Indian Express Newspaper Pvt. Ltd. & Ors v. UOI Case

Bench

The bench in the case:

1. Justice E.S. Venkataramiah
2. Justice O. Chinnappa Reddy
3. Justice A.P. Sen

Parties in the case

Petitioner- Indian Express Newspaper (Bombay) Pvt. Ltd. & Ors

Respondent- Union of India

Introduction

“Freedom of the press is a precious privilege that no country can forego”  

Mahatma Gandhi

Do you know that the Constitution of India is the lengthiest written constitution in the world? If yes, then you might be aware that all things are covered in our constitution? Did you know that even our Press or what we call as Media and your occupation is also covered under this? Now, let’s discuss some of the facets of Freedom of Speech and Expression.

In India, Freedom of Press has been an inclusive part of Freedom of Speech and Expression guaranteed by Article 19 (1) (a). This Article has been one of the most disputed fundamental rights. We need this provision to provide a platform for exchanging ideas and voice of the common people. The media plays a vital role in providing information to the people about the evils of society and making them aware of the same. The Supreme Court has tried to establish this concept through various judgments. In Romesh Thapar v. State of Madras[1], the apex court conceded that Freedom of speech and press lay the foundation of all democratic organisations.

Another important facet of Freedom of Speech and Expression is practising any profession or carrying on any occupation, trade or business, guaranteed under Article 19 (1)(g). This right provided by our constitution aims at the welfare and well-being of the citizens and the nation. However, these provisions under Article 19 are subject to the reasonable restriction, as mentioned under Article 19 (2). The Supreme Court has upheld Article 19 (2) in many cases. In Laxmi Khandsari v. State of Uttar Pradesh[2] and Bombay Hawkers Union v. Bombay Municipal Corporation[3], the Apex Court held that reasonable restriction in the public interest is valid and not violative of Article 19 (6).

Facts of the Case

In this[4] case, the petitioners involved many people and authorities engaged in newspapers, including companies, employees, shareholders, and trusts. Initially, the Indian Tariff Act, 1934 levied customs duty on imported paper, while exempting import of white, grey or unglazed newspaper but in 1966, an import duty of Rs. 20 per MT was levied on import of newsprint. The Inquiry Committee examined Small Newspapers. In a report submitted by the Committee in 1965, it recommended total exemption of newsprint from custom duty Most countries in the world do not levy any duty on newspapers because it plays an essential role in keeping up the democracy. Considering the recommendation, citing Section 25 of the Customs Act, 1962, the Government of India abolished customs duty on newspapers in 1966.

However, after the Bangladesh war in 1971, the country had to face lots of financial turmoil which raised a situation to levy a regulatory duty of 21.2% to meet the difficult situation. This regulation was abolished on July 15, 1977, through a notification under Section 25 of the Customs Act. Further, this exemption was in operation till March 1, 1981. Meanwhile, the Central Government notified an increase in salary and wages to employees in the newsprint industry. Later, on March 1, 1981, a fresh notification was issued. Thus, with effect from March 1, 1981, Customs Act, 1962 took away the benefit of newspapers, from being excluded under the custom duty. In adherence to this notification, the newspaper publishers had to pay 10% customs duty on imported newsprints.

Henceforth, newsprint challenged the obligations put on them under the Customs Tax Act, 1975 and the additional duty under Finance Act, 1981 as altered by Customs Act, 1962.

Issues of the Case

There were seven issues in total which were raised in this case:

• Whether this case on Freedom of Press comes under the ambit of restriction provided under Article 19 (2)?
• Whether classification of newspapers for levying customs duty discriminatory under Article 14?
• Whether Article 19 (1) (a) and (g) of the Indian Constitution different from the right conferred by the first amendment of the American Constitution?
• Whether reasonable interference justified in the name of public interest?
• Whether it was absolute to strike down the notification under Section 25 of the Customs Act, 1962, contrary to the fundamental rights?
• Whether it is the duty of the State to educate people on the imposition of taxes?
• Whether the notification of Section 25 in Customs Act, 1962 issued under Article 13 (3) (a) contrary to fundamental rights be struck down?

Arguments of the Petitioner

The Petitioners, including the companies, employees, shareholders as well as the trusts contended the following points:

1. That the imposition of the duty on the newsprint would affect the price and circulation.
2. That the imposition of duty had an unfavourable effect on fundamental rights, casting a devastating impact on Freedom of Expression under Article 19 (1)(a) and Practicing any trade or profession under Article 19 (1)(g).
3. That there is justification for interfering with principal rights as the position of foreign trade was very stable at that time.
4. That the classification of newspapers into small, medium and big was ultra-vires the non-arbitrariness rule under Article 14 of the Indian Constitution.
5. That the imposition of duty has compelled them to reduce the advertisement area in their newspaper which covers a major part of the newspaper and has consequently affected their revenue.

