It has been: truly said that it is the mother of' all other liberties. The press as a medium of communi- _cafioil is a modern phenomenon. It has immense power to advance or thwart the progress of civilization. Its . freedom can be used to· creaie a brave new world or to J'. bring about universal catastrophe.

17. · Freedom of speech presupposes that right con" clusions are more likely to be pthered · out of a multitude ' .··of.tongues than through any kind authoritative. selection.of It rests on the assumption that the widest possible dissemi- . nation of information: from as many tliverse and antago· nistic sources as possible is essential to the welfare of the public. It is the function of the, Press to disseminate news from as many different sources and with as many . "·olft'erent facts and colours as possible. A citizen is entirely .,,_ , dependent on the Press for the quality, proportion and H '' ;~ - ' . ., ~-, ~ .f :': _~. < :~;;~~t1E:~:~

iNDiAN EXPRESS v. UNION (Venkataramiah, J.) 321 extent of his news supply. In such a situation, the exclu· A sive and continuous advocacy of one point of view through the medium of a newspaper which holds a monopolistic position is . not conducive to the formation of healthy . public opinion. If the newsp.aper ~i~dustry is co~c~ntrated ·in a few hands, the chance ,.of an idea antagomsttc to the idea of the ownersJ'getting)ccess to the market becomes B very remote. .But our constitutional law has been in· different to the reality and implication~of non-governmental restraint on· exercise of freedom of speech by citizens. The indifference becomes critical when comparatively a few persons are in a position to determine not only the content of information but also its very availability; The assump- c tion in a democratic set-up is that the freedom of the press will produce a sufficiently diverse Press not only to satisfy "- the public interest by throwing up a broad spectrum of views but also to fulfil the individual interest by enabling virtually everyone with a distinctive opinion to find some place to express it." D

The petitioners have heavily relied upon the decision of this Court.in Sakai's case (supra) in which the constitutionality of the --'>. Jilewspaper (Price and Page) Act, 1956 and the Daily Newspaper (Pdce and Page) Order, 1960 arose for· consideration. The peti· E tioner in that petition was a private limited company engaged in the business inter alia of publishing daily and weekly newspapers ·in Marathi named 'Sakal' from Poona. The nawspaper 'Sakal" had a net circulation of 52,000 copies on week days and 56,000 copies on Sundays. The daily edition contained six pages a day .., for five days in a week and four pages on one day. This edition was priced at 7 paise. The Sunday edition consisted of teq pages • and was priced at 12 paise. About 40% of the space in the news· ' paper was taken up by the advertisements and the rest by news, views and other usual features. The newspaper (price and page) Act, 1956 regulated the number of pages accordin,g to the price charged, prescribed the number of supplements to be published and prohibited the publication and sale of newspapers in contra- vention of the Act. It also provided for the regulation of the size -':-, and area of advertising maUer contained in a newspaper. Penal- ties were prescribed for contravention of that Act or the Order made thereunder. As a result of the enforcement of that Act in order to publish 34 pages on six' days in a week as it was doin~ H

322 SUPRllMB COURT Rl!l'Oll'fS [1985] 2 s.c.11. then; the petitioner had to raise the price from 7 paise • to · S paise~ •. per day and· if it did not wish to increase the price, it had to reduce the total number of pages to 24, The petitioner which could, publish any number of supplements as and when it desired to do so before the Order impugned in that case was passed could do so thereafter only with permission of the Government. The )j · B contention of the petitioner in that case was that the impugne<t' Act and the impugned Order were pieces of legislation designed to curtail the circulation of the newspaper as the increase in the " price of the paper would adversely affect its circulation . and they directly interfered with the freedom of the press. The validity- of these pieces of 1egislation was challenged on the ground that c they violated Article 19 (1) (a) of the Constitution. The Union · ,,. Government contested the petition. It pleaded that the impug- .. '!" ned Act 'and the Order had been passed with a view to preventing.,} ·I unfair competition among newspapers and also · with a view to" preventing 'the rise of monop'o!istic combines so that newspapers D might have fair opportunities of free'discussion. It was also con- tended that the illl,Pugned Act and the impugned Order had bceri passed in the public interest and the petitioner's business being a ·"· -~ trading activity falling under Article 19 (1) (g) of the Consti- tution ariy restri~tion imposed by the said :Ac~ and th~ Order "'a.f )- protected by Article 19 (6). of the Constitution. This Court ne- · . ~'< E gativing the contention of the Union Government ob$erved at \1 page 866 thus : . ••,. f "Its object thus is to regulate something which, as •. \)

already stated, is directly related to the circulation of a newspaper. Since circulation of a newspaper is :a part of F the right. of freedom 9f speech the Act must be regarded as one directed against the freedom of speech,: It has selected the fact or thing which is an essential and basic \.. ,' attribute of the conc~ption of the freedom of speech viz. the right to circulate one's views to all whom one can· G reach or ca_re to reach for the imposition of a restriction. It seeks to achieve its object of enabling what are termed ' ' '

the smaller newsP,apers to secure larger circulation by pro- visions which without disguise are aimed at restricting th~ circulation of what are termed the larger papers with- better financial strength. The impugrled. law for fro'm being one, Which merely interferes- with the riaht of fr~ dom of speech incid~ntally, does so directly ·though it /· "" .· ~~~··i~

