Indian Express Newspapers (Bombay) Private Ltd. and Others v. Union of India and Others (1984, 1986 ITR SC 159 856)

1986 ITR SC 159 856 . 1985 SCC 1 641 . 1999 ELT 110 3 . 1985 COMPLJ 3 115 .
1985 CRLR
SC 79 . 1984 SCALE 2 853 . 1985 SCC 3 641 . 1985 SCR 2 287 . 1985 TAX LR 2451 . 1986
ITR 159 556 . 1986 AIR SC 0 515 . 1984 STC 56 193 . 1986 ITR SC 156 856 . 1985 SCC TAX
121 . 1986 ITR 159 856 . 1986 AIR 515 . 1999 ELT SC 110 3 . 1986 AIR SC 515 . 1985
TAXLR 2451 .
Indian Express Newspapers (Bombay) Private Ltd. And Others v. Union

Of India And Others
Supreme Court Of India (Dec 6, 1984)
CASE NO.
Writ Petitions Nos. 2656-60, 2935-40, 2941-46, etc. of 1981, 1325 of 1982, 470-72 and
1114-15 of 1984, Transferred Cases Nos. 23 of 1983 and 23 of 1984, Writ Petitions Nos.
3114-17 of 1981., Writ Petitions Nos. 3392-93 of 1981., Writ Petition No. 3853 of 1981.,
And., Writ Petitions Nos. 6446-47 of 1982., I. FREEDOM OF THE PRESS., II.
CLASSIFICATION OF NEWSPAPERS., BY SIZE CONSTITUTIONALITY., III.
OBJECT OF FREEDOM OF SPEECH AND EXPRESSION., IV. TAX ON NEWSPAPER
INDUSTRY LEVY ON NEWSPRINT CONSTITUTIONALITY, V. JUDICIAL
REVIEW OF EXERCISE OF POWER., UNDER SECTION 25(1) OF CUSTOMS ACT.,
VI. VALIDITY OF LEVIES IMPOSED ON NEWSPRINT., VII. RELIEF., VII.
MISCELLANEOUS., NOTIFICATION., CUSTOMS., * * *, IV. Democratisation of
Communication., Human Rights.
ADVOCATES
A.K Sen, A.B Divan, F.S Nariman and K-K. Venugopal, Senior Advocates (B.R Agarwala,
Ms Vijay Lakshmi Menon, A.K Ganguli, P.H Parekh, C.S Vaidyanathan, D.N Mishra,
Pravin Kumar, K.R Nambiar, M.C Dhingra, M|s Sieta Vaidyalingam, P.C Kapur, Pramod
Dayal, C.M Nayar, S.S Munjral, K.K Jain, S.K Gupta, A.D Sangar, Ranjan Mukherjee,
Sudip Sarkar, P.K Ganguli, Ms Indu Malhotra, P.R Seetharaman and V. Shekhar,
Advocates, with them), for the Petitioners;
K. Parasaran, Attorney-General of India; Krishna Iyer and P.A Francis, Senior Advocates.
(A. Subbarao, Dalveer Bhandari and R.N Poddar, Advocates, with them), for the
Respondents;
F.S Nariman, S.K Dholakia, Soli J. Sorabjee and Anil B. Divan, Senior Advocates (J.B
Dadachanji, S. Sukumaran, D.N Mishra, K.P Dhandapani, R.C Bhatia, P.C Kapur, A.N
Haksar, O.C Mathur, Ms Meera Mathur, Dr Roxna Swamy, Arun Jetley, P.H Parekh, Ms
Divya Bhalia and Pinaki Misra, Advocates, with them), for the Intervener.
JUDGES
O. Chinnappa Reddy
Printed by licensee : NALSAR University of Law Page 1 of 67

A.P Sen
E.S Venkataramiah, JJ.
IMPORTANT PARAS
1. 94. It was next urged on behalf of the Government that the levy of customs duty on
newsprint was not strictly a levy on newsprint as such since though customs duties
were levied with reference to goods, the taxable event was the import of goods within
the customs barrier and hence there could be no direct effect on the freedom of speech
and expression by virtue of the levy of customs duty on newsprint. Reliance was placed
in support of the above contention on the decision in In re Sea Customs Act33. That
decision was rendered on a reference made by the President under Article 143 of the
Constitution requesting this Court to record its opinion on the question whether the
Central Government could levy customs duty on goods imported by a State. The
contention of the majority of the States in that case was that the goods imported by
them being their property no tax by way of customs could be levied by reason of
Article 289(1) of the Constitution which exempted the property of a State from taxation
by the Union. This Court (majority 5, minority 4) held that in view of clause (1) of
Article 289 which was distinct from clause (2) thereof which provided that nothing in
clause (1) of Article 289 would prevent Union from imposing or authorising the
imposition of any tax to such extent, if any, as Parliament might by law provide in
respect of a trade or business of any kind carried on by or on behalf of a State or any
operations connected therewith or any property used or occupied for the purposes of
such trade or business or any income accruing or arising in connection therewith and
the other provisions of the Constitution which enabled the Union to levy different kinds
of taxes, customs duty levied on the importation of goods was only a tax levied on
international trade and property. The Court further held that the immunity granted
under Article 289(1) in favour of States had to be restricted to taxes levied directly on
property and even though customs duties had reference to goods and commodities they
were not taxes on property and hence not within the exemption in Article 289(1). The
above decision is again of very little assistance to the Government since it cannot be
denied that the levy of customs duty on newsprint used in the production of newspapers
is a restriction on the activity of publishing a news paper and the levy of customs duties
had a direct effect on that activity. There exists no analogy between Article 289(1) and
Article 19(1)(a) and (2) of the Constitution. Hence the levy cannot be justified merely
on the ground that it was not on any property of the publishers of newspapers.

2. 61. At this stage we find it useful to refer to a decision of the Privy Council in
Attorney- General v. Antigua Times Ltd 1975 3 All ER 81 PC where the Judicial
Committee of the Privy Council was called upon to decide about the validity of the
imposition of a licence fee of $ 600 annually on the publisher of a newspaper under the
Newspapers Registration (Amendment) Act, 1971. Section 10 of the Constitution of
Antigua read as follows:
3. 80. The power to grant exemption should, however, be exercised in a reasonable way.
Lord Greene, M.R has explained in Associated Provincial Picture Houses Ltd. v.
Wednesbury Corporation 1948 1 KB 223 what a “reasonable way” means as follows:
4. 58. Justice Frankfurter who also dissented from the majority observed at pp. 1310 and
1311 thus:
5. (emphasis supplied)
6. 62. Lord Fraser who delivered the judgment of the Privy Council upheld the levy of the
licence fee as being reasonably required in the interests of defence and for securing
public safety etc. referred to in Section 10(2)(a)(i) of the Constitution of Antigua. The
learned Lord observed in that connection thus:
7. 73. We shall assume for purposes of these cases 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 thereunder amounts to a piece of subordinate legislation.
Even then the notification is liable to be questioned on the ground that it is an
unreasonable one. The decision of this Court in Municipal Corporation of Delhi v. Birla
Cotton, Spinning and Weaving Mills, Delhi AIR 1968 SC 1232 has laid down the
above principle. In that case Wanchoo, C.J while upholding certain taxes levied by the
Corporation of Delhi under Section 150 of the Delhi Municipal Corporation Act, 1957
observed thus:
8. 74. But it appears that the principle enunciated in Kruse v. Johnson is not being applied
so stringently in England now
10. 72. The above decision does not in fact support the contention of the Government in the
cases before us. It is noteworthy that the Court in the passage extracted above has made
a distinction between the amendment of the Schedule to the Punjab General Sales Tax
Act by the issue of a notification by the Government of Himachal Pradesh in exercise
of its power delegated by the Legislature and the power of that Government to rant

exemption under a power to grant exemption. In the present cases we are concerned
with a power to grant exemption conferred on Government by Section 25 of the
Customs Act, 1962 and not with a power to amend the Act by means of a notification.
Moreover this was just a case relating to business in liquor.
11. 77. In India arbitrariness is not a separate ground since it will come within the embargo
of Article 14 of the Constitution. In India any enquiry into the vires of delegated
legislation must be confined to the grounds on which plenary legislation may be
questioned, to the ground that it is contrary to the statute under which it is made, to the
ground that it is contrary to other statutory provisions or that it is so arbitrary that it
could not be said to be in conformity with the statute or that it offends Article 14 of the
Constitution.
12. 93. In the above said case the Court was principally dealing with the right to advertise
prohibited drugs, to prevent self- medication and self- treatment. That was the main
issue in the case. It is no doubt true that some of the observations referred to above go
beyond the needs of the case and tend to affect the right to publish all commercial
advertisements. Such broad observations appear to have been made in the light of the
decision of the American Court in Lewis J. Valentine v. F.J Chrestensen. But it is
worthy of notice that the view expressed in this American case has not been fully
approved by the American Supreme Court itself in its subsequent decisions. We shall
refer only to two of them. In his concurring judgment in William B Cammarane v.
United States of America 358 US 498 Justice Douglas said:
13. 75. 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 the 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. In England, the Judges would say “Parliament never
intended authority to make such rules. They are unreasonable and ultra vires”. The
present position of law bearing on the above point is stated by Diplock, L.J in
Mixnam's Properties Ltd. v. Chertsey Urban District Council 1964 1 QB 214 thus:
14. 92. In meeting the above contention the Government relying on the decision in
Hamdard Dawakhana (Wakf), Lal Kuan, Delhi v. Union of India AIR 1960 SC 554 has

pleaded in defence of its action that the right to publish commercial advertisement is
not part of freedom of speech and expression. We have carefully considered the
decision in Hamdard Dawakhana case. The main plank of that decision was that the
type of advertisement dealt with there did not carry with it the protection of Article
19(1) (a). On examining the history of the legislation, the surrounding circumstances
and the scheme of the Act which had been challenged there, namely the Drugs and
Magic Remedies (Objectionable Advertisements) Act, 1954 (21 of 1954) the Court
held that the object of that Act was the prevention of self-medication and self-treatment
by prohibiting instruments which may be used to advocate the same or which tended to
spread the evil. The Court relying on the decision of the American Supreme Court in
Lewis J. Valentine v, F.J Chrestensen 86 L Ed 1262 observed at pp. 687-89 thus:
15. 47. On the power of the Government in the United States of America to levy taxes on
and to provide for the licensing of newspapers, Corpus Juris Secundum (Vol. 16) says
at p. 1132 as follows:
16. 44. While examining the constitutionality of a law which is alleged to contravene
Article 19(1) (a) of the Constitution, we cannot, no doubt, be solely guided by the
decisions of the Supreme Court of the United States of America. But in order to
understand the basic principles of freedom of speech and expression and the need for
that freedom in a democratic country, we may take them into consideration. The pattern
of Article 19(1) (a) and of Article 19(1) (g) of our 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 are to be read along with clauses (2) and (6) of Article 19 which carve out
areas in respect of which valid legislation can be made. It may be noticed that the
newspaper industry has not been “granted exemption from taxation in express terms.
On the other hand Entry 92 of List I of the Seventh Schedule to the Constitution
empowers Parliament to make laws levying taxes on sale or purchase of newspapers
and on advertisements published therein.
17. 42. We have so far seen the importance of the freedom of speech and expression which
includes the freedom of press. We shall now proceed to consider whether it is open to
the Government to levy any tax on any of the aspects of the press industry.
18. 41. Continuing further the Court observed at pages 867 and 868 thus:
19. 97. It is one thing to say that in view of considerations relevant to public finance which
require every citizen to contribute a reasonable amount to public exchequer customs

duty is 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.
20. 88. This is not a novel phenomenon. A stamp tax on newspapers came to be levied in
England in 1712. It virtually crippled the growth of the English press and thus became
unpopular. There was a lot of agitation against the said tax. But on its abolition in 1861,
the circulation of newspapers increased enormously. The following account found in
the Encyclopaedia Britannica (1962) Vol. 16 at p. 339 is quite instructive:
21. 69. 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.
22. 68. We have carefully considered the above two decisions. In the first case the Court
was concerned with the newspaper price-page policy and in the second the newsprint
policy imposed by the Government had been challenged. Neither of them was
concerned with the power of Parliament to levy tax on any goods used by the
newspaper industry. As we have observed earlier taxes have to be levied for the support
of the Government and newspapers which derive benefit from the public expenditure
cannot disclaim their liability to contribute a fair and reasonable amount to the public
exchequer. What may, however, have to be observed in levying a tax on newspaper
industry is that it should not be an over- burden on newspapers which constitute the
Fourth Estate of the country. Nor should it single out newspaper industry for harsh
treatment. A wise administrator should realise that the imposition of a tax like the
customs duty on newsprint is an imposition of knowledge and would virtually amount
to a burden imposed on a man for being literate and for being conscious of his duty as a

citizen to inform himself about the world around him. “The public interest in freedom
of discussion (of which the freedom of the press is one aspect) stems from the
requirement that members of a democratic society should be sufficiently informed that
they may influence intelligently the decisions which may affect themselves.” (Per Lord
Simon of Glaisdale in Attorney-General v. Times Newspapers Ltd. 1973 3 All ER 54).
Freedom of expression, as learned writers have observed, has four broad social
purposes to serve: (i) it helps an individual to attain self fulfilment, (ii) it assists in the
discovery of truth, (iii) it strengthens the capacity of an 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 involved here is the people's right to know.
Freedom of speech and expression should, therefore, receive a generous support from
all those who believe in the participation of people in the administration. It is on
account of this special interest which society has in the freedom of speech and
expression that the approach of the Government should be more cautious while levying
taxes on matters concerning newspaper industry than while levying taxes on other
matters. It is true that this Court has adopted a liberal approach while dealing with
fiscal measures and has upheld different kinds of taxes levied on property, business,
trade and industry as they were found to be in the public interest. But in the cases
before us the Court is called upon to reconcile the social interest involved in the
freedom of speech and expression with the public interest involved in the fiscal levies
imposed by the Government specially because newsprint constitutes the body, if
expression happens to be the soul.
23. 67. In Bennett Coleman case the question which arise for consideration related to the
validity of a restriction imposed under the newsprint policy which had certain
objectionable features such as (i) that no newspaper or new edition could be started by
a common ownership unit even within the authorised quota of newsprint, (ii) that there
was a limitation on the maximum number of pages, no adjustment being permitted
between circulation and pages so as to increase pages, (iii) that a big newspaper was
prohibited and prevented from increasing the number of pages, page area, and
periodicity by reducing circulation to meet the requirement even within its admissible
quota etc. The majority held that the fixation of page limit had not only deprived the
petitioners of their economic vitality but also restricted their freedom of expression. It
also held that such restriction of pages resulted in reduction of advertisement revenue
and thus adversely affected the capacity of a newspaper to carry on its activity which is