Arguments of the Respondent

The Respondents, that is, the Government of India contended the following points:

1. That the cost borne by the newsprints and the situation of foreign exchange reserves were irrelevant contemplations.
2. That taxation was absolutely in the public interest in order to increase the revenue of the government, which is an obligation of all the citizens of a country.
3. That the custom duty levied on newsprint was not strictly levied on newsprints but in reference to goods and the taxation was within the custom barriers. So, this custom duty does not affect the freedom of speech and expression directly.
4. That the levied duty is minimal and need not be considered by the court.
5. That the right to publish commercial advertisements is not a part of Article 19 of the Indian Constitution. {Hamdard Dawakhana (Waqf) Lal Kuan, Delhi & Anr. v. Union of India[5]}

Provisions of the Statute Involved

1. Article 32 of the Constitution of India, 1950- This Article provides the right to individuals to move to the Supreme Court to seek justice when they feel that they have been deprived of their rights.
2. Article 226 of the Constitution of India, 1950- This Article empowers the High Court to issue direction, order, and writs for the enforcement of Part III of the constitution and other rights.
3. Article 239 (1), Article 240, Article 298 of the Constitution of India, 1950
4. Article 53 (1), 72, 77 of the Constitution of India, 1950
5. Delhi Development Act, 1957- Section 53 (3), Section 12 (4), Section 14, Section 41
6. Delhi Municipal Corporation Act, 1957- Section 343, Section 344, Section 481
7. Specific Relief Act, 1963- Section 5, Section 6, Section 9
8. Government Grants Act, 1895- Section 3
9. Doctrine of Ultra Vires- This doctrine means ‘beyond the power’. It implies that the absence of power or capacity of any authority to do any act. The fact that the act is legal or not is immaterial. This doctrine is attracted by an act when a person acts in excess of legislative power. This doctrine has two sub principles and this doctrine is a method to control delegated legislation by the judiciary. The two principles are Substantive Ultra Vires and Procedural Ultra Vires.
10. Doctrine of Promissory Estoppel- The doctrine of promissory estoppel is a principle in which one party, either by his words or conduct makes to another a clear and unequivocal promise, intending to create legal relations, with prior acknowledgement that the other party will act upon that promise and such promise would be binding on the first party.

Judgment of the Case

The Apex Court held that the Government is at liberty to impose taxes affecting the publication of newspapers. The newspaper is no less than an industry, so it must be subjected to taxes like other businesses. On the issue of division of the newspaper, the Court held that such division into small, medium and big could be sanctioned only if it is based on economic considerations, having a reasonable nexus with the objective of taxation and free from arbitrariness. The power of levying tax must not infringe Freedom of Speech and Expression, and the flexibility must be within reasonable limits. These limits are embarked under Article 19 (2) of the Indian Constitution, which is solely based on ‘public interest’.

The Court further ordered that the Government of India shall, within six months reconsider the entire levy of import duty payable by the petitioners on newsprint with effect from March 1, 1981. If on reconsideration, the Government decided any modification, it shall take necessary steps. Until then, the petitioners shall pay only Rs. 550 per MT as custom duty on imported newsprints.

While concluding the judgment, the Supreme Court indicated two basic rules:

1. The newspapers have as much right to be benefitted from the Government as other industries, so that they do not hesitate in contributing a reasonable amount of money through taxes to the Government.
2. The burden of tax must not be excessive.

Thus, the Hon’ble Court laid down that there was lack of evidence on the part of the petitioners as well as the respondents and neither of the parties were able to sufficiently prove the excessive nature of the burden. The Court also said that there should not be a strict ‘burden of proof’ in applying fundamental rights. Further, the Court ordered to evaluate the taxation policy if it constituted an excessive burden on newspapers.

Analysis of the Judgment

This is one of the landmark judgments given by the Hon’ble Supreme Court of India on the issue of Freedom of Press. In this case, the Court has significantly dealt with the issues and has pronounced the judgment partially in favour of the petitioner and partially favouring the respondent. The Court has differentiated between general taxes or duties paid by the newspapers to form a contribution similar to other individuals and businesses. The Court has also laid down the essential difference between interference with Freedom of Speech and Expression and instances where it must be exercised. The Court had effectively given the Government to reconsider its taxation policies on the newspapers and had mentioned that if the problem persists, they will not hesitate to entertain the issue again through a writ. Thus, this was a very well thought-out judgment that has overlooked the boundaries and ruled in an equal proportion, relying on the principles of justice and upholding the law.

Conclusion

“Freedom of press is not just important to democracy, it is democracy.”

 Walter Cronkite

We have often read that there are four pillars of our democracy, so the fourth pillar is the Press. Our lawmakers have given us an extraordinary right, and that is Right to Press. Media is a crucial part in any country and has always played a significant role in establishing democracy. Nowadays, it is very difficult to live without this fourth pillar because the day of any individual starts with Print media, social media or electronic media, and probably ends on it. It is a point of consideration that if individual taxes are imposed on this press, its supply would eventually be afflicted. The Government should also take care of the Rights of the Press by not overburdening them with heavy taxes. Thus, the Freedom of Press has to be protected. However it should be subject to reasonable restrictions because not only the Press but also the Government is an important part of this democracy and both are interdependent.

[1] 1950 AIR 124.

[2] 1981 AIR 873.

[3] 1985 AIR 1206.

[4] 1986 AIR 515.

[5] 1960 AIR 554.