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PETITIONER: INDIAN EXPRESS NEWSPAPERS (BOMBAY) PRIVATE LTD. & ORS. ETC.E

       Vs.

RESPONDENT: UNION OF INDIA & ORS. ETC. ETC.

DATE OF JUDGMENT06/12/1984

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) REDDY, O. CHINNAPPA (J) SEN, A.P. (J)

CITATION:  1986 AIR  515            1985 SCR  (2) 287  1985 SCC  (1) 641        1984 SCALE  (2)853  CITATOR INFO :  R          1989 SC 190  (14)

ACT:      Constitution of  India 1950 Article 19(I )(a)-  Freedom of speech  and expresion- Whether includes Freedom of press- Restrictions  other  than  those  In  Article  19(2)-Whether reasonable-Interference in  the  name  of  Public  Interest- Whether justified. D      Roll of  Press and Newspapers-Duty of Court to held the balance  even   and  to  strike  down  any  unconstitutional invasion of press.      Fundamental rights  under  Article  19(l)(a)  and  (g)- Whether different from right conferred by First Amendment to American Constitution.       Article 13(3)(a)-Notification under section 25 Customs Act 1962-Contrary to fundamental rights-Whether to be struck down.       Article  14-Classification of  newspapers for  levying customs duty-Whether discriminatory.       Article  4I-Duty of  State to  encourage education  of masses through media of press-Necessity of. F      Entry 87  and 93  List  1.  Seventh  Schedule-Newspaper Industry-Levy of tax-Competency of Parliament to enact laws- Scrutiny by  Courts when  arises -Tax transgressing into the field of  freedom of  speech and expression and stifles that freedom-Whether unconstitutional.      Article 32-Validity  of tax-Duty  of  Court-Not  to  be burdensome-Newspaper Industry  not to  be singled out-Custom Duty on newspaper-Whether tax on knowledge-People’s right to know-Imposition of tax-Government to be more cautious.      Interpretation of statutes:      Constitution   of    India   1950   Article   19(1)(a)- Interpretation of-American 288 cases-Whether sole  guide-He1p in  understanding  the  basic principles of freedom of speech and expression.      Statutes Taxing  Newsprint-Tests for  determining vires of-Different   from   other   taxing   statutes-Grounds   of challenge.       Customs Act. 1962 Section 25-Power to grant exemption- Whether legislative power-Whether notification a Subordinate piece of  legislation Whether  questionable on the ground of unreasonableness-Power of  Government discretionary  but not

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unrestricted.       Customs  Act 1962 Section 25-Notification Substitution of by  another- Whether  former notification would revive ff the latter is held invalid.      Customs Tariff  Act 1975  Section 2 and Second Schedule Heading 48.01/21  -Sub-heading 2-Newsprint-Import  duty  and auxiliary levy at a flat rate- Validity of.