protected by Article 19(1)(a) of the Constitution.
24. 99. It is argued on behalf of the Government that the effect of the impugned levy being
minimal, there is no need to consider the contentions urged by the petitioners. As
observed by Lord Morris of Borth-Y-Gest in Olivier v. Buttigieg 1967 1 AC 115 a case
from Malta, that where fundamental rights and freedom of the individual are being
considered, a court should be cautious before accepting the view that some particular
disregard of them is of minimal account. The learned Lord observed in the above case
that there was always the likelihood of the violation being vastly widened and extended
with impunity. He also referred to the words of Portia — ‘Twill be recorded for a
precedent, and many an error by the same example will rush into the state”, and the
following passage from the American case i.e Thomas v. Coilings 323 US 516.
25. 64. At this stage it is necessary to refer to a forceful argument addressed before us. It
was urged on behalf of the petitioners that the recognition of the power of the
Government to levy taxes of any kind on the newspaper establishments would ring in
the death- knell of the freedom of press and would be totally against the spirit of the
Constitution. It is contended that the Government is likely to use it to make the press
subservient to the Government. It is argued that when once this power is conceded,
newspapermen will have to run after the Government and hence it ought not to be done.
This raises a philosophical question — Press versus Government. We do not think it is
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, however, good to remember some statements made in the
past by some wise men connected with newspapers in order to develop the culture of an
independent press. Hazlitt advised editors to stay in their garrets and avoid exposing
themselves to the subtleties of power. Walter Lippman in his address to the
International Press Institute some years ago said that the danger to the independence
and integrity of journalists did not come from the pressures that might be put on them;
it was that they might be captured and captivated by the company they keep. Arthus
Krock after 60 years of experience said that it “is true that in most cases, the price of
friendship with a politician is so great for any newspaperman to pay”. A.P Wadsworth
of the Manchester Guardian said “that no editor should ever be on personal terms with
our leaders for fear of creating a false sense of relation of confidence”. James Margach
says that “when leading media figures see too much rather than too little of Prime
Ministers that the freedom of press is endangered”. Lord Salisbury told Buckle a
famous editor in England “You are the first person who has not come to see me in the
last few days who is not wanting something at my hands — place or decoration or

peerage. You only want information”. Charles Mitchell wrote in ‘Newspaper
Directory’: “The Press has now so great and so extensive an influence on public
opinion ... that ... its conductors should be gentlemen in the true sense of the word.
They should be equally above corruption and intimidation incapable of being warped
by personal considerations from the broad path of truth and honour; superior to all
attempts at misrepresenting or mystifying public events”. If the press ceases to be
independent the healthy influence of the press and public opinion will soon be
substituted by the traditional influences of landlordism and feudalism. The press lords
should endeavour to see that their interests do not come into conflict with their duties.
All this is said only to show that Government alone may not always be the culprit in
destroying the independence of the press. Be that as it may, it is difficult to grant that
merely because the Government has the power to levy taxes, the freedom of press
would be totally lost. As stated earlier, the court is always there to hold the balance
even and to strike down any unconstitutional invasion of that freedom.
27. 82. Now the notifications issued on March 1, 1981 and February 28, 1982 under
Section 25 of the Customs Act, 1962 which grant exemptions from payment of certain
duty beyond what is mentioned in them are issued by the executive Government. They
were issued in substitution of earlier notifications which had granted total exemption.
Such notifications have to be issued by the Government after taking into consideration
all relevant factors which bear on the reasonableness of the levy on the newsprint. The
Government should strike a just and reasonable balance between the need for ensuring
the right of people to freedom of speech and expression on the one hand and the need
to impose social control on the business of publication of a newspaper on the other. In
other words, the Government must at all material times be conscious of the fact that it
is dealing with an activity protected by Article 19(1) (a) of the Constitution which is
vital to our democratic existence. In deciding the reasonableness of restrictions
imposed on any fundamental right the Court should take into consideration the nature
of the right alleged to have been infringed, the underlying purpose of the restrictions
imposed, the disproportion of the imposition and the prevailing conditions at the
relevant time including the social values whose needs are sought to be satisfied by
means of the restrictions. (See State of Madras v.V.G Row 1952 SCR 597.) The
restriction in question is the burden of import duty imposed on newsprint. Section 25 of
the Customs Act, 1962 under which the notifications are issued confers a power on the
Central Government coupled with a duty to examine the whole issue in the light of the
public interest. It provides that if the Central Government is satisfied that it is necessary

in the public interest so to do it may exempt generally either absolutely or subject to
such conditions goods of any description from the whole or any part of the customs
duty leviable thereon. The Central Government may if it is satisfied that in the public
interest so to do exempt from the payment of 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. It is useful to refer here to the
observations of Lord Denning, M.R in Breen v. Amalgamated Engineering Union 1971
2 QB 175 at p. 190 read thus:
28. 81. Hence the claim made on behalf of the Government that the impugned notifications
are beyond the reach of the administrative law cannot be accepted without qualification
even though all the grounds that may be urged against an administrative order may not
be available against them.
29. 84. Freedom of press as the petitioners rightly assert means freedom from interference
from authority which would have the effect of interference with the content and
circulation of newspapers. The most important raw material in the production of a
newspaper is the newsprint. The cost and availability of newsprint determine the price,
size and volume of the publication and also the quantum of news, views and
advertisements appearing therein. It is not disputed that the cost of newsprint works out
to nearly 60% of the cost of production of newspaper. In the case of a big newspaper
the realisation by the sale of newspaper is just about 40% of its total cost of production.
The remaining cost is met by advertisements revenue which is about 40%, by revenue
from waste sales and job work which comes to about 5% and revenue from other
sources such as the income from properties and other investments of the newspaper
establishment. These figures have been derived from the statement furnished by one of
the big newspapers. The case of all other big newspapers may be more or less the same.
The financial and other difficulties felt by the newspaper presses in securing newsprint
in recent years which have become an international phenomenon are set out in the Final
Report of the International Commission for the Study of Communication Problems
referred to above at p. 141 thus:
30. 83. In any event 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 to
any of the fundamental rights guaranteed under Part III of the Constitution.
31. 86. 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.
32. 85. In Chapter 4 of the same Report at p. 100 the International Commission has
observed thus:
33. 71. It is argued on behalf of the Government that a notification issued under Section
25(1) of the Customs Act granting, modifying or withdrawing an exemption from duty
being in the nature of a piece of subordinate legislation, its validity cannot be tested by
the Court by applying the standards applicable to an administrative action. Reliance is
placed on the decision of this Court in Narinder Chand Hem Raj v. Lt. Governor,
Administrator, Union Territory, Himachal Pradesh 1972 1 SCR 940 in support of the
above contention. In that case the appellants were wine merchants carrying on business
in Simla. At the auction held for the purpose of granting the privilege to sell the Indian-
made foreign liquor the appellants were the highest bidders. It appears that before the
auction was held the Collector of Excise and Taxation had announced that no sales tax
would be liable to be paid on the sale of liquor and despite this assurance the
Government had levied and collected from the appellants a certain amount by way of
sales tax. The appellants prayed for the issue of a writ to the Government restraining
them from levying any sales tax and to refund what had been recovered from them by
way of sales tax already. It was contended on behalf of the Government of Himachal
Pradesh that non-collection of sales tax was possible only on the issue of a notification
by the Government pursuant to its statutory power under the Punjab General Sales Tax
Act which was in force in the area in question shifting “liquor” which was in Schedule
‘A’ to Schedule ‘B’ to the Punjab General Sales Tax Act and that such a notification
could not be issued because the Central Government had not given its requisite
approval. Hence it was urged by the Government that since sales tax had been imposed
by law on all items in Schedule ‘A’ it could not disobey the mandate of law. It further
contended that the Court could not issue a mandamus to the Government to issue a
notification to amend the Schedules to the statute as the act of issuing such a
notification was a legislative act and no writ could be issued to a legislative body or a
subordinate legislative body to make a law or to issue a notification, as the case may
be, which would have the effect of amending a law in force. This Court upheld the
contention of the Government. The Court said: (SCC p. 751, para 7)
34. 70. While we, therefore, cannot agree with the contention that no tax can be levied on
newspaper industry, we hold that any such levy is subject to review by courts in the
light of the provisions of the Constitution.

35. 10. The price of imported newsprint in March 1, 1981 was Rs 4560 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:
36. 90. The pattern of the law imposing customs duties and the manner in which it is
operated, to a certain extent exposes the citizens who are liable to pay customs duties to
the vagaries of executive discretion. While Parliament has imposed duties by enacting
the Customs Act, 1962 and the Customs Tariff Act, 1975, the Executive Government is
given wide power by Section 25 of the Customs Act, 1962 to grant exemptions 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, 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. No information is forthcoming from the Government as to whether there
was any material which justified the said additional levy. It is also not clear why this
futile exercise of levying an additional duty of 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. As mentioned elsewhere in the course of this judgment while levying tax on
an activity which is protected also by Article 19(1)(a) a greater degree of care should
be exhibited. While it is indisputable that the newspaper industry should also bear its
due share of the total burden of taxation along with the rest of the community when any
tax is specially imposed on newspaper industry, it should be capable of being justified
as a reasonable levy 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. If
the levy imposed by the statute itself fails, there would be no need to question the
notifications issued under Section 25 of the Customs Act, 1962. But having regard to
the prevailing legislative practice let us assume that in order to determine the actual
levy we should take into consideration not merely the rate of duty mentioned in the
Customs Tariff Act, 1975 but also any notification issued under Section 25 of the
Customs Act, 1962 which is in force. Even then the reasons given by the Government

to justify the total customs duty of 15% levied from March 1, 1981 or 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. In the counter-affidavit filed on
behalf of the Government, it is stated that the allegation that the position of foreign
exchange reserve is comfortable is irrelevant. This shows that nobody in Government
had ever taken into consideration the effect of the import of newsprint on the foreign
exchange reserve before issuing the notifications levying 15% duty. Secondly no
newspaper owner can import newsprint directly. Newsprint 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 newsprint. In the Finance Minister's speech there is “no
reference to the capacity of the newspaper industry to bear the levy of 15% duty. In the
counter-affidavit it is asserted that the extent of burden faced by the newspaper industry
in India is irrelevant to the levy of import duty on newsprint. This clearly shows again
that the Government had not also considered a vital aspect of the questions before
withdrawing the total exemption which was being enjoyed by newspaper industry till
March 1, 1981 and imposing 15% duty on newsprint.
37. 89. The Second Press Commission in its Report (Vol. II) at p. 182-83 has stated that the
figures of circulation of newspapers complied by the Audit Bureau of Circulation
(ABC) for the period January to June 1981 indicated that the circulation of newspapers
in the period January to June 1981 was 1.9% lower than in the previous six months’
period. The decline in the circulation of dailies was more in the case of every big
newspapers with circulation of one lakh and above than in the case of smaller papers.
The Commission said that the decline in circulation would appear to be attributable
mainly to two factors — increase in the retail price of newspapers in September-
October 1980 and again in April- May 1981 and that the increase in retail prices
appeared to have become necessary following continuing increase in newsprint prices
in the last few years including levy of import duty in 1981 and increase in wages and
salaries cost on account of Palekar Award. Of these factors which were responsible for
increase in prices, the imposition of import duty on newsprint was on account of State
action. This aspect of the matter is not seriously disputed by the Government.

38. 31. “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 MacBride, in Part V thereof dealing with “Communication
Tomorrow” at p. 265 emphasizes the importance of freedom of speech and press in the
preservation of human rights in the following terms:
40. In Jeffrey Cole Bigelow v. Commonwealth of Virginia 421 US 809 the American
Supreme Court held that the holding in Lewis J. Valentine v. F.J. Chrestensen was
distinctly a limited one. In view of the foregoing, we feel that the observations made in
the Hamdard Dawakhana case are too broadly stated and the Government cannot draw
much support from it. We are of the view that all commercial advertisements cannot be
denied the protection of Article 19(1) (a) of the Constitution merely because they are
issued by businessmen. In any event the Government cannot derive any assistance from
this case to sustain the impugned notifications.
41. 100. In the above decision the Privy Council cited with approval the view expressed by
this Court in Romesh Thappar case and the US Court in Martin v. City of Struthers 319
US 141. The Privy Council observed thus:
SUMMARY
Facts
The petitioners, who are companies, their shareholders and employees engaged in the
business of editing, printing and publishing newspapers, magazines, etc., consume large
quantities of newsprint in their activity. They challenged the validity of the imposition of
import duty on newsprint imported from abroad under Section 12 of the Customs Act,
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 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.
The Union Government filed a counter- affidavit in response to the allegations of the
petitioners.
Issues
Whether the imposition of import duty on newsprint and the levy of auxiliary duty on
newsprint are valid?
Whether any tax on newsprint is unconstitutional?

Whether the classification of newspapers into small, medium and big newspapers for
purposes of levying customs duty is violative of Article 14 of the Constitution ?
Arguments
The petitioners argued that any tax on newsprint, which is the most important component
of a newspaper, is unconstitutional. They heavily relied upon the decision of the Supreme
Court in Sakal case and the Bennett Coleman case in support of their case . They also
argued that the classification of newspapers into small, medium and big newspapers for
purposes of levying customs duty is violative of Article 14 of the Constitution .
The Union Government argued that the fact that the foreign exchange position was
comfortable was no bar to the imposition of import duty. The Government also asserted
that the extent of burden faced by the newspaper industry in India is irrelevant to the levy
of import duty on newsprint.
Decision
The Supreme Court held that any tax on newsprint is subject to review by courts in the
light of the provisions of the Constitution . The Court also held that the classification of
newspapers into small, medium and big newspapers for purposes of levying customs duty
is not violative of Article 14 of the Constitution . The Court allowed the petitions and
ordered the Government to recover only Rs 550 per MT on imported newsprint towards
customs duty and auxiliary duty and not insist upon payment of duty in accordance with
the impugned notifications until the redetermination of the liability of the petitioners and
others is made . Parties were ordered to bear their own costs.
JUDGMENT
E.S Venkataramiah, J .— I. Pleadings

The majority of petitioners in these petitions filed under Article 32 of the Constitution
are certain companies, their shareholders 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 activity large quantities of newsprint and it is stated that
60% of the expenditure involved in the production of 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.
2. 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 custom duty had been
reduced to 10% ad valorem and auxiliary duty had been reduced to 5% ad valorem in the
case of newsprint used for printing newspaper, books and periodicals.
3. During the pendency of these petitions while the Customs Tariff Act, 1975 was amended
levying 40% ad valorem plus Rs 1000 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.
4. 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 Executive interference. The petitioners contend 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 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
subs equent 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 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 newspapers 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.
5. 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 para 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 no 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 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(1)(a) of the Constitution . But regarding the plea
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 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
the foreign exchange position was 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
6. In order to appreciate the various contentions of the parties it is necessary to set out
briefly the history of the levy of customs duty on newsprint in India.
7. 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
90% 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 2½%
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 21% ad
valorem regulatory duty was abolished by the Finance Act of 1973 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 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 2½% but it was totally abolished by a notification issued under Section 25 of the
Customs Act on July 15, 1977. The notification dated July 15, 1977 read as follows:
“NOTIFICATION.
CUSTOMS.
GSR No. 485-E.— 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 India in the Department of Revenue and Banking No. 72 — Customs
dated June 18, 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.”
8. 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
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 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 15 per cent ad
valorem came to be imposed on newsprint for the year 1981-82.
9. 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 90% (sic) 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, a 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 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 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 72.F.No. Bud.
(2) Cus/77 dated June 18, 1977 had reduced the auxiliary duty to 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 24.F.No. Bud(Cus)/81 dated March 1, 1981.
This 15% customs duty constitutes 10% basic duty and 5% auxiliary duty.”
10. The price of imported newsprint in March 1, 1981 was Rs 4560 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 5 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 those 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 terms of
circulation is already well understood in the 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.
11. The relevant provisions of the laws imposing customs duty and auxiliary duty on
newsprint which arise for consideration are these:
12. Section 12 of the Customs Act, 1962 reads:
“12. Dutiable goods.—(1) Except as otherwise provided 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.