INDIAN EXPRESS v. UNION (Venkataramiah,J.) 323 seeks to achieve the end by purporting to regulate the A business aspect of . a newspaper. Such a course is not permissible and the courts must be ever vigilant in guard- ing perhaps the most precious of all the freedoms guaranteed by our Constitution. The reason for this is obvious. The freedom of speech and expression of opinion is of paramount importance under· a democratic B Constitutio.n which .envisages changes in the composition of legislatures and governments and must be preserved. No doubt, the · law in question was made upon the ' . recommendation of the Press Commission but since its • object is to affect directly the right of circulation of news- papers which would necessarily undermine their power c to. influence public opinion ·it cannot stat be regarded as a dangerous weapon which is capable of being used against democracy itself." •

Continuing further the Court observed at pages 867 and D 868 thus:

"It was argued that the object of the Act was· to pre- vent monopolies and that monopolies are obnoxious. We will assume that monopolies are always against public interest and deserve to be suppressed. Even so, upon E the view we have taken that the intendment. of the Act '• , and the direct and immediate effect of the Act taken along with the impugned order was to interfere with the freedom of circulation of newspapers the circumstance that its object was to suppress monopolies. and prevent unfair practices is of no assistance. F

The legitimacy of the result intended to be achieved l .• does not necessarily imply that every means to achieve it • is permissible for even if the end is desirable and per- missible, the means employed must not transgres& the G limits laid down by the Constitution, if they directly i~pinge on any of the fundamental rights guaranteed ' by the Constitution it is no answer when the constitu- tionality of the measure is challenged that apart from the fundamental right infringdd the provision is otherwise legat.'' H

,., 324 sul'J.EMB COIJR'l' !UlPOllTS [198S] 2 S.C.ll. : ~,

We have so far seen the importance of the freedom of speech · ,' ' and expression which includes the freedom of press. We shaU..-k A· now proceed to consider whether it is open· to the Government to levy any tax on any of the aspects of the press industry.

IV Do newspapers have immunity from taxation ? " 'I' ' B Leaving aside small newspaper establishments whose circu· lation may .be less than about 10,000 copies a day, all other • .bigger. newspaper establishments have the characteristics of a· large industry. Such bigger newspaper concerns are mostly sitna· ted in urban areas occupying large buildings which · have to be c provided with all the services rendered by municipal authorities; • , !~ They employ hundreds of employe91. Capital investment in many of them is in the order of millions of rupees. Large· quan· :.,i. tities of printing machinery are utilised by them, a la~ge part of which is imported from abroad. They have to be provided .with telephones, ·teleprinters, postal and telegraphic se,rvices, wireless communication systems etc. Their newspapers have to, be trans·· ported,- by roads, railways and .. air "services. Arrangements for security of their property have to be made. The Government has to provide many other services to them. All these result 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 ·\·{I exchequer. They have to bear the common fiscal burden like • all others. '

While exammmg the constitutionality of a ·Jaw which is aileged to contravene Article 19 (I) (a) of the Constitution, we 4' · ~· cannot, no doubt, be solely guided· by the decision& of the Supreme ~ .! Court of the United States of, America. But iq order to understand the basic principles of freedom of speech and ex· pression and the need for that freedom in a democratic country, we may, take ·them into consideration. The pattern of Arti.cle 19 (I) (a) and of Article 19 {l}(g) of our constitution is different • from the pattern of the First Amendment to the American Consti· tution which is almost absolute in. its terms. The rights guaran· teed under Article 19 (1) (a) and Articie 19 {l) (g) of the Consti- ff tution are to be read along with clauses (2) and (6) of Article 19

INDIAN EXPRESS v. UNION (V~kataramiah, J.) 325 which carve out areas in respeci of which valid legislation can be made. It may be noticed that the newspaper industry iias not been A granted exemption from taxation in express terms. On the other band Entry 92 of List I of the Seventh Schedule to the Consti- tution empowers Parliament to make laws levying taxes on sale or purchase of newspapers , and on advertisements published therein. B It is relevant to refer here to a few extracts from the speech " of Sbri Desbbandbu Gupta on the floor of the ,Constituent Assembly opposing the provisions in the Draft Constitution which auth~rised the State Legislatures to levy sales, tax on sale of news- papers and tax on advertisements in newspapers. He uid : c " ............... No one would be happier than myself and my friends belonging to the press, if the House were, to decide today that newspapers will be free from all such taxes. Of course that is what it should be because in no free country with a democratic Government ,we have any such taxes as the sales tax or the advertisement tax ......... ... ........ , ................. ,1 claim that newspapers do deserve a distinctive treatment. They are not an industry in the sense that other industries are. This has been recogni- sed all over the world. They have a mission to perform. And I am glad to say that the newspapers in India have performed that mission of public service very 'Creditably and we have reason to feel proud of it. I would1 there· , I fore, expect this House and my friend Mr. Sidhva to bear it in mind at the time when God forbid any proposal comes before the Parliament for taxation. That would be the time for them to oppose it.

Sit, after, all, this is an enabling clause. It does not say that there shall be sales and advert!sement tax imposed on newspapers. It does not commit the House tpday to the impositon of a tax on the sales of or a, tax 011 adver- G tisements published in newspapers, All that we have emphasised is that newspapers as such should be taken away from the purview of the,, provincial Governments and brought to the Central List so that if at all ,at, any time a tax is to be imposed on newspapers it shquld be done by the representatives of whole country realising the full ,,,