HEADNOTE:       Under  the Indian Tariff Act 1934, there was a levy of customs duty on imported paper. Exemption, however, had been granted for import of white, grey or unglazed newsprint from the levy  of any  kind of  customs duty in excess of 1.5% ad valorem but  subsequently a  specific import  duty of Rs. 50 per MT  was levied  on  newsprint  imports  upto  1966.  The Inquiry Committee  on Small Newspapers examined the question of customs  duty on  newsprint and  submitted its  report in 1965 recommending  total exemption of newsprint from customs duty. Pursuant  to the  said recommendation,  the Government abolished customs  duty on  newsprint altogether in the year 1966. In  1971, a  regulatory duty  of 2-1/2%  was levied on newsprint imports. This 2-1/2% regulatory duty was abolished and was  converted into 5% auxiliary duty by the Finance Act of 1973.  On the  Customs Tariff Act 1975 coming into force, the Indian  Tariff Act  1934 was  repealed. Under  section 2 read with  Heading No. 48.01/21 of the First Schedule to the 197S Act, a levy of basic customs duty of 40% ad valorem was imposed on  newsprint. However, the 5% auxiliary duty levied from April  1, 1973  continued to  be in operation which was also totally  abolished in  July 1977.  The total  exemption from customs  duty on newsprint continued till March 1, 1981 when  notification   dated  July  IS,  1977  granting  total exemption from  customs duty  superseded by  the issue  of a fresh notification  under which publishers of newspapers had to pay 10% ad valorem customs duty on imported newsprint. By another notification  issued at  about  the  same  time  the auxiliary duty  imposed by  the Finance Act of 1981 above 5% ad valorem was exempted in the case of newsprint. The result was that  a total  duty of 15% ad valorem came to be imposed on newsprint for the year 1981-82, which led to the increase in the  price of  newspaper resulting in fall in circulation of news  papers. In the first set of writ petitions this 15% levy was challenged.       During  the pendency  of these  writ  petitions  while Customs Tariff  Act, 1975 was amended levying 40% ad valorem plus Rs.  1000 pet  MT as  customs duty  on  newsprint,  the auxiliary duty  payable on all goods subject to customs duty was increased  to 50%  ad valorem. But by notification dated February 82. 289 1982 issued  under section 25(2) of the Customs Act 1962 the notification A  dated March  1, 1981  was superseded and Rs. 550 per  tonne was  imposed as customs duty on newsprint and auxiliary duty  was fixed  at Rs.  275 per tonne. In all Rs. 825 per tonne of newspaper had to be paid as duty.       Under  the newsprint  policy of  the Government  there were three  sources of  supply of  newsprint-(i)  high  seas sales. (ii)  sales from  the buffer  stock built  up by  the State Trading Corporation which includes imported newsprint, and  (iii)   newsprint  manufactured   in  India.   Imported newsprint is an important component of the total quantity of newsprint utilised by any newspaper establishment.       The  validity of  the imposition  of  import  duty  on

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newsprint imported  from abroad  under  section  12  of  the Customs Act  1962 (Act  52 of  1962) read with section 2 and Heading No.  48.01/21  Sub-heading  No.  (2)  in  the  First Schedule to  the Customs  Tariff Act,  1975 (Act 51 of 1975) and the  levy of  auxiliary duty under the Finance Act, 1981 on newsprint  as  modified  by  notifications  issued  under section 25 of the Customs Act 1962 with effect from March 1, 1981 was challenged in the writ petitions.       In  the writ  petitions it  was contended (I) that the imposition of  the import  duty has  the  direct  effect  of crippling the freedom of speech and expression guaranteed by the Constitution  as it  led to the increase in the price of newspapers and  the inevitable  consequence of  reduction of their circulation;  (2) that  with the  growth of population and literacy  in the  country every newspaper is expected to register  an   automatic  growth  of  at  least  5%  in  its circulation every  year but this growth is directly ’impeded by the  increase in  the price  of newspapers;  (3) that the method adopted  by the  Customs Act,  1962 and  the  Customs Tariff Act,  1975 in determining the rate of import duty has exposed   E    the   newspaper   publishers   to   Executive interference; (4)  that there  was no need to impose customs duty on newsprint which had enjoyed total exemption from its payment till March 1, 1981, as the foreign exchange position was quite  comfortable. Under the scheme in force, the State Trading  Corporation  of  India  sells  newsprint  to  small newspapers with  a circulation of less than 15000 at a price which  does  not  include  any  .  import  duty.  to  medium newspapers with  a circulation between 15000 and 50,000 at a price which includes 5% ad valorem duty (now Rs. 275 per MT) and to  big   newspapers having a Circulation of over 50,000 at a  price which  includes the  levy of 15% ad valorem duty (now Rs.  825 per  MT). This  classification of  newspapers’ into big,  medium and  small newspapers is irrational as the purchases on high seas are sometimes effected by a publisher owning  many   newspapers  which  may  belong  to  different classes; (5)  that the  enormous increase  in the  price  of newsprint subsequent  to March  1, 1981 and the inflationary economic conditions  which led  to higher cost of production have made  it impossible  for the  industry to bear the duty any longer.  Since the  capacity to  bear  the  duty  is  an essential element  in determining  the reasonableness of the levy, the  continuance of  the levy  is violative of Article 19(1)(a) and  Article  19(1)(g)  of  the  Constitution.  The imposition of  the levy on large newspapers by the Executive is done  with a  view to  stifling circulation of newspapers which are highly critical of the performance of the adminis- 290 tration. The classification of newspapers into small, medium and big  for purposes of levy of import duty is violative of Article 14  of the  Constitution; and  (6) that the power of the Government  to levy  taxes of  any kind on the newspaper establishment rings  the death-knell of the freedom of press and would be totally against the spirit of the Constitution.      The  Union   of  India  contested  the  writ  petitions alleging (I)  that the Government had levied the duty in the public interest  to augment  the revenue  of the Government. When exemption is given from the customs duty, the Executive has to satisfy itself that there is some other corresponding public interest  justifying such  exemption and  that in the absence of  any such  public interest,  there is no power to exempt but  to carry out the mandate of Parliament which has fixed the  rate of duty by the Customs Tariff Act, 1975; (2) that  the  classification  of  newspapers  for  purposes  of granting exemption  is done    the  public  interest  having