(2) * * *”
13. Section 2 of the Customs Tariff Act, 1975 reads:

“2. Duties specified in the Schedules to be levied.—The rates at which duties of customs
shall be levied under the Customs Act, 1962, are specified in the First and Second
Schedules.”
14. 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 No. Sub-heading No. and description of article Rate of duty Duration when rates
of duty are protective Standard Preferential Areas (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 (excluding chrome, marble, flint, poster, stereo and art paper) 40% . . . . * * *
15. Newsprint used by the petitioners falls under Sub- Heading No. (2) of Heading No.
48.01/21 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. 48.01/21, for the entry in column (3), the
entry “40% plus Rs 1000 per tonne” was substituted.
16. 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).”
17. 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.
18. 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.
19. But by notifications issued on February 28, 1982 under Section 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
seas sale price of newsprint had by that time gone up above Rs 5600 per tonne.
20. 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 this

Court , Parliament was moved by the Government specifically to increase the basic
customs duty on newsprint by Rs 1000 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 damped on
imported newsprint.
21. 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 p. 18):
“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.”
22. 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 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.
III. The Importance of Freedom of Press in a Democratic Society and the Role of Courts
23. 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 v . State of Delhi AIR 1950 SC 129 and Bennett
Coleman & Co. v . Union of India1972 2 SCC 788.)
24. 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:
***
(b ) 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 operation of any existing law, or

prevent the State from making any law, insofar as such law 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 relations with
foreign States , public order, decency or morality, or in relation to contempt of court ,
defamation or incitement to an offence.
***
(6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing
law insofar as it imposes, or prevents the State from making any law imposing, in the
interests of the general public, reasonable restrictions on the exercise of the right
conferred by the said sub-clause....”
25. The freedom of press, as one of the members of the Constituent 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 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
pronouncements securing the said freedom for the people. The basic documents of the
United Nations and of some other international bodies to which reference will be made
hereafter give prominence to the said right . The leaders of the Indian independence
movement attached special significance to the freedom of speech and expression 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 of the United States of America which guaranteed the freedom of the press
Pandit Jawaharlal Nehru in his historic resolution containing the aims and objects of the
Constitution to be enacted by the Constituent Assembly said that the Constitution 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
regulated press” [See D.R Mankekar: The Press under Pressure (1973) p. 25]. The
Constituent Assembly and its various committees and sub-committees considered freedom
of speech and expression which included freedom of press. also as a precious right . The
Preamble to the Constitution says that it is intended to secure to all 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
imposeable in the public interest is not one enumerated in clause (2) of Article 19. In
Romesh Thappar v . State Of MadrasAIR 1950 SC 124 and Brij Bhushan case this Court
firmly expressed its view that there could not be any kind of restrictions 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 (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 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.
26. Article 19 of the Universal Declaration of Human Rights, 1948 declares: “Everyone
has 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.”
27. Article 19 of the International Covenant on Civil and Political Rights, 1966 reads:
“19. (1) Everyone shall have the right to hold opinions without interference.
(2) Everyone shall have the right to 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, or through any other media
of his choice.
(3) The exercise of the rights provided for in para 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 provided by law and are necessary:
(a) For respect of the rights or reputations of others;
(b ) For the protection of national security or of public order (ordre public), or of public
health or morals.”
28. Article 10 of the European Convention on Human Rights reads:

“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
interference by public authority and regardless of frontiers. This Article shall not prevent
States from requiring the licensing of broadcasting, television or cinema enterprises.
(2) The exercise of these freedoms, since it carries with it duties and responsibilities, may
be subject to such formalities, conditions, restrictions or penalties 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.”
29. The First Amendment to the Constitution of the United States of America declares:
“1. Congress shall make no law respecting an establishment of religion, or prohibiting the
free exercise thereof; or abridging 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.”
30. Frank C. Newman and Karel Vasak in their article on ‘Civil and Political Rights’ in
the International Dimensions of Human Rights (edited by Karel Vasak) Vol. I state at p.
155-56 thus:
“(ii) Freedom of opinion, expression, information and communication. — 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’ made increasingly perceptible by modem
technological advance. What is primarily involved is the classic notion of freedom of
opinion, that is to say, the right to say what one thinks and not to be harassed for one's
opinions. This is followed 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 put to 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 considerable
work with a view to its further elaboration and implementation.”
31. “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 MacBride, in Part V thereof dealing with “Communication
Tomorrow” at p. 265 emphasizes the importance of freedom of speech and press in the
preservation of human rights in the following terms:
“IV. Democratisation of Communication.
Human Rights.

Freedom of speech, of the press, of information and of assembly are vital for the
realization of human rights. Extension of these communication freedoms to a broader
individual and collective right to communicate is an evolving 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 to the fulfilment of human
rights, both individual and collective, in the spirit of the UNESCO Declaration on the mass
media and the Helsinki Final Act, and the International Bill of Human Rights. The
contribution of the media in this regard is not only to foster these principles, but also to
expose all infringements, wherever they occur, and to support those whose rights have
been neglected or violated. Professional associations and public opinion should support
journalists subject to pressure or who suffer adverse consequences from their dedication to
the defence of human rights.
53. The media should contribute to promoting the just cause of peoples struggling for
freedom and independence and their right to live in peace and equality without foreign
interference. This is especially important for all oppressed peoples who, while struggling
against colonialism, religious 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 inform, the right to privacy,
the right to participate in public communication — all 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 be further explored.
Removal Of Obstacles
Communication, with its immense possibilities for influencing the minds and behaviour of
people, can be a powerful means of promoting democratisation of society and of widening
public participation in the decision - making 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 or discrimination.”
32. In today's free world 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 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. The
authors of the articles which are published in newspapers have to be critical of the actions
of Government in order to expose its weaknesses. Such articles tend to become an irritant
or even a threat to power. Governments naturally take recourse to suppress newspapers
publishing such articles in different ways. Over the years, Governments in different parts
of the world have used diverse methods to keep press under control. They have followed
carrot- and- 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 pre-
censorship, 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,
canalisation 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,
democratic constitutions all over the world have made provisions guaranteeing the
freedom of speech and expression laying down the limits of interference with it. It is,
therefore, 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.
33. Thomas I. Emerson in his article entitled “Toward, a General Theory of the First
Amendment ” [(1963) 72 Yale Law Journal 877 at p. 906] while dealing with the role of
the judicial institutions 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 protecting freedom of expression against the will of the majority raises
more difficult questions. Certainly judicial institutions must reflect the traditions, ideals
and assumptions, and in the end must respond to the needs , claims and expectations, of the
social order in which they operate. They must not, and ultimately cannot , 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 underestimate
the authority and prestige it has achieved over the years. Representing the “conscience of
the community” it has come to possess a very real power to keep alive and vital the higher

values and goals toward which our society imperfectly strives.... Given its prestige, it
would appear that the power of the Court to protect freedom of expression is unlikely to
be substantially curtailed unless the whole structure of our democratic institutions is
threatened.”
34. What is stated above applies to the Indian courts with equal force. In Romesh Thappar
case , Brij Bhushan case , Express Newspapers (Private) Ltd. v . Union of India4, Sakal
Papers (P) Ltd. v . Union of India5 and Bennett Coleman case this Court has very
strongly pronounced in favour of the freedom of press. Of these, we shall refer to some
observations made by this Court in some of them .
35. In Romesh Thappar case this Court said at p. 602:
“... (The freedom) lay at the foundation of all democratic organisations, for without free
political discussion no public education, so essential for the proper functioning of the
processes of popular government , is possible. A freedom of 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 pruning them away, to injure the vigour of those yielding the proper
fruits’.”
36. In Bennett Coleman case A.N Ray, C.J on behalf of the majority said at p. 796 (SCC
p. 823, para 80) thus:
“The faith of a citizen is that political wisdom and virtue 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 rests 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 ‘Ark of the
Covenant’ in every democracy.... The newspapers give ideas. The newspapers give the
people the freedom to find out what ideas are correct.”
37. In the very same case , Mathew, J . observed at p. 818: (SCC p. 846, paras 168, 169)
“The constitutional guarantee of freedom of speech is not so much for the benefit of the
press as it is for the benefit of the public. The freedom of speech includes within its
compass the right of all citizens to read and be informed. In Time Inc. v . Hill6 the U.S
Supreme Court said :
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 . Connecticut381 US 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 utter or to
print, but the right to read.”

38. Justice Mathew proceeded to observe (at pp. 819-20): (SCC pp. 847-48, paras 173,
174, 175)
“Under Article 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 tile 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. Newspaper is the
most potent means for educating the people as it is read by those who read nothing else
and, in politics, the common man gets his education mostly from newspaper.
The affirmative obligation of the Government to permit the import of newsprint by

expending foreign exchange in that behalf is not only because press has a fundamental
right to express itself , but also because the 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 clause 3 of the Imports (Control) Order, 1955,
totally prohibit the import of newsprint and thus disable any person from carrying on a
business in newsprint, if it is in the general interest of the public not to expend any foreign
exchange 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 to educate the people as also to satisfy the individual
need for self expression, 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 maintaining or increasing circulation of the newspapers. It is said that a
proprietor of a newspaper has the freedom to cater 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
cannot curtail the circulation and increase the pages. A claim to enlarge the volume of
speech by diminishing the circulation raises the problem of reconciling the citizens' right
to unfettered exercise of speech in volume with the community's right to undiminished
circulation. Both rights fall within the ambit of the concept of freedom of speech as
explained above .”
39. The Second Press Commission has explained the concept of freedom of press in its
Report (Vol. I pp. 34-35) thus:
“The expression ‘freedom of the press’ carries different meanings to different people.
Individuals, whether professional journalists or 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 published in his paper. Some others emphasize the right of the owners to
market their publication. To Justice Holmes, the main purpose of the freedom was to
prevent all prior restraint on publication.
16. The theory is that in a democracy freedom of expression is indispensable as all men
are entitled to participate in the process of formulation of common decisions . Indeed,
freedom of expression is the first condition of liberty. It occupies a preferred position in
the hirearchy of liberties giving succour and protection to other liberties. It has been truly
said that it is the mother of all other liberties. The Press as a medium of communication is
a modern phenomenon. It has immense power to advance or thwart the progress of
civilization. Its freedom can be used to create a brave new world or to bring about
universal catastrophe.
17. Freedom of speech presupposes that right conclusions are more likely to be gathered
out of a multitude of tongues than through any kind of authoritative selection. It rests on
the assumption that the widest possible dissemination of information from as many diverse
and antagonistic 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 different facts and colours as possible. A citizen is entirely dependent on the Press
for the quality, proportion and extent of his news supply. In such a situation, the exclusive
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 newspaper industry is concentrated in a few hands, the chance of an idea antagonistic
to the idea of the owners getting access to the market becomes very remote. But our
constitutional law has been indifferent 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 assumption 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.”
40. The petitioners have heavily relied upon the decision of this Court in Sakal case in
which the constitutionality of the Newspaper (Price and Page) Act, 1956 and the Daily
Newspaper (Price and Page) Order, 1960 arose for consideration. The petitioner 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 newspaper Sakal
had a net circulation of 52,000 copies on weekdays 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 ten pages and was
priced at 12 paise. About 40% of the space in the newspaper 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 according to the price charged,
prescribed the number of supplements to be published and prohibited the publication and
sale of newspapers in contravention of the Act. It also provided for the regulation of the
size and area of advertising matter contained in a newspaper. Penalties 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 doing then, the
petitioner had to raise the price from 7 paise to 8 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 contention of the petitioner in that case was that the impugned 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
legislation was challenged on the ground that they violated Article 19(1) (a) of the
Constitution . The Union Government contested the petition. It pleaded that the impugned
Act and the Order had been passed with a view to preventing unfair competition among
newspapers and also with a view to preventing the rise of monopolistic combines so that
newspapers might have fair opportunities of free discussion. It was also contended that the
impugned Act and the impugned Order had been passed in the public interest and the
petitioner's business being a trading activity falling under Article 19(1) (g) of the
Constitution any restriction imposed by the said Act and the Order was protected by
Article 19(6) of the Constitution . This Court negativing the contention of the Union
Government observed at p. 866 thus:
“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 the right of
freedom of 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
conception of the freedom of speech viz. the right to circulate ones views to all whom
one can reach or care to reach for the imposition of a restriction. It seeks to achieve its
object of enabling what are termed the smaller newspapers to secure larger circulation by
provisions which without disguise are aimed at restricting the circulation of what are
termed the larger papers with better financial strength. The impugned law far from being
one , which merely interferes with the right of freedom of speech incidentally, does so
directly though it seeks to achieve the end by purporting to regulate the business aspect of
a newspaper. Such a course is not permissible and the courts must be ever vigilant in

guarding 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 Constitution 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 newspapers which would necessarily
undermine their power to influence public opinion it cannot but be regarded as a
dangerous weapon which is capable of being used against democracy itself .”
41. Continuing further the Court observed at pages 867 and 868 thus:
“It was argued that the object of the Act was to prevent monopolies and that monopolies
are obnoxious. We will assume that monopolies are always against public interest and
deserve to be suppressed. Even so, upon 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.
The legitimacy of the result intended to be achieved does not necessarily imply that every
means to achieve it is permissible; for even if the end is desirable and permissible, the
means employed must not transgress the limits laid down by the Constitution , if they
directly impinge on any of the fundamental rights guaranteed by the Constitution it is no
answer when the constitutionality of the measure is challenged that apart from the
fundamental right infringed the provision is otherwise legal.”
42. We have so far seen the importance of the freedom of speech and expression which
includes the freedom of press. We shall 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?.
43. Leaving aside small newspaper establishments whose circulation 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 situated in
urban areas occupying large buildings which have to be provided with all the services
rendered by municipal authorities. They employ hundreds of employees. Capital
investment in many of them is in the order of millions of rupees. Large quantities of
printing machinery are utilised by them , a large part of which is imported from abroad.
They have to be provided with telephones, teleprinters, postal and telegraphic services,
wireless communication system etc. Their newspapers have to be transported 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 exchequer. They have to bear the common fiscal burden like all others.
44. While examining the constitutionality of a law which is alleged to contravene Article
19(1)(a) of the Constitution , we cannot , no doubt , be solely guided by the decisions of
the Supreme Court of the United States of America. But in order to understand the basic
principles of freedom of speech and expression and the need for that freedom in a
democratic country, we may take them into consideration. The pattern of Article 19(1)(a)
and of Article 19(1) (g) of our 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 are to
be read along with clauses (2) and (6) of Article 19 which carve out areas in respect of
which valid legislation can be made . It may be noticed that the newspaper industry has
not been “granted exemption from taxation in express terms. On the other hand Entry 92
of List I of the Seventh Schedule to the Constitution empowers Parliament to make laws
levying taxes on sale or purchase of newspapers and on advertisements published therein.
45. It is relevant to refer here to a few extracts from the speech of Shri Deshbandhu Gupta
on the floor of the Constituent Assembly opposing the provisions in the Draft Constitution
which authorised the State Legislatures to levy sales tax on sale of newspapers and tax on
advertisements in newspapers. He said :
“... 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.... I claim that newspapers do
deserve a distinctive treatment . They are not an industry in the sense that other industries
are. This has been recognised 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 would, therefore, 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.
Sir, after all , this is an enabling clause. It does not say that there shall be sales and
advertisement tax imposed on newspapers. It does not commit the House today to the
imposition of a tax on the sales of or a tax on advertisements 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 should be done by the representatives of
the whole country realising the full implications of their action. It should not be an isolated