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regard to relevant considerations, and that the levy was not Malay fide  Since every  section of  the society has to bear its due  share of  the economic burden of the state, levy of customs  duty  on  newsprint  cannot  be  considered  to  be violative of  Article 19(1) (a). The plea that the burden of taxation is excessive is an irrelevant factor to the levy of import duty on newsprint; (3) that the fact that the foreign exchange  position   was  comfortable  was  no  bar  to  the imposition of import duty; and (4) since the duty imposed is an indirect  tax which  would be  borne by  the purchaser of newspaper, the petitioner could not feel aggrieved by it.      Allowing the Writ Petitions, ^      HELD: 1. The expression ’freedom of press’ has not been used in  Article 19  of the Constitution but, as declared by this Court,  it is  included in  Article 19  (1)  (a)  which guarantees freedom  of speech  and  expression.  Freedom  of press means  freedom from  interference from authority which would have  the effect  of interference with the content and circulation of newspapers. [310C; 35I]      2. There  could not  be any  kind of restriction on the freedom of  speech and expression other than those mentioned in Article  19 (2)  and it  is clear that there could not be any interference  with that  freedom in  the name  of public interest,  Even   when  clause   (2)  of   Article  19   was subsequently  substituted   under  the  Constitution  (First Amendment) Act,  1951 by  a new  clause which  permitted the imposition of  reasonable restrictions  on  the  freedom  of speech and  expression in  the interests  of sovereignty and integrity of  India, these  urity  of  the  State,  friendly relations with  foreign States,  public  order,  decency  or morality in  relation to  contempt of  court, defamation  or incitement to  an offence.  Parliament  did  not  choose  to include a  clause  enabling  the  imposition  of  reasonable restrictions in the public interest. [3l2B-C]      3.  Freedom  of  press  is  the  heart  of  social  and political. intercourse The press has now assumed the role of the public  educator making  formal and non-formal education possible in  a large  scale particularly  in the  developing world,  where   television  and   other  kinds   of   modern communication are not 291 still available  for all sections of society. The purpose of the press  is to  advance the  public interest by publishing facts and  opinions without  which a  democratic  electorate cannot  make   responsible   judgments.   Newspapers   being purveyors of  news and  views having  a  bearing  on  public administration very  often carry material which would not be palatable to  governments and other authorities. With a view to checking  malpractices which  interfere with free flow of information, democratic  constitutions all  over  the  world have made  provisions guaranteeing the freedom of speech and expression laying  down the  limits of interference with it. [316B.D; H]      It is  the primary  duty of  all the national courts to uphold  the   said  freedom   and  invalidate  all  laws  or administrative actions  which interfere with it, contrary to the constitutional mandate. [317A]      Brij Bhushan  & Anr. v The State of Delhi [1950] S C.R. 605, Bennett  Coleman &  Co. &  ors v. Union of India & ors. [1973] 2  S.C.R. 757, Romesh Thappar v. The State of Madras; 1950 S.C.R. 594, Express Newspapers (Private) Ltd. & Anr. v. The Union  of lndia & ors. [1959] S.C R. 12 and Sakal Papers (P Ltd.  & Ors  v. The  Union of  India [19621 3 S.C.R. 842, followed.

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    1 Annals  of Congress  (1789-96) p. 141; D.R. Mankekar: The Press  under Pressure  (1973) p  25; Article  19 of  the Universal Declaration  of Human  Rights [1948: Article 19 of the International  Covenant on  Civil and  Political  Rights 1965; Article 10 of the European Convention on Human Rights: First Amendment  to the Constitution of the United States of America; Article  by Frank  C. Newman  and  Karel  Vasak  on ’Civil and political Rights’ in the International Dimensions of Human  Rights (Edited  by Karel Vasak) Vo. 1 pp. 155-156; "Many Voices  one World"  a publication of UNESCO containing the Final  Report of  the International  Commission for  the Study  of   Communication  Problems   Part  V  dealing  with ’Communication Tomorrow’  p. 265; Article entitled ’Toward a General Theory  of the First Amendment’ by Thomas 1. Emerson (The Yale  Law Journal  Vol. 72 .877 at p. 906; Second Press Commission Report (Vol.l. pp. 3435). referred to.      5. (i)  Excluding small newspaper establishments having circulation of  less than  about 10,000  copies a  day,  all other   bigger    newspaper    establishments    have    the characteristics of  a large  industry The  Government has to provide many  services to  them resulting  in a big drain on the financial  resources of  the  State  as  many  of  these services  are   heavily  subsidized.   Naturally  such   big newspaper organisations  have to  contribute their due share to the  public exchequer  and have to bear the common fiscal burden like all others. 1324C; E]      (ii) While  examining the  constitutionality of  a  law said  to   be  contravening   Article  19  (1)  (a)  of  the Constitution, the  decisions of  the Supreme  Court  of  the United States  of America  cannot be  solely relied upon for guidance  but   could  be   taken  into   consideration  for understanding the  basic principles of freedom of speech and expressiyn and  the need  for that  freedom in  a democratic country. 1324F-G]      (iii) The  pattern of Article 19 (1) (a) and of Article 19 (1)  (g) of the Indian Constitution is different from the pattern of  the First Amendment to the American Constitution which is almost absolute in its terms. The rights guaranteed under Article  19 (1)  (a) and  Article 19  (1) (g)  of  the Constitution 292 are to  be read  alongwith clauses (2) and (6) of Article 19 which  carve   out  areas   A  in  respect  of  which  valid legislation can be made. [324H; 325A]      6. Newspaper  industry has  not been  granted exemption from taxation  in express  terms. Entry  92 of List I of the Seventh Schedule  in the Constitution empowers Parliament to make laws  levying taxes  on sale  or purchase of newspapers and on  advertisements published  therein. The power to levy customs duties  on goods  imported into  the country is also entrusted to Parliament by Entry 83 in List I of the Seventh Schedule to the Constitution. [325B; 326G]      7. The  First Amendment  to  the  Constitution  of  the United States  of America  is almost  in absolute terms and, therefore, no  law abridging the freedom of the press can be made  by   the  Congress.   Yet  the  American  Courts  have recognised  the   power  of  the  State  to  levy  taxes  on newspapers establishments,  subject to  judicial  review  by courts  by  the  application  of  the  due  process  of  law principle. [328E-F]      8. The  police power,  taxation and  eminent domain are all forms  of social  control which  are essential for peace and good  government. In  India the  power to  levy  tax  on persons carrying  on the  business or  publishing newspapers has got  to be  recognised as  it is  inherent in  the  very