act on the part of some Ministry of some Province. That was the fundamental basis of our
amendment .... If today all newspapers including those published from Delhi are opposing
the imposition of these taxes with one voice and demanding their inclusion in the Central
List, they do so, not because it is a question of saving some money, but because the
fundamental question of the liberty of the press is involved. By advocating their transfer to
the Central List we are prepared to run the risk of having these taxes imposed in Delhi,
and in other provinces which have not sought to impose such taxes so far. But we do not
want to leave it to the Provinces so that the liberty of the press remains unimpaired. We
have faith in the Parliament; we have faith in the collective wisdom of the country and we
have no doubt that when this matter is viewed in the correct perspective, there will be no
such taxes imposed on the newspapers, but we have not got that much faith in the
Provincial Ministries. It is in that hope and having a full realisation of the situation that we
have agreed, as a matter of compromise, or should I say as a lesser evil, to have these two
taxes transferred from the Provincial to the Central List.” (Vide Constituent Assembly
Debates;,) Vol. IX, pp. 1175-1180 dated September 9, 1949.)”
46. Ultimately the power to levy taxes on the sale or purchase of newspapers and on
advertisement published therein was conferred on Parliament by Entry 92 of List I of the
Seventh Schedule to the Constitution . This shows the anxiety on the part of the framers of
our Constitution to protect the newspapers against local pressures. But they, however, did
not agree to provide any constitutional immunity against such taxation. The power to levy
customs duties on goods imported into the country is also entrusted to Parliament by Entry
83 in List I of the Seventh Schedule to the Constitution .
47. On the power of the Government in the United States of America to levy taxes on and
to provide for the licensing of newspapers, Corpus Juris Secundum (Vol. 16) says at p.
1132 as follows:
“213. (13) Taxing and Licensing.—The constitutional guaranties of freedom of speech and
of the press are subject to the proper exercise of the government's power of taxation, and
reasonable license fee's may be imposed on trades or occupations concerned with the
dissemination of literature or ideas.
As a general rule, the constitutional guaranties of freedom of speech and of the press are
subject to the proper exercise of the Government's power of taxation, so that the imposition
of uniform and non- discriminatory taxes is not invalid as applied to persons or
organisations engaged in the dissemination of ideas through the publication or distribution
of writing. The guarantee of freedom of the press does not forbid the taxation of money or
property employed in the publishing business , or the imposition of reasonable licenses and
license fees on trades or occupations concerned with the dissemination of literature or

ideas.
A license or license tax to permit the enjoyment of freedom of speech and freedom of press
may not, however, be required as a form of censorship, and where the purpose of the tax or
license is not for revenue, or for reasonable regulation, but is a deliberate and calculated
device to prevent , or to curtail the opportunity for the acquisition of knowledge by the
people in respect of their governmental affairs, the statute or ordinance violates the
constitutional guaranties, and particularly the Fourteenth Amendment to the federal
Constitution . While an ordinance imposing a tax on, and requiring a license for, the
privilege of advertising by distributing books, circulars, or pamphlets has been held valid,
an ordinance requiring the payment of a license tax by sweet vendors or peddlers is invalid
as applied to members of a religious group distributing religious literature as part of their
activities, at least where the fee is not merely a nominal one imposed to defray the cost of
regulation notwithstanding the ordinance is non-discriminatory. A governmental regulation
requiring a license to solicit, for compensation, memberships in organizations requiring the
payment of dues is invalid, where it fixes indefinite standards for the granting of a license
to an applicant. A provision of a retail sales tax act providing that a retailer shall not
advertise as to the non-collection of sales tax from purchasers does not deprive retailers
of the constitutional right of free speech.”
48. The above subject is summarised in American Jurisprudence 2d (Vol. 16) at p. 662
thus:
“Speech can be effectively limited by the exercise of the taxing power. Where the
constitutional right to speak is sought to be deterred by a state's general taxing program,
due process demands that the speech be unencumbered until the state comes forward with
sufficient proof to justify its inhibition. But constitutional guaranties are not violated by a
statute the controlling purpose of which is to raise revenue to help defray the current
expenses of state government and state obligations, and which shows no hostility to the
press nor exhibits any purpose or design to restrain the press.”
49. It may be mentioned here that the First Amendment to the Constitution of the United
States of America is almost in absolute terms. It says that the Congress shall make no
law abridging the freedom of the press. Yet the American courts have recognised the
power of the State to levy taxes on newspaper establishments, of course, subject to judicial
review by courts by the application of the due process of law principle. “Due process of
law does not forbid all social control; but it protects personal liberty against social control,
unless such social control is reasonable either because of a constitutional exercise of the
police power, or of the power of taxation or of the power of eminent domain.” If any
legislation delimiting personal liberty is held to be outside of all three of these categories,
it is taking away of personal liberty without due process of law and is unconstitutional. The

police power, taxation and eminent domain are all forms of social control which are
essential for peace and good government . “The police power is the legal capacity of the
sovereignty or one of its governmental agents, to delimit the personal liberty of persons
by means which bear a substantial relation to the end to be accomplished for the protection
of social interests which reasonably need protection . Taxation is the legal capacity of
sovereignty or one of its governmental agents to exact or impose a charge upon persons
or their property for the support of the government and for other public purposes which it
may constitutionally carry out Eminent domain is the legal capacity of sovereignty or one
of its governmental agents, to take private property for public use upon the payment of
just compensation.” It is under the above said sovereign power of taxation the
Government is able to levy taxes on the publishers of newspapers too , subject to judicial
review by courts notwithstanding the language of the First Amendment which is absolute
in terms. In India too the power to levy tax even on persons carrying on the business of
publishing newspapers has got to be 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.
50. Thomas I. Emerson in his article on the First Amendment [(1963) 72 Yale Law
Journal, 941] has made certain relevant observations on the power of the State to impose
taxes and economic regulations on newspaper industry. He says:
“(a) Taxation and Economic Regulation. — Regular tax measures, economic regulations,
social welfare legislation and similar provisions may, of course, have some effect upon
freedom of expression when applied to persons or organizations engaged in various forms
of communication. But where the burden is the same as that borne by others engaged in
different forms of activity, the similar impact on expression seems clearly insufficient to
constitute an ‘abridging’ of freedom of expression. Hence a general corporate tax, wage
and hour or collective bargaining legislation, factory laws and the like are as applicable to
a corporation engaged in newspaper publishing as to other business organisations. On the
other hand , the use of such measures as a sanction to diminish the volume of expression or
control its content would clearly be as impermissible an ‘abridgment’ as direct criminal
prohibitions. The line may sometimes be difficult to draw , the more so as the scope of the
regulation is narrowed.
Two principles for delineating the bounds of ‘abridging’ may be stated . First , as a general
proposition the validity of the measure may be tested by the rule that it must be equally
applicable to a substantially larger group than that engaged in expression. Thus a special
tax on the press alone, or a tax exemption available only to those with particular political
views or associations, would not be permitted. Second, neither the substantive nor
procedural provisions of the measure, even though framed in general terms, may place any

substantial burden on expression because of their peculiar impact in that area. Thus the
enforcement of a tax or corporate registration statute by requiring disclosure of
membership in an association, where such disclosure would substantially impair freedom
of expression, should be found to violate first amendment protection .”
(emphasis supplied)
51. This view appears to have been , accepted by our Second Press Commission in its
Report (Vol. I) at p. 35. The Commission observes:
“21. Economic and tax measures, legislation relating to social welfare and wages, factory
laws, etc, may have some effect upon freedom of the Press when applied to persons or
institutions engaged in various forms of communication. But where the burden placed on
them is the same as that borne by others engaged in different forms of activity, it does not
constitute abridgment of freedom of the Press. The use of such measures, however, to
control the ‘content’ of expression would be clearly impermissible.”
52. In Alice Lee Grosjean, Supervisor of Public Accounts for the State of Louisiana v .
American Press Co.297 US 233 in which the appellants had questioned the constitutional
validity of an Act of Louisiana which required every person engaged in the business of
selling, or making any charge for, advertising or for advertisements , printed or published
in any newspaper, periodical etc. having a circulation of more than 20,000 copies per week
to pay, in addition to all other taxes, a license tax for the privilege of engaging in such
business in the State of Louisiana of two per cent (2%) of the gross receipts of such
business , the Supreme Court of the United States observed at pp. 668-69:
“In the light of all that has now been said , it is evident that the restricted rules of the
English law in respect of the freedom of the press in force when the Constitution was
adopted were never accepted by the American colonists, and that by the First Amendment
it was meant to preclude the national government , and by the Fourteenth Amendment to
preclude the states , from adopting any form of previous restraint upon printed
publications, or their circulation, including that which had theretofore been effected by
these two well known and odious methods....
It is not intended by anything, we have said to suggest that the owners of newspapers are
immune from any of the ordinary forms of taxation for support of the government . But
this is not an ordinary form of tax, but one single in kind, with a long history of hostile
misuse against the freedom of the press.
The predominant purpose of the grant of immunity here invoked was to preserve an
untramelled press as a vital source of public information. The newspapers, magazines and
other journals of the country, it is safe to say, have shed and continue to shed, more light

on the public and business affairs of the nation than any other instrumentality of publicity;
and since informed public opinion is the most potent of all restraints upon
misgovernment, the suppression or abridgment of the publicity afforded by a free press
cannot be regarded otherwise than with grave concern. The tax here involved is bad not
because it takes money from the pockets of the appellees. If that were all , a wholly
different question would be presented. It is bad because , in the light of its history and of
its present setting, it is seen to be a deliberate and calculated device in the guise of a tax to
limit the circulation of information to which the public is entitled in virtue of the
constitutional guaranties. A free press stands as one of the great interpreters between the
Government and the people. To allow it to be fettered is to fetter ourselves.”
(emphasis supplied)
53. The levy imposed by Louisiana was quashed by the Supreme Court of the United
States of America in the above case on the ground that it violated the First Amendment
to the Constitution of the United States of America since it was of the view that the tax
levied in this case was a device to limit the circulation of information. The Court ,
however, did not say that no tax could be levied on the press in any event.
54. In Robert Murdock, Jr. v . Commonwealth of Pennsylvania (City of Jeannette)9
the Supreme Court of the United States of America declared as unconstitutional and
violative of the First Amendment to the Constitution of the United States of America
which guaranteed freedom of speech and expression, an ordinance which imposed a
licence tax on persons canvassing for and soliciting within the city of Jeannette orders for
goods, paintings, pictures, wares or merchandise of any kind or persons delivering such
articles under orders so obtained or solicited. The petitioners in that case were “Jehovah's
Witnesses” who went about from door to door in the city of Jeannette distributing
literature and soliciting people to purchase certain religious books and pamphlets. None of
them obtained a licence by paying the prescribed fee and they were convicted for violating
the Ordinance by the Superior Court of Pennsylvania. The Supreme Court of the United
States of America quashed the conviction holding that the Ordinance violated the First
Amendment . Douglas , J . who wrote the majority opinion observed at p. 1299 and 1300
thus:
“In all of these cases the issuance of the permit or license is dependent on the payment of
a license tax. And the license tax is fixed in amount and unrelated to the scope of the
activities of petitioners or to their realized revenues. It is not a nominal fee imposed as a
regulatory measure to defray the excuses of policing the activities in question. It is in no
way apportioned. It is a flat license tax levied and collected as a condition to the pursuit of
activities whose enjoyment is guaranteed by the First Amendment . Accordingly, it
restrains in advance those constitutional liberties of press and religion and inevitably tends
to suppress their exercise. That is almost uniformly recognised as the inherent vice and

evil of this flat license tax ....
The fact that the ordinance is ‘non-discriminatory’ is immaterial. The protection afforded
by the First Amendment is not so restricted. A licence tax certainly does not acquire
constitutional validity because it classifies the privileges protected by the First
Amendment along with the wares and merchandise of hucksters and peddlers and treats
them all alike. Such equality in treatment does not save the ordinance. Freedom of press,
freedom of speech, freedom of religion are in a preferred position.”
(emphasis supplied)
55. Justice Reed who dissented from the majority observed at p. 1306 thus:
“It will be observed that there is no suggestion of freedom from taxation, and this
statement is equally true of the other State constitutional provisions. It may be concluded
that neither in the state or the federal constitutions was general taxation of church or press
interdicted.
Is there anything in the decisions of this Court which indicates that church or press is free
from the financial burdens of Government ? We find nothing. Religious societies depend
for their exemptions from taxation upon state constitutions or general statutes, not upon
the Federal Constitution . Gibbons v . District of Columbia116 US 404. This Court has
held that the chief purpose of the free press guarantee was to prevent previous restraints
upon publication. Near v . Minnesota283 US 697, 713. In Grosjean v . American Press
Co. 297 US 233, 250 it was said that the predominant purpose was to preserve ‘an
untramelled press as a vital source of public information’. In that case , a gross receipts tax
on advertisements in papers with a circulation of more than twenty thousand copies per
week was held invalid because ‘a deliberate and calculated device in the guise of a tax to
limit the circulation.…’”
56. There was this further comment:

“It is not intended by anything we have said to suggest that the owners of newspapers are
immune from any of the ordinary forms of taxation for support of the Government . But
this is not an ordinary form of tax, but one single in kind, with a long history of hostile
misuse against the freedom of the press.
It may be said , however, that ours is a too narrow, technical and legalistic approach to the
problem of state taxation of the activities of church and press; that we should look not to
the expressed or historical meaning of the First Amendment but to the broad principles of
free speech and free exercise of religion which pervade our national way of life. It may be
that the Fourteenth Amendment guarantees these principles rather than the more definite

concept expressed in the First Amendment . This would mean that as a Court , we should
determine what sort of liberty it is that the due process clause of the Fourteenth
Amendment guarantees against state restrictions on speech and church....
Nor do we understand that the Court now maintains that the Federal Constitution frees
press or religion of any tax except such occupational taxes as those here levied. Income
taxes, ad valorem taxes, even occupational taxes are presumably valid, save only a license
tax on sales of religious books. Can it be that the Constitution permits a tax on the printing
presses and the gross income of a metropolitan newspaper but denies the right to lay an
occupational tax on the distributors of the same papers? Does the exemption apply to
booksellers or distributors of magazines or only to religious publications? And, if the
latter, to what distributors? Or to what books? Or is this Court saying that a religious
practice of book distribution is free from taxation because a state cannot prohibit the
‘free exercise thereof’ and a newspaper is subject to the same tax even though the same
Constitutional Amendment says the state cannot abridge the freedom of the press? It has
never been thought before that freedom from taxation was a perquisite attaching to the
privileges of the First Amendment .”
57. Justice Reed added at pp. 1307 and 1308 thus:

“It is urged that such a tax as this may be used readily to restrict the dissemination of ideas.
This must be conceded but the possibility of misuse does not make a tax unconstitutional.
No abuse is claimed here. The ordinances in some of these cases are the general
occupation license type covering many businesses. In the Jeannette prosecutions, the
ordinance involved lays the usual tax on canvassing or soliciting sales of goods, wares and
merchandise. It was passed in 1898. Every power of taxation or regulation is capable of
abuse. Each one , to some extent, prohibits the free exercise of religion and abridges the
freedom of the press, but that is hardly a reason for denying the power. If the tax is used
oppressively the law will protect the victims of such action.”
(emphasis supplied)
58. Justice Frankfurter who also dissented from the majority observed at pp. 1310 and
1311 thus:
“It cannot be said that the petitioners are constitutionally exempt from taxation merely
because they may be engaged in religious activities or because such activities may
constitute an exercise of a constitutional right ....
Nor can a tax be invalidated merely because it falls upon activities which constitute an
exercise of a constitutional right . The First Amendment of course protects the right to

publish a newspaper or a magazine or a book. But the crucial question is — how much
protection does the Amendment give, and against what is the right protected? It is
certainly true that the protection afforded the freedom of the press by the First
Amendment does not include exemption from all taxation. A tax upon newspaper
publishing is not invalid simply because it falls upon the exercise of a constitutional right .
Such a tax might be invalid if it invidiously singled out newspapers publishing for bearing
the burdens of taxation or imposed upon them in such ways as to encroach on the essential
scope of a free press. If the Court could justifiably hold that the tax measures in these
cases were vulnerable on that ground, I would unreservedly agree. But the Court has not
done so, and indeed could not.”
(emphasis supplied)
59. In the above case it may be noticed that Douglas , J . who gave the majority opinion
did not say that no tax could be levied at all on a press, but he did not approve of a
uniform license tax unrelated to the scope of the activities of the persons who had to bear
it. The dissenting opinions have clearly stated that the press does not enjoy any immunity
from taxation. They, however, say that the taxation should not encroach upon the essential
scope of a free press.
60. We may usefully refer here to a passage in the footnote given below the Essay No. 84
by Alexander Hamilton in The Federalist. It reads:
“It cannot certainly be pretended that any degree of duties, however low, would be an
abridgment of the liberty of the press. We know that newspapers are taxed in Great
Britain, and yet it is notorious that the press nowhere enjoys greater liberty than in that
country. And if duties of any kind may be laid without a violation of that liberty, it is
evident that the extent must depend on legislative discretion, regulated by public
opinion; ...”
61. At this stage we find it useful to refer to a decision of the Privy Council in Attorney-
General v . Antigua Times Ltd1975 3 All ER 81 PC where the Judicial Committee of
the Privy Council was called upon to decide about the validity of the imposition of a
licence fee of $ 600 annually on the publisher of a newspaper under the Newspapers
Registration (Amendment ) Act, 1971. Section 10 of the Constitution of Antigua read as
follows:
“10. (1) Except with his own consent, no person shall be hindered in the enjoyment of his
freedom of expression, and for the purposes of this section the said freedom includes the
freedom to hold opinions and to receive and impart ideas and information without
interference, and freedom from interference with his correspondence and other means of
communication.

(2) Nothing contained in or done under the authority of any law shall be held to be
inconsistent with or in contravention of this section to the extent that the law in question
makes provision — (a) that is reasonably required — (i) in the interests of defence, public
safety, public order, public morality or public health; or (ii) for the purpose of protecting
the reputations, rights and freedoms of other persons, or the private lives of persons
concerned in legal proceedings, preventing the disclosure of information received in
confidence, maintaining the authority and independence of the courts, or regulating
telephony, telegraphy, posts, wireless, broadcasting, television or other means of
communication, public exhibitions or public entertainments: or ( b ) that imposes
restrictions upon public officers.”
62. Lord Fraser who delivered the judgment of the Privy Council upheld the levy of the
licence fee as being reasonably required in the interests of defence and for securing public
safety etc. referred to in Section 10(2)(a)(i) of the Constitution of Antigua. The learned
Lord observed in that connection thus:
“Revenue requires to be raised in the interests of defence and for securing public safety,
public order, public morality and public health and if this tax was reasonably required to
raise revenue for these purposes or for any of them , then SIB is not to be treated as
contravening the Constitution .
In some cases it may be possible for a court to decide from a mere perusal of an Act
whether it was or was not reasonably required. In other cases the Act will not provide the
answer to that question. In such cases has evidence to be brought before the Court of the
reasons for the Act and to show that it was reasonably required? Their Lordships think that
the proper approach to the question is to presume, until the contrary appears or is shown,
that all Acts passed by the Parliament of Antigua were reasonably required. This
presumption will be rebutted if the statutory provisions in question are, to use the words of
Louisy, J ., ‘so arbitrary as to compel the conclusion that it does not involve an exertion of
the taxing power but constitutes in substance and effect, the direct execution of a different
and forbidden power’. If the amount of the licence fee was so manifestly excessive as to
lead to the conclusion that the real reason for its imposition was not the raising of revenue
but the preventing of the publication of newspapers, then that would justify the conclusion
that the law was not reasonably required for the raising of revenue.
In Their Lordships' opinion the presumption that the Newspapers Registration

(Amendment ) Act, 1971 was reasonably required has not been rebutted and they do not
regard the amount of the licence fee as manifestly excessive and of such a character as to
lead to the conclusion that S IB was not enacted to raise revenue but for some other

purpose.”
(emphasis supplied)
63. Here again it is seen that the Privy Council was of the view that the law did not forbid
the levy of fee on the publisher of a newspaper but it would be open to challenge if the real
reason for its imposition was not the raising of revenue but the preventing of the
publication of newspaper.
64. At this stage it is necessary to refer to a forceful argument addressed before us . It was
urged on behalf of the petitioners that the recognition of the power of the Government to
levy taxes of any kind on the newspaper establishments would ring in the death-knell of
the freedom of press and would be totally against the spirit of the Constitution . It is
contended that the Government is likely to use it to make the press subservient to the
Government . It is argued that when once this power is conceded, newspapermen will have
to run after the Government and hence it ought not to be done. This raises a philosophical
question — Press versus Government . We do not think it is 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, however, good to
remember some statements made in the past by some wise men connected with
newspapers in order to develop the culture of an independent press. Hazlitt advised editors
to stay in their garrets and avoid exposing themselves to the subtleties of power. Walter
Lippman in his address to the International Press Institute some years ago said that the
danger to the independence and integrity of journalists did not come from the pressures
that might be put on them ; it was that they might be captured and captivated by the
company they keep. Arthus Krock after 60 years of experience said that it “is true that in
most cases, the price of friendship with a politician is so great for any newspaperman to
pay”. A.P Wadsworth of the Manchester Guardian said “that no editor should ever be on
personal terms with our leaders for fear of creating a false sense of relation of confidence”.
James Margach says that “when leading media figures see too much rather than too little
of Prime Ministers that the freedom of press is endangered”. Lord Salisbury told Buckle a
famous editor in England “You are the first person who has not come to see me in the last
few days who is not wanting something at my hands — place or decoration or peerage.
You only want information”. Charles Mitchell wrote in ‘Newspaper Directory’: “The
Press has now so great and so extensive an influence on public opinion ... that ... its
conductors should be gentlemen in the true sense of the word. They should be equally
above corruption and intimidation incapable of being warped by personal considerations
from the broad path of truth and honour; superior to all attempts at misrepresenting or
mystifying public events”. If the press ceases to be independent the healthy influence of
the press and public opinion will soon be substituted by the traditional influences of
landlordism and feudalism. The press lords should endeavour to see that their interests do
not come into conflict with their duties. All this is said only to show that Government
alone may not always be the culprit in destroying the independence of the press. Be that as
it may, it is difficult to grant that merely because the Government has the power to levy

taxes, the freedom of press would be totally lost. As stated earlier, the court is always
there to hold the balance even and to strike down any unconstitutional invasion of that
freedom.
65. 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) of
the Constitution , the first because it is concerned with the field of expression and
communication and the second because communication has become an occupation or
profession and because there is an invasion of trade, business and industry into that field
where freedom of expression is being exercised. 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 limitation 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.
66. The petitioners, however, have placed strong reliance on the Sakal case and the
Bennett Coleman case in support of their case that any tax on newsprint which is the
most important component of a newspaper is unconstitutional. They have drawn our
attention to the following passage in the decision in Sakal case which is at p. 863:
“It may well be within the power of the State to place, in the interest of the general public,
restrictions upon the right of a citizen to carry on business but it is not open to the State to
achieve this object by directly and immediately curtailing any other freedom of that citizen
guaranteed by the Constitution and which is not susceptible of abridgment on the same
grounds as are set out in clause (6) of Article 19. Therefore, the right of freedom of
speech cannot be taken away with the object of placing restrictions on the business
activities of a citizen. Freedom of speech can be restricted only in the interests of the
security of the State, friendly relations with foreign State, public order, decency or morality
or in relation to contempt of court , defamation or incitement to an offence. It cannot , like
the freedom to carry on business , be curtailed in the interest of the general public. If a law
directly affecting it is challenged it is no answer that the restrictions enacted by it are
justifiable under clauses (3) to (6). For the scheme of Article 19 is to enumerate different
freedoms separately and then to specify the extent of restrictions to which they may be
subjected and the objects for securing which this could be done. A citizen is entitled to
enjoy each and every one of the freedoms together and clause (1) does not prefer one
freedom to another. That is the plain meaning of this clause. It follows from this that the
State cannot make a law which directly restricts one freedom even for securing the better

enjoyment of another freedom. All the greater reason, therefore for holding that the State
cannot directly restrict one freedom by placing an otherwise permissible restriction on
another freedom.”
67. In Bennett Coleman case the question which arise for consideration related to the
validity of a restriction imposed under the newsprint policy which had certain
objectionable features such as (i) that no newspaper or new edition could be started by a
common ownership unit even within the authorised quota of newsprint, (ii) that there was a
limitation on the maximum number of pages, no adjustment being permitted between
circulation and pages so as to increase pages, (iii) that a big newspaper was prohibited and
prevented from increasing the number of pages, page area, and periodicity by reducing
circulation to meet the requirement even within its admissible quota etc. The majority held
that the fixation of page limit had not only deprived the petitioners of their economic
vitality but also restricted their freedom of expression. It also held that such restriction of
pages resulted in reduction of advertisement revenue and thus adversely affected the
capacity of a newspaper to carry on its activity which is protected by Article 19(1)(a) of
the Constitution .
68. We have carefully considered the above two decisions . In the first case the Court was
concerned with the newspaper price- page policy and in the second the newsprint policy
imposed by the Government had been challenged. Neither of them was concerned with
the power of Parliament to levy tax on any goods used by the newspaper industry. As we
have observed earlier taxes have to be levied for the support of the Government and
newspapers which derive benefit from the public expenditure cannot disclaim their
liability to contribute a fair and reasonable amount to the public exchequer. What may,
however, have to be observed in levying a tax on newspaper industry is that it should not
be an over-burden on newspapers which constitute the Fourth Estate of the country. Nor
should it single out newspaper industry for harsh treatment . A wise administrator should
realise that the imposition of a tax like the customs duty on newsprint is an imposition of
knowledge and would virtually amount to a burden imposed on a man for being literate
and for being conscious of his duty as a citizen to inform himself about the world around
him. “The public interest in freedom of discussion (of which the freedom of the press is
one aspect) stems from the requirement that members of a democratic society should be
sufficiently informed that they may influence intelligently the decisions which may affect
themselves.” (Per Lord Simon of Glaisdale in Attorney-General v . Times Newspapers
Ltd.1973 3 All ER 54). Freedom of expression, as learned writers have observed, has
four broad social purposes to serve: (i) it helps an individual to attain self fulfilment, (ii)
it assists in the discovery of truth, (iii) it strengthens the capacity of an 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 involved here is the people's right to know.
Freedom of speech and expression should, therefore, receive a generous support from all

those who believe in the participation of people in the administration. It is on account of
this special interest which society has in the freedom of speech and expression that the
approach of the Government should be more cautious while levying taxes on matters
concerning newspaper industry than while levying taxes on other matters . It is true that
this Court has adopted a liberal approach while dealing with fiscal measures and has
upheld different kinds of taxes levied on property, business , trade and industry as they
were found to be in the public interest. But in the cases before us the Court is called upon
to reconcile the social interest involved in the freedom of speech and expression with the
public interest involved in the fiscal levies imposed by the Government specially because
newsprint constitutes the body, if expression happens to be the soul.
69. 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.
70. While we , therefore, cannot agree with the contention that no tax can be levied on
newspaper industry, we hold that any such levy is subject to review by courts in the light
of the provisions of the Constitution .
V . Are the impugned notifications issued under Section 25 of the Customs Act,
1962beyond the reach of the Administrative Law?
71. It is argued on behalf of the Government that a notification issued under Section
25(1) of the Customs Act granting, modifying or withdrawing an exemption from duty
being in the nature of a piece of subordinate legislation, its validity cannot be tested by
the Court by applying the standards applicable to an administrative action. Reliance is
placed on the decision of this Court in Narinder Chand Hem Raj v . Lt. Governor,
Administrator, Union Territory, Himachal Pradesh1972 1 SCR 940 in support of the above
contention. In that case the appellants were wine merchants carrying on business in
Simla. At the auction held for the purpose of granting the privilege to sell the Indian-made
foreign liquor the appellants were the highest bidders. It appears that before the auction
was held the Collector of Excise and Taxation had announced that no sales tax would be
liable to be paid on the sale of liquor and despite this assurance the Government had
levied and collected from the appellants a certain amount by way of sales tax. The
appellants prayed for the issue of a writ to the Government restraining them from levying
any sales tax and to refund what had been recovered from them by way of sales tax
already. It was contended on behalf of the Government of Himachal Pradesh that non-
collection of sales tax was possible only on the issue of a notification by the Government
pursuant to its statutory power under the Punjab General Sales Tax Act which was in force
in the area in question shifting “liquor” which was in Schedule ‘A’ to Schedule ‘B ’ to the
Punjab General Sales Tax Act and that such a notification could not be issued because the