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concept of  government.  But  the  exercise  of  such  power should. however,  be subject to scrutiny by courts. Entry 92 of List  I of  the  Seventh  Schedule  to  the  Constitution expressly suggests the existence of such power. [328G; 329C]      9. It  is not necessary for the press to be subservient to the  Government. As long as this Court sits’ newspapermen need not  have the  fear of their freedom being curtailed by unconstitutional means.  It is  not acceptable  that  merely because the  Government has  the power  to levy  taxes,  the freedom of  press would be totally lost. The Court is always there to  hold the  balance even  and  to  strike  down  any unconstitutional invasion of that freedom. [338G; 339F]      10. Newspaper  industry enjoys  two of  the fundamental rights,  namely,   the  freedom  of  speech  and  expression guaranteed under  Article 19  (1) (a)  and  the  freedom  to engage in  any profession,  occupation, trade.  industry  or business guaranteed  under Article  19 (1)  (g), While there can  be   no  tax  on  the  right  to  exercise  freedom  of expression,  tax  is  leviable  on  profession,  occupation, trade, business  and industry.  Hence  tax  is  leviable  on newspaper industry.  But when such tax transgresses into the field of  freedom of expression and stifles that freedom, it becomes unconstitutional. As long as it is within reasonable limits and does not impede freedom of expression it will not be contravening  the limitations  of  Article  19  (2).  The delicate task  of determining  when it crosses from the area of profession,  occupation, trade, business or industry into the area  of freedom  of expression and interferes with that freedom is entrusted to the courts. [339G-H; 340A-B]      11. While  levying a  tax on newspaper industry it must be kept  in mind  that it  should not  be an  over-burden on newspapers  which   constitute  the  Fourth  Estate  of  the country. Nor  should it  single out  newspaper industry  for harsh treatment.  Imposition of  a tax like the customs duty on  newsprint  is  an  imposition  on  knowledge  and  would virtually amount to a burden imposed on 293 a man for being literate and for being conscious of his duty as a  citizen to  inform himself about the would around him. ’The public  interest in  freedom A  of discussion (of which the freedom  of the  press is  one aspect)  stems  from  the requirement that  members of  a democratic society should be sufficiently informed  that they may influence intelligently the decisions which may affect ’themselves’. [341H; 342A-B]      12.  Freedom   of  expression  has  four  broad  social purposes to serve: (i) it helps an individual to attain self 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 is the people’s right to know. Freedom of  speech  and  expression  should,  therefore,  receive  a generous  support   from  all   those  who  believe  in  the participation of  people in  the administration.  It  is  on account of  this special  interest which  society has in the freedom of  speech and  expression that  the approach of the Government should  be more  cautious while  levying taxes on matters concerning  newspaper industry  than  while  levying taxes on other matters. [342C-E]      13. In  view of  the intimate  connection of  newsprint with the freedom of the press, the tests for determining the vires of  a statute  taxing newsprint have, therefore, to be

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different from  the tests  usually adopted  for testing  the vires of  other taxing  statutes. In  the case  of  ordinary taxing statutes, the laws may be questioned only if they are either  openly   confiscatory  or  a  colourable  device  to confiscate. On  the other  hand. in  the case  of a  tax  on newsprint, it  may be  sufficient to  show  a  distinct  and noticeable burdensomeness, clearly and directly attributable to the tax. [342G-H]      Constituent Assembly Debates. Vol. IX pp. 1l75-1180 dt. September 9,1949:  Corpus Juris  Secundum (Vol. 16) p. 1132; American Jurisprudence  2d (Vol.  16) p. 662; Article on the First Amendment  by Thomas  1. Emerson (The Yale Law journal Vol. 72  at p.  941); Second Press Commission Report (Vol 1) p.  35;   Essay  No.   84  by  Alexander  Hamilton  in  ’The Federalist; Alice Lee Grosjean supervisor of Public Accounts for the  State of  Louisiana v.  American Press  Company 297 U.S. 233:  80 L. ed. 660; Robert Murdock Jr. v. Commonwealth of Pennsylvania  (City of  Jeannette). 319  U S 105: 87 Law. ed. 1292  and Attorney  General & Anr. v. Antigua Times Ltd. [1975] 3 All E. R. 81, referred to       Bennett  Coleman & Co. & ors. v. Union of India & ors, [19731 2  S.C.R. 757 and Sakal Papers (P) Ltd. & Ors. v. The Union of India [1962] 3 S.C.R. 842, distinguished. G      Attorney General v. rimes Newspapers [1973] 3 All. E.R. 54, followed.      14, In  the instant  cases, assuming  that the power to grant exemption under section 25 of the Customs Act, 1962 is a  legislative  power  and  a  notification  issued  by  the Government there under amounts to a piece of 294 subordinate  legislation,  even  then  the  notification  is liable to  be  questioned  on  the  ground  that  it  is  an unreasonable one. [34SC-D]      15. A  piece of  subordinate legislation does not carry the same  degree of  immunity which  is enjoyed by a statute passed by  a competent  legislature Subordinate  legislation may be  questioned  on  any  of  grounds  on  which  plenary legislation is  questioned.  In  addition  it  may  also  be questioned on  the ground  that it  does not  conform to the statute under which it is made. It may further be questioned on the  ground that  it is  contrary to  some other statute. That  is  because  subordinate  legislation  must  yield  to plenary legislation. It may also be questioned on the Ground that it  is unreasonable,  unreasonable not  in the sense of not being reasonable, but in the sense that it is manifestly arbitrary.                                               [345H ;346A-B]      16. In  India arbitrariness  is not  a separate  ground since it  will come  within the embargo or Article 14 of the Constitution.  In  India  any  enquiry  into  the  vires  of delegated legislation  must be  confined to  the  ground  on which plenary  legislation may  be questioned  to the ground that it is contrary to other statutory provisions or that it is so  arbitrary  that  it  could  not  be  said  to  be  in conformity with the statute or that it offends Article 14 of the  Constitution.   Subordinate   legislation   cannot   be questioned on  the ground  of  violation  of  principles  of natural  justice  on  which  administrative  action  may  be questioned.                                                     [347E-G]      17. A  distinction must be made between delegation of a legislative function  in the  case of  which the question of reasonableness cannot be enquired into and the investment by statute to  exercise particular  discretionary power. In the latter case the question may be considered on all grounds on

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which administrative action may be questioned, such as, non- application  of   mind,  taking   irrelevant  matters   into consideration,  failure   to  take   relevant  matters  into consideration, etc. etc. On the facts and circumstances of a case, a  subordinate  legislation  may  be  struck  down  as arbitrary or  contrary to  statute if  it fails to take into account very  vital  facts  which  either  expressly  or  by necessary  implication   are  required   to  be  taken  into consideration by the statute or, say, the Constitution. This can only  be done  on the ground that it does not conform to the statutory  or constitutional  requirements  or  that  it offends  Article   14  or   Article  19   (1)  (a)   of  the Constitution. It  cannot, no  doubt, be  done merely  on the ground that  it is  not reasonable  or that it has not taken into  account   relevant  circumstances   which  the   Court considers relevant. [ 348A-D]       8.  In cases  where the power vested in the Government is a  power which  has got  lo be  exercised in  the  public interest, as  it happens  to be  here, the Court may require the Government to exercise that power in a reasonable way in accordance with  the spirit  of the  Constitution. The  fact that a  notification issued  under section  25  (1)  of  the Customs Act,  1962 is  required to be laid before Parliament under section  159 thereof  does not  make  any  substantial difference as  regards the  jurisdiction  of  the  court  to pronounce on its validity. [348E-F]      19. Section 25 of the Customs Act, 1962 under which the notifications are  issued confers  a power  on  the  Central Government coupled with a duty to examine the whole issue in the light  of public  interest.  It  provides  that  if  the Central Government  is satisfied that it is necessary in the public interest so to 295 do it  may exempt  generally either absolutely or subject to such conditions,  A goods of any description, from the whole or any  part of  the  customs  duty  leviable  thereon.  The Central Government may if it is satisfied that in the public interest so  to do  exempt from  the payment  of duty  by  a special  order  in  each  case  under  circumstances  of  an exceptional nature  to be  stated in such order any goods on which duty  is leviable  The power exercisable under section 25 of the Customs Act, 1962 is no doubt discretionary but it is not unrestricted.                                                     [350C-E]      20. Any  notification issued under a statute also being a  ’law’   as  defined   under  Article   13(3)(a)  of   the Constitution is  liable to  be struck down if it is contrary of any  of the  fundamental rights guaranteed under Part III of the Constitution. [350H; 351A]      Article  entitled   ’Judicial  Control   of   Delegated Legislation: The  Test  of  Reasonableness’  by  Prof.  Alan Wharam, 36  Modern Law  Review 611 at pp 622 23; H.W.R Wade: Administrative  Law   (5th  Edn.)   pp.  747-748;  Municipal Corporation of  Delhi v.  Birla Cotton  Spinning and Weaving Mills Delhi  & Anr.  [1968] 3  S.C.R 251;  Kruse v.  Johnson [1898] 2  Q.B.D. 91;  Mixnam  Properties  Ltd.  v.  Chertsey U.D.C. [1964]  I Q.B. 214; The Tulsipur Sugar Co. Ltd v. The Notified Area  Committee Tulsipur  [1980] 2S.C.R.1111;Ramesh Chandra   Kachardas Porwal &  Ors. v. State of Maharashtra & ors. etc..  [1981] 2  S C.R.  866; Bates v. Lord Hailsham of St. Marylebone  & ors.  [1972] 1  W.L.R. 1373 and Associated Provincial Picture  Houses Ltd.  v.  Wednesbury  Corporation [1948] 1 K.B. 223, referred to.      Narinder  Chand   Hem  Raj   &  ors.  v.  Lt.  Governor Administrator Union Territory. Himachal Pradesh & Ors.[1972]