Central Government had not given its requisite approval. Hence it was urged by the
Government that since sales tax had been imposed by law on all items in Schedule ‘A’ it
could not disobey the mandate of law. It further contended that the Court could not issue
a mandamus to the Government to issue a notification to amend the Schedules to the
statute as the act of issuing such a notification was a legislative act and no writ could be
issued to a legislative body or a subordinate legislative body to make a law or to issue a
notification, as the case may be, which would have the effect of amending a law in force.
This Court upheld the contention of the Government . The Court said : (SCC p. 751, para
7)
“Our attention has not been drawn to any provision in that Act empowering the
Government to exempt any assesses from payment of tax. Therefore it is clear that the
appellant was liable to pay the tax imposed under the law. What the appellant really wants
is a mandate from the Court to the competent authority to delete the concerned entry from
Schedule A and include the same in Schedule B . We shall not go into the question
whether the Government of Himachal Pradesh on its own authority was competent to
make the alteration in question or not. We shall assume for our present purpose that it had
such a power. The power to impose a tax is undoubtedly a legislative power. That power
can be exercised by the Legislature directly or subject to certain conditions the Legislature
may delegate that power to some other authority. But the exercise of that power, whether
by the Legislature or by its delegate is an exercise of a legislative power. The fact that the
power was delegated to the executive does not convert that power into an executive or
administrative power. No Court can issue a mandate to a Legislature to enact a particular
law. Similarly no Court can direct a subordinate legislative body to enact or not to enact a
law which it may be competent to enact. The relief as framed by the appellant in his writ
petition does not bring out the real issue calling for determination. In reality he wants this
Court to direct the Government to delete the entry in question from Schedule A and
include the same in Schedule B . Article 265 of the Constitution lays down that no tax
can be levied and collected except by authority of law. Hence the levy of a tax can only be
done by the authority of law and not by any executive order. Unless the executive is
specifically empowered by law to give any exemption, it cannot say that if will not
enforce the law as against a particular person. No Court can give a direction to a
Government to refrain from enforcing a provision of law. Under these circumstances, we
must hold that the relief asked for by the appellant cannot be granted.”
(emphasis supplied)
72. The above decision does not in fact support the contention of the Government in the
cases before us . It is noteworthy that the Court in the passage extracted above has made
a distinction between the amendment of the Schedule to the Punjab General Sales Tax Act
by the issue of a notification by the Government of Himachal Pradesh in exercise of its

power delegated by the Legislature and the power of that Government to rant exemption
under a power to grant exemption. In the present cases we are concerned with a power to
grant exemption conferred on Government by Section 25 of the Customs Act, 1962 and
not with a power to amend the Act by means of a notification. Moreover this was just a
case relating to business in liquor.
73. We shall assume for purposes of these cases 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 thereunder amounts to a piece of subordinate legislation. Even then the
notification is liable to be questioned on the ground that it is an unreasonable one . The
decision of this Court in Municipal Corporation of Delhi v . Birla Cotton, Spinning
and Weaving Mills, DelhiAIR 1968 SC 1232has laid down the above principle. In that
case Wanchoo, C.J while upholding certain taxes levied by the Corporation of Delhi under
Section 150 of the Delhi Municipal Corporation Act, 1957 observed thus:
“Finally there is another check on the power of the Corporation which is inherent in the
matter of exercise of power by subordinate public representative bodies, such as municipal
boards. In such cases if the act of such a body in the exercise of the power conferred on it
by the law is unreasonable, the courts can hold that such exercise is void for
unreasonableness. This principle was laid down as far back as 1898 in Kruse v .
Johnson1898 2 QB 91.”
74. But it appears that the principle enunciated in Kruse v . Johnson is not being applied
so stringently in England now
75. 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 the 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. In England, the Judges
would say “Parliament never intended authority to make such rules. They are unreasonable
and ultra vires”. The present position of law bearing on the above point is stated by
Diplock, L.J in Mixnam's Properties Ltd. v . Chertsey Urban District Council1964 1
QB 214 thus:
“The various special grounds on which subordinate legislation has sometimes been said
to be void … can, I think, today be properly regarded as being particular applications of
the general rule that subordinate legislation, to be valid, must be shown to be within the
powers conferred by the statute. Thus, the kind of unreasonableness which invalidates a
bye- law is not the antonym of ‘reasonableness’ in the sense in which that expression is
used in the common law, but such manifest arbitrariness, injustice or partiality that a court

would say: ‘Parliament never intended to give authority to make such rules; they are
unreasonable and ultra vires’...if the courts can declare subordinate legislation to be invalid
for ‘uncertainty’ as distinct from unenforceable...this must be because Parliament is to be
presumed not to have intended to authorise the subordinate legislative authority to make
changes in the existing law which are uncertain.”
76. Prof. Alan Wharam in his article entitled “Judicial Control of Delegated Legislation:
The Test of Reasonableness” in 36 Modem Law Review 611 at pp. 622-23 has
summarised the present position in England as follows:
(i) It is possible that the courts might invalidate a statutory instrument on the grounds of
unreasonableness or uncertainty, vagueness or arbitrariness; but the writer's view is that for
all practical purposes such instruments must be read as forming part of the parent statute,
subject only to the ultra vires test.
(ii) The courts are prepared to invalidate bye laws, or any other form of legislation,
emanating from an elected, representative authority, on the grounds of unreasonableness.
uncertainty or repugnance to the ordinary law: but they are reluctant to do so and will
exercise their power only in clear cases.
(iii) The courts may be readier to invalidate bye-laws passed by commercial undertakings
under statutory power, although cases reported during the present century suggest that the
distinction between elected authorities and commercial undertakings, as explained in
Kruse v . Johnson might not now be applied so stringently.
(iv) As far as subordinate legislation of non-statutory origin is concerned, this is virtually

obsolete, but it is clear from In re French Protestant Hospital19 that it would be subject to
strict control. [See also H.W.R Wade: Administrative Law (5th Edn.) pp. 747-748.]
77. In India arbitrariness is not a separate ground since it will come within the embargo of
Article 14 of the Constitution . In India any enquiry into the vires of delegated legislation
must be confined to the grounds on which plenary legislation may be questioned, to the
ground that it is contrary to the statute under which it is made , to the ground that it is
contrary to other statutory provisions or that it is so arbitrary that it could not be said to be
in conformity with the statute or that it offends Article 14 of the Constitution .
78. That subordinate legislation cannot be questioned on the ground of violation of
principles of natural justice on which administrative action may be questioned has been
held by this Court in Tulsipur Sugar Co. Ltd. v . Notified Area Committee ,
Tulsipur AIR 1980 SC 882, Rameshchandra Kachardas Porwal v . State of Maharashtra
1981 2 SCC 722 and in Bates v . Lord Hailsham of St. Marylebone1972 1 WLR 1373.
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 powers. 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 a 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.
79. We do not, therefore, find much substance in the contention that the courts cannot at
all exercise judicial control over the impugned notifications. In cases where the power
vested in the Government is a power which has got to 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.
80. The power to grant exemption should, however, be exercised in a reasonable way. Lord
Greene, M.R has explained in Associated Provincial Picture Houses Ltd. v .
Wednesbury Corporation1948 1 KB 223 what a “reasonable way” means as follows:
“It is true the discretion must be exercised reasonably. Now what does that mean?
Lawyers familiar with the phraseology commonly used in relation to the exercise of
statutory discretions often use the word ‘unreasonable’ in a rather comprehensive sense. It
has frequently been used and is frequently used as a general description of the things that
must not be done. For instance, a person entrusted with a discretion must, so to speak,
direct himself properly in law. He must call his own attention to the matters which he is
bound to consider. He must exclude from his consideration matters which are irrelevant to
what he has to consider. If he does not obey those rules, he may truly be said , and often is
said , to be acting “unreasonably”. Similarly, there may be something so absurd that no
sensible person could ever dream that it lay within the powers of the authority. Warrington,
L.J in Short v . Poole Corporation 1926 Ch 66 gave the example of the red- haired
teacher, dismissed because she had red hair. That is unreasonable in one sense. In another
sense it is taking into consideration extraneous matters . It is so unreasonable that it might
almost be described as being done in bad faith; and in fact, all these things run into one
another.”
81. Hence the claim made on behalf of the Government that the impugned notifications
are beyond the reach of the administrative law cannot be accepted without qualification

even though all the grounds that may be urged against an administrative order may not be
available against them .
82. Now the notifications issued on March 1, 1981 and February 28, 1982 under Section
25 of the Customs Act, 1962 which grant exemptions from payment of certain duty
beyond what is mentioned in them are issued by the executive Government . They were
issued in substitution of earlier notifications which had granted total exemption. Such
notifications have to be issued by the Government after taking into consideration all
relevant factors which bear on the reasonableness of the levy on the newsprint. The
Government should strike a just and reasonable balance between the need for ensuring the
right of people to freedom of speech and expression on the one hand and the need to
impose social control on the business of publication of a newspaper on the other. In other
words, the Government must at all material times be conscious of the fact that it is
dealing with an activity protected by Article 19(1)(a) of the Constitution which is vital
to our democratic existence. In deciding the reasonableness of restrictions imposed on any
fundamental right the Court should take into consideration the nature of the right alleged
to have been infringed, the underlying purpose of the restrictions imposed, the
disproportion of the imposition and the prevailing conditions at the relevant time including
the social values whose needs are sought to be satisfied by means of the restrictions. (See
State of Madras v.V.G Row 1952 SCR 597 .) The restriction in question is the burden of
import duty imposed on newsprint. Section 25 of the Customs Act, 1962 under which the
notifications are issued confers a power on the Central Government coupled with a duty
to examine the whole issue in the light of the public interest. It provides that if the Central
Government is satisfied that it is necessary in the public interest so to do it may exempt
generally either absolutely or subject to such conditions goods of any description from the
whole or any part of the customs duty leviable thereon. The Central Government may if it
is satisfied that in the public interest so to do exempt from the payment of 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. It is useful to
refer here to the observations of Lord Denning, M.R in Breen v . Amalgamated
Engineering Union1971 2 QB 175 at p. 190 read thus:
“The discretion of a statutory body is never unfettered. It is a discretion which is to be
exercised according to law. That means at least this: the statutory body must be guided by
relevant considerations and not by irrelevant. If its decision is influenced by extraneous
considerations which it ought not to have taken into account, then the decision cannot
stand. No matter that the statutory body may have acted in good faith; nevertheless the
decision will be set aside. That is established by Padfield v . Minister of Agriculture,
Fisheries and Food1968 AC 997 which is a land mark in modern administrative law.”
83. In any event 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 to any of

the fundamental rights guaranteed under Part III of the Constitution .
VI. Has there been proper exercise of power under Section 25(1) of the Customs Act,
1962?.
84. Freedom of press as the petitioners rightly assert means freedom from interference
from authority which would have the effect of interference with the content and
circulation of newspapers. The most important raw material in the production of a
newspaper is the newsprint. The cost and availability of newsprint determine the price, size
and volume of the publication and also the quantum of news, views and advertisements
appearing therein. It is not disputed that the cost of newsprint works out to nearly 60% of
the cost of production of newspaper. In the case of a big newspaper the realisation by the
sale of newspaper is just about 40% of its total cost of production. The remaining cost is
met by advertisements revenue which is about 40%, by revenue from waste sales and job
work which comes to about 5% and revenue from other sources such as the income from
properties and other investments of the newspaper establishment. These figures have been
derived from the statement furnished by one of the big newspapers. The case of all other
big newspapers may be more or less the same. The financial and other difficulties felt by
the newspaper presses in securing newsprint in recent years which have become an
international phenomenon are set out in the Final Report of the International Commission
for the Study of Communication Problems referred to above at p. 141 thus:
“Extremely serious on an international scale has been the effect of high costs of important
materials or facilities .... Paper is a material consumed in vast quantities whose price in
recent years has spiralled out of proportion to the general world-wide inflation.... As for
newsprint, its price on world markets rose from a datum figure of 100 in 1970 to 329 in
May 1977, and has continued to rise since. A sad by-product of this situation has been the
introduction of a covert form of censorship, as some governments limit the import of
newsprint, distribute it by official allocation schemes, and use these schemes to
discriminate against the opposition newspapers.”
85. In Chapter 4 of the same Report at p. 100 the International Commission has observed
thus:
“While newspapers which are commercial enterprises expect to sustain themselves by
sales and advertising, they are not always viable on this traditional basis. Capital and
profits from other media and from business in general are often injected into the
newspaper industry. In many cases, the financing, or at least the deficits are covered by
governments or political bodies. Assistance from the State has taken various forms,
including tax concessions not enjoyed by other industries, reduced postal and telephone
rates, guaranteed Government advertising, and subsidies to the price of newsprint.
Although the press is suspicious of Government involvement in its affairs, a desire to

preserve variety by keeping the weaker papers alive has led to consideration of various
schemes. Direct grants to papers in need are made in seven European nations.
Smaller newspapers and some parts of the ‘quality’ or ‘specialized’ press have
experienced difficulties from a contraction of operations and size, which has led to
limitations on the variety of information sources. This has induced many governments to
examine the possibility of subsidies to help keep newspapers alive or to establish new
ones, in monopoly circulation areas and to promote plurality and variety in general.”
86. 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.
87. In Sakal case this Court has observed thus:
“The effect of raising the selling price of newspaper has been considered by the Press
Commission. In para 164 of the Report it is observed:
“The selling price of a paper would naturally have an important effect on its circulation.
In this connection we have examined the effect of price- cuts adopted by two English
papers at Bombay on the circulation of those two papers as well as of the leading paper
which did not reduce its price. Prior to October 27, 1952, Times of India which had the
highest circulation at Bombay was being sold at Rs 0-2-6 while Free Press Journal and
National Standard which rank next in circulation were being sold for Rs 0-2-0. On October
27, 1952, Free Press Journal reduced its price to Re 0-1-0 and within a year bad claimed to
have doubled its circulation. On July 1, 1953, the National Standard was converted into a
Bombay edition of Indian Express with a selling price of Re 0-1-6. Within six months it
too claimed to have doubled its circulation.... During this period the Times of India
which did not reduce its selling price continued to retain its readership. Thus it would
appear that Free Press Journal and Indian Express by reducing their price have been able
to tap new readership which was latent in the market but which could not pay the higher
prices prevailing earlier.
***
Though the prices of newspapers appear to be on the low side it is a fact that even so
many people find it difficult to pay that small price. This is what has been pointed out by
the Press Commission in para 52 of its report. According to it the most common reason for
people in not purchasing newspapers is the cost of the newspaper and the inability of the
household to spare the necessary amount. This conclusion is based upon the evidence of a

very large number of individuals and representatives of Associations. We would, therefore,
be justified in relying upon it and holding that raising the price of newspaper even by a
small amount such as one n.p in order that its present size be maintained would adversely
affect its circulation.”
88. This is not a novel phenomenon. A stamp tax on newspapers came to be levied in
England in 1712. It virtually crippled the growth of the English press and thus became
unpopular. There was a lot of agitation against the said tax. But on its abolition in 1861,
the circulation of newspapers increased enormously. The following account found in the
Encyclopaedia Britannica (1962) Vol. 16 at p. 339 is quite instructive:
“Abolition of ‘Taxes on Knowledge’. — The development of the press was enormously
assisted by the gradual abolition of the ‘taxes on knowledge”, and also by the introduction
of a cheap postal system....
To Lord Lytton, the novelist and politician, and subsequently to Milner Gibson and
Richard Cobden, is chiefly due the credit of grappling with this question in Parliament to
secure first the reduction of the tax to a penny in 1836, and then its total abolition in
1855. The number of newspapers established from the early part of 1855, when the repeal
of the duty had become a certainty, and continuing in existence at the beginning of 1857,
amounted to 107; 26 were metropolitan and 81 provincial. The duties on paper itself were
finally abolished in 1861.
The abolition of the stamp taxes brought about such reductions in the prices of newspapers
that they speedily began to reach the many instead of the few. Some idea of the extent of
the tax on knowledge imposed in the early nineteenth century may be gathered from the
fact that the number of stamps issued in 1820 was nearly 29,400,000, and the incidence of
the advertisement tax, fixed at 3s. 6d. in 1804, made it impossible for the newspaper
owner to pass on the stamp tax to the advertiser. In 1828 the proprietors of the Times had
to pay the State more than £ 68,000 in stamp and advertisement taxes and paper duty. But
after the stamp tax in 1836 from four pence to one penny, the circulation of English
newspapers, based on the stamp returns, rose from 39,000,000 to 122,000,000 in 1854.”
89. The Second Press Commission in its Report (Vol. II) at p. 182-83 has stated that the
figures of circulation of newspapers complied by the Audit Bureau of Circulation (ABC)
for the period January to June 1981 indicated that the circulation of newspapers in the
period January to June 1981 was 1.9% lower than in the previous six months’ period. The
decline in the circulation of dailies was more in the case of every big newspapers with
circulation of one lakh and above than in the case of smaller papers. The Commission
said that the decline in circulation would appear to be attributable mainly to two factors
— increase in the retail price of newspapers in September- October 1980 and again in