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1 S.C.R. 940, distinguished E      State of Madras v. V.G. Rao [1952] S.C.R. 597 and Breen v. Amalgamated  Engineering Union  [1971] 2 Q.B. 175, relied upon.      21. If any duty is levied on newsprint by Government it necessarily has  to  be  passed  on  to  the  purchasers  of newspapers, unless  the industry  is able  to absorb  it. In order to  pass on  the duty  to the  consumer the  price  of newspapers has  to be  increased.  Such  increase  naturally affects the circulation of newspapers adversely. [352G]      22. The  pattern of the law imposing customs duties and the manner in which it is operated, to a certain exposes the citizens who  are  liable  to  pay  customs  duties  to  the vagaries  of  executive  discretion.  While  Parliament  has imposed duties  by enacting  the Customs  Act, 1962  and the Customs Tariff  Act, 1962  the Executive Government is given wide power  by section  25 of the Customs Act, 1962 to grant exemption from  the levy  of Customs  Duty, it is ordinarily assumed that  while such  power to grant exemptions is given to the  Government it  will consider  all  relevant  aspects governing the  question whether  exemption should be granted or not. In the instant case, in 1975 when the Customs Tariff Act,  1975  was  enacted,  40%  ad  valorem  was  levied  on newsprint even  though it  had been exempted from payment of such  duty.   If  the  exemption  had  not  been  continued, newspaper publishers  had to pay 40% ad valorem customs duty on the coming into force of the Customs Tariff Act, 296 1975 Then  again in  1982 by  the Finance Act, 1982 an extra levy of  Rs. 1000  per tonne  was imposed in addition to the original 40% ad valorem duty even though under the exemption notification the  basic duty  had been  fixed at  10% of the value  of  the  imported  newsprint.  Neither  any  material justifying the  said additional  levy was,  produced by  the Government nor was it made clear why this futile exercise of levying an  additional duty  of Rs.  1000 per tonne was done when under  the notification issued under. section 25 of the Customs Act, 1962 on March 1, 1981, which was in force then, customs duty  on newsprint  above 10%  ad valorem  had  been exempted.  While   levying  tax  on  an  activity  which  is protected also   Article  l9(1)(a) a  greater degree of care should he  exhibited. While  it  is  indisputable  that  the newspaper industry  should also  hear its  due share  of the total burden of taxation alongwith the rest of the community when any  tax is specially imposed on newspaper industry, it should he capable of being justified as a reasonable levy in court when  its validity  is challenged.  In the  absence of sufficient material.  the levy of 40 plus Rs. 1000 per tonne would become vulnerable to attack. [355E-H;356A-C]       23. The reasons given by the Government to justify the total customs duty of 15% levied from March 1, 1981 or total Rs. 825  per tonne as it is currently being levied appear to be inadequate. In the Finance Minister’s speech delivered on the floor  of the  Lok Sabha in 1981, the first reason given for the  levy of  15% duty  was that  it was  intended ’  to promote  a  measure  of  restraint  in  the  consumption  of imported newsprint  and  thus  help  in  conserving  foreign exchange." This  ground appears  to be  not tenable  for two reasons.  Nobody   in  Government   had  ever   taken   into consideration the  effect of  the import of newsprint on the foreign exchange  reserve before  issuing  the  notification levying 15  duty. Secondly,  no newspaper  owner can  import newsprint directly.  News print  import is canalised through the  State  Trading  Corporation.  If  excessive  import  of newsprint adversely  affects foreign  exchange reserve,  the