April-May 1981 and that the increase in retail prices appeared to have become necessary
following continuing increase in newsprint prices in the last few years including levy of
import duty in 1981 and increase in wages and salaries cost on account of Palekar Award.
Of these factors which were responsible for increase in prices, the imposition of import
duty on newsprint was on account of State action. This aspect of the matter is not seriously
disputed by the Government .
90. The pattern of the law imposing customs duties and the manner in which it is operated,
to a certain extent exposes the citizens who are liable to pay customs duties to the vagaries
of executive discretion. While Parliament has imposed duties by enacting the Customs
Act, 1962 and the Customs Tariff Act, 1975, the Executive Government is given wide
power by Section 25 of the Customs Act, 1962 to grant exemptions 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, 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. No information is forthcoming from the Government as
to whether there was any material which justified the said additional levy. It is also not
clear why this futile exercise of levying an additional duty of 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. As mentioned elsewhere in the course of this judgment while levying tax
on an activity which is protected also by Article 19(1)(a) a greater degree of care should
be exhibited. While it is indisputable that the newspaper industry should also bear its due
share of the total burden of taxation along with the rest of the community when any tax is
specially imposed on newspaper industry, it should be capable of being justified as a
reasonable levy 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. If the
levy imposed by the statute itself fails, there would be no need to question the
notifications issued under Section 25 of the Customs Act, 1962. But having regard to the
prevailing legislative practice let us assume that in order to determine the actual levy we
should take into consideration not merely the rate of duty mentioned in the Customs Tariff
Act, 1975 but also any notification issued under Section 25 of the Customs Act, 1962
which is in force. Even then the reasons given by the Government to justify the total
customs duty of 15% levied from March 1, 1981 or 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. In the counter-affidavit filed on behalf of the Government , it is stated that
the allegation that the position of foreign exchange reserve is comfortable is irrelevant.
This shows that nobody in Government had ever taken into consideration the effect of the
import of newsprint on the foreign exchange reserve before issuing the notifications
levying 15% duty. Secondly no newspaper owner can import newsprint directly. Newsprint
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 newsprint. In the Finance Minister's speech there is “no reference to
the capacity of the newspaper industry to bear the levy of 15% duty. In the counter-
affidavit it is asserted that the extent of burden faced by the newspaper industry in India is
irrelevant to the levy of import duty on newsprint. This clearly shows again that the
Government had not also considered a vital aspect of the questions before withdrawing the
total exemption which was being enjoyed by newspaper industry till March 1, 1981 and
imposing 15% duty on newsprint.
91. The petitioners have alleged that the imposition of customs duty has compelled them
to reduce the extent of the area of the newspapers for advertisements which supply a
major part of the sinews of a newspaper and consequently has adversely affected their
revenue from advertisements . It is argued by them relying upon the ruling in Bennett
Coleman case that Article 19(1) (a) is infringed thereby. Our attention is drawn to the
following passages in Bennett Coleman case which are at pp. 777-78 and at p. 782: (SCC
pp. 810, 813, paras 34, 43)
Publication means dissemination and circulation. The press has to carry on its activity by
keeping in view the class of readers, the conditions of labour, price of material, availability
of advertisements , size of paper and the different kinds of news comments and views and
advertisements which are to be published and circulated. The law which lays excessive
and prohibitive burden which would restrict the circulation of a newspaper will not be
saved by Article 19(2). If the area of advertisement is restricted, price of paper goes up. If
the price goes up circulation will go down. This was held in Sakal Papers case to be the
direct consequence of curtailment of advertisement. The freedom of a newspaper to
publish any number of pages or to circulate it to any number of persons has been held by
this Court to be an integral part of the freedom of speech and expression. This freedom is
violated by placing restraints upon it or by placing restraints upon something which is
essential part of that freedom. A restraint on the number of pages, a restraint on circulation
and a restraint on advertisements would affect the fundamental rights under Article 19(1)
(a) on the aspects of propagation, publication and circulation.
The various provisions of the newsprint import policy have been examined to indicate as
to how the petitioners' fundamental rights have been infringed by the restrictions on page

limit, prohibition against new newspapers and new editions. The effect and consequence of
the impugned policy upon the newspapers is directly controlling the growth and circulation
of newspapers. The direct effect is the restriction upon circulation of newspapers. The
direct effect is upon growth of newspaper through pages. The direct effect is that
newspapers are deprived of their area of advertisement. The direct effect is that they are
exposed to financial loss. The direct effect is that freedom of speech and expression is
infringed.”
92. In meeting the above contention the Government relying on the decision in Hamdard
Dawakhana (Wakf), Lal Kuan, Delhi v . Union of IndiaAIR 1960 SC 554has pleaded
in defence of its action that the right to publish commercial advertisement is not part of
freedom of speech and expression. We have carefully considered the decision in Hamdard
Dawakhana case . The main plank of that decision was that the type of advertisement
dealt with there did not carry with it the protection of Article 19(1)(a). On examining the
history of the legislation, the surrounding circumstances and the scheme of the Act which
had been challenged there, namely the Drugs and Magic Remedies (Objectionable
Advertisements ) Act, 1954 (21 of 1954) the Court held that the object of that Act was the
prevention of self -medication and self -treatment by prohibiting instruments which may
be used to advocate the same or which tended to spread the evil. The Court relying on the
decision of the American Supreme Court in Lewis J . Valentine v , F.J Chrestensen 86 L
Ed 1262 observed at pp. 687-89 thus:
“It cannot be said that the right to publish and distribute commercial advertisements
advertising an individual's personal business is a part of freedom of speech guaranteed by
the Constitution . In Lewis J . v . Chrestensen it was held that the constitutional right of
free speech is not infringed by prohibiting the distribution in city streets of handbills
bearing on one side a protest against action taken by public officials and on the other
advertising matter. The object of affixing of the protest to the advertising circular was the
evasion of the prohibition of a city ordinance forbidding the distribution in the city streets
of commercial and business advertising matter. Mr Justice Roberts, delivering the
opinion of the Court said :
‘This Court has unequivocally held that the streets are proper places for the exercise of
the freedom of communicating information and disseminating opinion and that, though the
states and municipalities may appropriately regulate the privilege in the public interest,
they may not unduly burden or proscribe its employment in these public thoroughfares.
We are equally clear that the Constitution imposes no such restraint on Government as
respects purely commercial advertising.... If the respondent was attempting to use the
streets of New York by distributing commercial advertising, the prohibition of the Code
provisions was lawfully invoked against such conduct.”

It cannot be said therefore that every advertisement is a matter dealing with freedom of
speech nor can it be said that it is an expression of ideas. In every case one has to see
what is the nature of the advertisement and what activity falling under Article 19(1) it
seeks to further. The advertisements in the instant case relate to commerce or trade and
not to propagating of ideas; and advertising of prohibited drugs or commodities of which
the sale is not in the interest of the general public cannot be speech within the meaning of
freedom of speech and would not fall within Article 19(1)(a). The main purpose and true
intent and aim, object and scope of the Act is to prevent self -medication or self -treatment
and for that purpose advertisements commending certain drugs and medicines have been
prohibited . Can it be said that this is an abridgement of the petitioners’ right of free
speech. In our opinion it is not. Just as in Chamarbaugwalla case R.M.D
Chamarbaugwalla v . Union of India , 1957 SCR 930 it was said that activities
undertaken and carried on with a view to earning profits e.g the business of betting and
gambling will not be protected as falling within the guaranteed right of carrying on
business or trade so it cannot be said that an advertisement commending drugs and
substances as appropriate cure for certain diseases is an exercise of the right of freedom of
speech.”
93. In the above said case the Court was principally dealing with the right to advertise
prohibited drugs , to prevent self -medication and self -treatment . That was the main issue
in the case . It is no doubt true that some of the observations referred to above go beyond
the needs of the case and tend to affect the right to publish all commercial
advertisements . Such broad observations appear to have been made in the light of the
decision of the American Court in Lewis J . Valentine v . F.J Chrestensen . But it is
worthy of notice that the view expressed in this American case has not been fully
approved by the American Supreme Court itself in its subsequent decisions . We shall
refer only to two of them . In his concurring judgment in William B Cammarane v .
United States of America358 US 498Justice Douglas said :
“ Lewis J . Valentine v . F.J Chrestensen ... held that business of advertisements and
commercial matters did not enjoy the protection of the First Amendment , made
applicable to the States by the Fourteenth . The ruling was casual , almost offhand. And
it has not survived reflection .”
In Jeffrey Cole Bigelow v . Commonwealth of Virginia 421 US 809 the American

Supreme Court held that the holding in Lewis J . Valentine v . F.J. Chrestensen was
distinctly a limited one . In view of the foregoing , we feel that the observations made in
the Hamdard Dawakhana case are too broadly stated and the Government cannot draw
much support from it. We are of the view that all commercial advertisements cannot be
denied the protection of Article 19(1)(a) of the Constitution merely because they are
issued by businessmen . In any event the Government cannot derive any assistance from

this case to sustain the impugned notifications.
94. It was next urged on behalf of the Government that the levy of customs duty on
newsprint was not strictly a levy on newsprint as such since though customs duties were
levied with reference to goods, the taxable event was the import of goods within the
customs barrier and hence there could be no direct effect on the freedom of speech and
expression by virtue of the levy of customs duty on newsprint. Reliance was placed in
support of the above contention on the decision in In re Sea Customs Act33. That
decision was rendered on a reference made by the President under Article 143 of the
Constitution requesting this Court to record its opinion on the question whether the
Central Government could levy customs duty on goods imported by a State. The
contention of the majority of the States in that case was that the goods imported by them
being their property no tax by way of customs could be levied by reason of Article 289(1)
of the Constitution which exempted the property of a State from taxation by the Union.
This Court (majority 5, minority 4) held that in view of clause (1) of Article 289 which
was distinct from clause (2) thereof which provided that nothing in clause (1) of Article
289 would prevent Union from imposing or authorising the imposition of any tax to such
extent, if any, as Parliament might by law provide in respect of a trade or business of any
kind carried on by or on behalf of a State or any operations connected therewith or any
property used or occupied for the purposes of such trade or business or any income
accruing or arising in connection therewith and the other provisions of the Constitution
which enabled the Union to levy different kinds of taxes, customs duty levied on the
importation of goods was only a tax levied on international trade and property. The Court
further held that the immunity granted under Article 289(1) in favour of States had to be
restricted to taxes levied directly on property and even though customs duties had
reference to goods and commodities they were not taxes on property and hence not within
the exemption in Article 289(1). The above decision is again of very little assistance to
the Government since it cannot be denied that the levy of customs duty on newsprint
used in the production of newspapers is a restriction on the activity of publishing a news
paper and the levy of customs duties had a direct effect on that activity. There exists no
analogy between Article 289(1) and Article 19(1)(a) and (2) of the Constitution . Hence
the levy cannot be justified merely on the ground that it was not on any property of the
publishers of newspapers.
95. Our attention has been 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 our Constitution
for two reasons — (i) that the judgment of the Minister about the nature of writings
cannot be a true description of the writings, and (ii) that even if the writings are piffles it
cannot be a ground for imposing a duty which will hinder circulation of newspapers. In
this connection it is useful to refer to the decision of the American Supreme Court in
Robert E. Hannegan v . Esquire Inc.34 in which it was held that a publication could not

he deprived of the benefit of second class mailing rates accorded to publications
disseminating “information of a public character, or devoted literature, the sciences, arts, or
some special industry” because its contents might seem to the Postmaster- General by
reason of vulgarity or poor taste, not to contribute to the public good. Justice Douglas
observed in that decision thus:
“It is plain, as we have said , that the favourable second- class rates were granted to
periodicals meeting the requirements of the Fourth condition, so that the public good might
be served through a dissemination of the class of periodicals described. But that is a far cry
from assuming that Congress had any idea that each applicant for the second- class rate
must convince the Postmaster- General that his publication positively contributes to the
public good or public welfare. Under our system of Government there is an
accommodation for the widest varieties of tastes and ideas. What is good literature, what
has educational value, what is refined public information, what is good art, varies with
individuals as it does from one generation to another. There doubtless would be a
contrariety of views concerning Cervantes' Don Quixote, Shakespeare's Venus and Adonis,
or Zola's Nana. But a requirement that literature or art conform to some norm prescribed
by an official smacks of an ideology foreign to our system. The basic values implicit in the
requirements of the Fourth condition can be served only by uncensored distribution of
literature. From the multitude of competing offerings the public will pick and choose.
What seems to one to be trash may have for others fleeting or even enduring values.”
96. 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.
97. It is one thing to say that in view of considerations relevant to public finance which
require every citizen to contribute a reasonable amount to public exchequer customs duty
is 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.
98. To sum up, the counter-affidavit filed on behalf of the Government in these cases does
not show whether the Government ever considered the relevant matters . It says that the
extent of burden on the newspaper industry imposed by the impugned levy is irrelevant. It

says that the position that foreign exchange reserve is comfortable is not relevant. It does
not say that the increasing cost of imported newsprint was taken into consideration. The
Finance Minister says that the levy was imposed because he found “piffles” in some
newspapers. There is no reference to the effect of the implementation of the Palekar Award
on the newspaper industry. It does not also state what effect it will have on the members of
the public who read newspapers and how far it will reduce the circulation of newspapers.
99. It is argued on behalf of the Government that the effect of the impugned levy being
minimal, there is no need to consider the contentions urged by the petitioners. As observed
by Lord Morris of Borth-Y-Gest in Olivier v . Buttigieg1967 1 AC 115 a case from Malta,
that where fundamental rights and freedom of the individual are being considered, a court
should be cautious before accepting the view that some particular disregard of them is of
minimal account. The learned Lord observed in the above case that there was always the
likelihood of the violation being vastly widened and extended with impunity. He also
referred to the words of Portia — ‘Twill be recorded for a precedent, and many an error by
the same example will rush into the state”, and the following passage from the American
case i.e Thomas v . Coilings323 US 516.
“The restraint is not small when it is considered what was restrained. The right is a
national right , federally guaranteed. There is some modicum of freedom of thought,
speech and assembly which all citizens of the republic may exercise throughout its length
and breadth, which no state, nor all together, not the nation itself , can prohibit, restrain or
impede. If the restraint were smaller than it is, it is from petty tyrannies that large ones
take root and grow. This fact can be more plain than when they are imposed on the most
basic rights of all . Seedlings planted in that soil grow great and, growing, break down the
foundations of liberty.”
100. In the above decision the Privy Council cited with approval the view expressed by
this Court in Romesh Thappar case and the US Court in Martin v . City of
Struthers319 US 141. The Privy Council observed thus:
“A measure of interference with the free handling of the newspaper and its free circulation
was involved in the prohibition which the circular imposed. It was said in an Indian case
(Romesh Thappar v . State Of Madras):
... there can be no doubt that freedom of speech and expression includes freedom of
propagation of ideas, and that freedom is ensured by. the freedom of circulation.
‘Liberty of circulation is as essential to that freedom as the liberty of publication. Indeed,

without circulation the publication would be of little value.’ ”
Similar thoughts were expressed by Black, J ., in his judgment in Martin v . City of

Struthers when he said :

“Freedom to distribute information to every citizen wherever he desires to receive it is so
clearly vital to the preservation of a free society that, putting aside reasonable police and
health regulations of time and manner of distribution, it must be fully preserved.”
101. We respectfully endorse the high principle expounded by the Privy Council in the
above case . Moreover in the absence of a proper examination of all relevant matters , it is
not possible to hold that the effect of the levy is minimal. In fact the impact of the
impugned levy in these cases is not minimal at all . For example, The Tribune Trust has to
pay Rs 18.7 lakhs and The Statesman Ltd. has to pay Rs 35.9 lakhs by way of customs
duty on newsprint imported during 1983-84. Other big newspapers have also to pay large
sums by way of customs duty annually.
102. The question in the present cases is whether the tax has been shown to be so
burdensome as to warrant its being struck down? The petitioners have succeeded in
showing a fall in circulation but whether it is a direct consequence of the customs levy and
the increase in price has not been duly established. It may be due to various
circumstances. The fall in circulation may be due to the general rise in cost of living and
the reluctance of people to buy as many newspapers as they used to buy before. It may be
due to bad management. It may be due to change of editorial policy. It may be due to the
absence of certain feature writers. It may be due to other circumstances which it is not
possible to enumerate. Except the synchronising of time, there is nothing to indicate that
the slight fall in circulation is directly due to the levy of customs duty. One curious feature
of the case is that the petitioners have made no efforts to produce their balance sheets or
profit and loss statements to give us a true idea of how burdensome the customs levy
really is. On the other hand , the Government also has made no efforts to show the effect
of the impact of the levy on the newspaper industry as a whole. All these years, the very
exemption which they “granted was an indication that the levy was likely to have a serious
impact on the newspaper industry. Even now the exemption given to the small and medium
newspapers shows that there is bound to be an impact. No effort has been made on the
part of the Government to show the precise nature of the impact. On the other hand , the
case of the Government appears to be that such considerations are entirely irrelevant,
though the outstanding fact remains that for several years, the Government itself thought
that the newsprint deserved total exemption. On the material now available to us , while it
is not possible to come to the conclusion that the effect of the levy is indeed so
burdensome as to affect the freedom of the press, we are also not able to come to the
conclusion that it will not be burdensome. This is a matter which touches the freedom of
the press which is, as we said , the very soul of democracy. This is certainly not a question
which should be decided on the mere question of burden of proof. There are factors
indicating that the present levy is heavy is perhaps heavy enough to affect circulation. On
such a vital issue , we cannot merely say that the petitioners have not placed sufficient
material to establish the drop in circulation is directly linked to the increase of the levy
when, on the side of the Government , the entire exercise is thought to be irrelevant. Hence
there appears to be a good ground to direct the Central Government to reconsider the

matter afresh in the light of what has been said here.
VII. Is the classification of newspapers made for the purpose of exemption violative of
Article 14?.
103. We do not, however, see much substance in the contention of some of the petitioners
that the classification of the newspapers into small, medium and big newspapers for
purposes of levying customs duty is 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 duty
on big newspapers is to assist the small and medium newspapers in bringing down their
cost of production. Such papers do not command large advertisement revenue. Their area
of circulation is limited and majority of them are in Indian languages catering to rural
sector. We do not find anything sinister in the object nor can it be said that the
classification has no nexus with the object to be achieved. As observed by Mathew, J . in
the Bennett Coleman case it is the duty of the State to encourage education of the masses
through the medium of the press under Article 41 of the Constitution . We , therefore,
reject this contention.
VIII. Relief.
104. Now arises the question relating to the nature of relief that may be granted in these
petitions. These cases present a peculiar difficulty which arises out of the pattern of
legislation under consideration. If the impugned notifications are merely quashed, they
being notifications granting exemptions, the exemptions granted under them will cease.
Will such quashing revive the notification dated July 15, 1977 which was in force prior to
March 1, 1981 under which total exemption had been granted? We do not think so. The
impugned notification dated March 1, 1981 was issued in supersession of the notification
dated July 15, 1977 and thereby it achieved two objects — the notification dated July 15,
1977 came to be repealed and 10% ad valorem customs duty was imposed on newsprint.
Since the notification dated July 15, 1977 had been repealed by the Government of India
itself , it cannot be revived on the quashing of the notification of March 1, 1981. The
effect of such quashing of a subsequent notification on an earlier notification in whose
place the subsequent notification was issued has been considered by this Court in B.N
Tiwari v . Union of India1965 2 SCR 421. In that case the facts were these: In 1952, a
“carry forward” rule governing the Central Services was introduced whereby the unfilled
reserved vacancies of a particular year would be carried forward for one year only . In
1955 the above rule was substituted by another providing that the unfilled reserved
vacancies of a particular year would be carried forward for two years. In T. Devadasan v .
Union of india 1964 4 scr 680 the 1955 rule was declared unconstitutional. One of the
questions which arose for consideration in this case (Tiwari case ) was whether the 1952
rule had revived after the 1955 rule was struck down. This Court held that it could not
revive. The following are the observations of this Court on the above question:
“In the result the petition succeeds partially and the carry forward rule of 1952 still exists.

It is true that in Devadasan case the final order of this Court was in these terms:
In the result the petition succeeds partially and the carry forward rule as modified in 1955
is declared invalid.”
That however does not mean that this Court held that the 1952-rule must be deemed to
exist because this Court said that the carry forward rule as modified in 1955 was declared
invalid. The carry forward rule of 1952 was substituted by the carry forward rule of 1955.
On this substitution the carry forward rule of 1952 clearly ceased to exist because its place
was taken by the carry forward rule of 1955. Thus by promulgating the new carry forward
rule in 1955, the Government of India itself cancelled the carry forward rule of 1952.
When therefore this Court struck down the carry forward rule as modified in 1955 that did
not mean that the carry forward rule of 1952 which had already ceased to exist, because
the Government of India itself cancelled it and had substituted a modified rule in 1955 in
its place, could revive. We are therefore of opinion that after the judgment of this Court
in Devadasan case there is no carry forward rule at all , for the carry forward rule of 1955
was struck down by this Court while the carry forward rule of 1952 had ceased to exist
when the Government of India substituted the carry forward rule of 1955 in its place.”
105. In Firm A.T.B Mehtab Majid and Co. v . State of Madras1963 Supp 2 SCR 435, 446
also this Court has taken the view that once an old rule has been substituted by a new
rule, it ceases to exist and it does not get revived when the new rule is held invalid.
106. The rule in Mohd. Shaukat Hussain Khan v . State of A.P1975 1 SCR 429 is
inapplicable to these cases. In that case the subsequent law which modified the earlier
one and which was held to be void was one which according to the Court could not have
been passed at all by the State Legislature. In such a case the earlier law could be
deemed to have never been modified or repealed and would, therefore, continue to be in
force. It was strictly not a case of revival of an earlier law which had been repealed or
modified on the striking down of a later law which purported to modify or repeal the
earlier one . It was a case where the earlier law had not been either modified or repealed
effectively. The decision of this Court in Mulchand Odhavji v . Rajkot Borough
Municipality AIR 1970 SC 685 is also distinguishable. In that case the State Government
had been empowered by Section 3 of the Saurashtra Terminal Tax and Octroi
Ordinance (47 of 1949) to impose octroi duty in towns and cities specified in Schedule I
thereof and Section 4 authorised the Government to make rules for the imposition and
collection of octroi duty. These rules were to be in force until the City Municipalities made
their own rules. The rules framed by the Municipality concerned were held to be
inoperative. Then the question arose whether the rules of the Government continued to be
in force. The Court held : (SCC p. 56, para 8)—
“The government rules, however, were to cease to operate as the notification provided

‘from the date the said Municipality put into force their independent bye-laws’. It is clear
beyond doubt that the government rules would cease to apply from the time the
respondent Municipality brought into force its own bye- laws and rules under which it
could validly impose, levy and recover the octroi duty. The said notification did not
intend any hiatus when neither the government rules nor the municipal rules would be in
the field. Therefore, it is clear that if the bye-laws made by the respondent Municipality
could not be legally in force for some reason or the other, for instance, for not having been
validly made , the government rules would continue to operate as it cannot be said that
the Municipality had ‘put into force their independent bye-laws’. The trial court , as also
the District Court , were, therefore, perfectly right in holding that the respondent
Municipality could levy and collect octroi duty from the appellant firm under the
government rules. There was no question of the Government rules being revived, as in the
absence of valid rules of the respondent Municipality they continued to operate. The
submission of counsel in this behalf, therefore, cannot be sustained.”
107. In the cases before us we do not have rules made by two different authorities as in
Mulchand case and no intention on the part of the Central Government to keep alive the
exemption in the event of the subsequent notification being struck down is also
established. The decision of this Court in Koteswar Vittal Kamath v . K. Rangappa Baliga
& Co. 1969 1 SCC 255 does not also support the petitioners. In that case again the
question was whether a subsequent legislation which was passed by a Legislature without
competence would have the effect of reviving an earlier rule which it professed to
supersede. This case again belongs to the category of Mohd. Shaukat Hussain Khan case .
It may also be noticed that in Koteswar Vittal Kamath case the ruling in the case of Firm
A.T.B Mehtab Majid, and Co has been distinguished. The case of State Of Maharashtra v .
Central Provinces Manganese Ore Co. Ltd. 1977 1 SCC 643 is again distinguishable. In
this case the whole legislative process termed substitution was abortive, because , it did
not take effect for want of the assent of the Governor-General and the Court distinguished
that case from Tiwari case . We may also state that the legal effect on an earlier law when
the later law enacted in its place is declared invalid does not depend merely upon the use
of words like, ‘substitution’, or ‘supersession’. It depends upon the totality of
circumstances and the context in which they are used.
108. In the cases before us the competence of the Central Government to repeal or annul
or supersede the notification dated July 15, 1977 is not questioned. Hence its revival on
the impugned notifications being held to be void would not arise. The present cases are
governed by the rule laid down in Tiwari case .
109. Hence if the notification dated July 15, 1977 cannot revive on the quashing of the
impugned notifications, the result would be disastrous to the petitioners as they 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 1983-84. They would
straightaway be liable to pay the whole of customs duty and any other duty levied during
the current fiscal year also. Such a result cannot be allowed to ensue.
110. It is no doubt true that some of the petitioners have also questioned the validity of
the levy prescribed by the Customs Tariff Act, 1975 itself . But we are of the view that it
is unnecessary to quash it because of the pattern of the legislative provisions levying
customs duty which authorise the Government in appropriate cases either to reduce the
duty or to grant total exemption under Section 25 of the Customs Act, 1962 having regard
to the prevailing circumstances and to vary such concessions from time to time. The
governmental practice in the matter of customs duties has made the law imposing customs
virtually a hovering legislation. Parliament expects the Government to review the situation
in each case periodically and to decide what duty should be levied within the limit
prescribed by the Customs Tariff Act, 1975. Hence the validity of the provision in the
Customs Tariff Act, 1975 need not be examined now. Since it is established that the
Government has failed to discharge its statutory obligations in accordance with law while
issuing the impugned notifications issued under Section 25 of the Customs Act, 1962 on
and after March 1, 1981, the Government should be directed to re- examine the whole
issue relating to the extent of exemption that should be granted in respect of imports of
newsprint after taking into account all relevant considerations for the period subsequent
to March 1, 1981. We adopt this course since we do not also wish that the Government
should be deprived of the legitimate duty which the petitioners would have to pay on the
imported newsprint during the relevant period.
111. In the result, in view of the peculiar features of these cases and having regard to
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 pending before it, we make the following order in these cases:
“(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 newspaper business shall make available to the
Government all information necessary to decide the question.
(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 .
(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 insist upon payment of duty in accordance with the

impugned notifications. The concessions extended to medium and small newspapers may,
however, remain in force.
(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.
(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 accordingly in these cases. Parties shall ,
however, bear their own costs.”
112. The petitions are accordingly allowed.

Indian Express Newspapers (Bombay) Private Ltd. and Others v. Union of India and Others (1984, 1986 ITR SC 159 856)

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Indian Express Newspapers (Bombay) Private Ltd. and Others v. Union of India and Others (1984, 1986 ITR SC 159 856)

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1986 ITR SC 159 856 . 1985 SCC 1 641 . 1999 ELT 110 3 . 1985 COMPLJ 3 115 .

Indian Express Newspapers (Bombay) Private Ltd. And Others v. Union

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26. (emphasis supplied)

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39. (emphasis supplied)

Whether any tax on newsprint is unconstitutional?

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E.S Venkataramiah, J .— I. Pleadings

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Under-Secretary to the Government of India.”

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13. Section 2 of the Customs Tariff Act, 1975 reads:

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(a) to freedom of speech and expression:

(b ) to practise any profession, or to carry on any occupation, trade or business .

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

28. Article 10 of the European Convention on Human Rights reads:

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54. Communication needs in a democratic society should be met by the extension of

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The affirmative obligation of the Government to permit the import of newsprint by

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56. There was this further comment:

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57. Justice Reed added at pp. 1307 and 1308 thus:

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In Their Lordships' opinion the presumption that the Newspapers Registration

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