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State Trading Corporation may reduce the import of newsprint and  allocate  lesser  quantity  of  imported  newsprint  to newspaper establishments.  There is.  however,  no  need  to impose import  duty with  a view to curbing excessive import of news  print. It  is clear  that the  Government  had  not considered  vital   aspects  before  Withdrawing  the  total exemption which was being enjoyed by newspaper industry till March 1,  1981 and  industry 15  duty on newsprint. [356D-H; 357A-B]      24. Attention  was particularly  drawn to the statement of the Finance Minister that one of the considerations which prevailed upon  the Government  to levy the customs duty was that the  newspapers contained  ’piffles’. A  ’piffle’ means foolish nonsense.  It appears  that one  of the  reasons for levying the  duty was  that certain  writings in  newspapers appeared to  the Minister  as ’piffles’.  Such action is not permissible under the Constitution. [361H; 362A]      25. Matters  concerning the  intellect  and  ethics  do undergo fluctuations from era to era. The world of mind is a changing one.  It is  not static.  The streams of literature and of  taste and  judgment in that sphere are not stagnant. They have  a quality  of freshness  and vigour. They keep on changing from  time to  time, from  place to  place and from community to community. [868A] 297        26.   It  is  one  thing  to  say  that  in  view  of considerations relevant  to A  public finance  which require every citizen  to contribute  a reasonable  amount to public exchequer customs duty is leviable even on newsprint used by newspaper industry  and an  entirely different  thing to say that the  levy is  imposed because  the newspapers generally contain ’’piffles’’.  While the  former may  be valid if the circulation of newspapers is not affected prejudicially, the latter is  impermissible under  the Constitution as the levy is being made on a consideration which is wholly outside the constitutional limitations.  The Government  cannot arrogate to itself  the power  to prejudge  the nature of contents of newspapers even  before they  are printed.  Imposition of  a restriction  of   the  above   kind  virtually   amounts  to conferring on  the  Government  the  power  to  precensor  a newspaper. The  above reason  given by  the Minister to levy the customs duty is wholly irrelevant. [363B-D]       27  The argument  on behalf of the Government that the effect of  the impugned  levy i  minimal cannot be accepted. [365C]       28. There are factors indicating that the present levy is heavy  and is perhaps heavy enough to affect circulation. There appears  to be  a good  ground to  direct the  Central Government to reconsider the matter afresh. [366C ;D]       Final  Report of  the International Commission for the Study  of   Communication  Problems   pp.   100   add   141; Encyclopaedia Britannica  [1962] Vol.  16;  p.  339;  Second Press Commission Report(Vol. 11)pp. 182-183; Bennett Coleman JUDGMENT: 757; Sakal Papers(P) Ltd & Ors. v. The Union of India [1962] 3 S.C.R.  842; William  B. Cammarane  v.  United  States  of America 358  US 498;  3 Led  2d 462;  Jeffery  Sole  Bigelow Commonwealth of  Virginia 421  us 809: L ed 2d60O at 610 and Robert E.  Hannegan v.  Esquire Inc.  327 U.S. 147: 90 L ed. 586, referred to.       Hamdard  Dawakhana (WakS)  Lal Kuan  Delhi &  Anr.  v. Union of  India  &  Ors.,  [1960]  2  S.C.R.  671;  Lews  J. Yelentine v. F. J. Chrestensen 86 Law ed. 1292 and in re Sea Customs Act [1964] 3 S.C.R 787, distinguished.       Romesh  Thapper v.  The State  of Madras [1950] S.C.R.

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564; Honourable  Dr. Paul  Borg olivier & Anr. v. Honourable Dr. Anton  Buttigieg  [1967]  A.C.  115  (P.C.);  Thomas  v. Collins [1944]  323 U.S.  516 Martin  v. City  of  Struthers 11943] 319 U.S. 141, followed.       29.  The classification  of the newspapers into small, medium and  big newspapers  for purposes  of levying customs duty is not violative of Article 14 of the Constitution. The object of  exempting small  newspapers from  the payment  of customs duty  and levying 5% ad valorem (now Rs. 275 per MT) on medium  newspapers while levying full customs duly on big newspapers is  to assist  the small and medium newspapers in bringing down  their cost  of production. Such papers do not command  large   advertisement  revenue.   Their   area   of circulation is  limited and  majority of  them are in Indian languages  catering   to  rural  sector.  There  is  nothing sinister in the 298 object nor  can it  be said  that the  classification has no nexus with the object to be achieved. [366F-G]      Bennett Coleman  & Co.  & Ors  v. Union of India & Ors. [1973] 2 S.C.R. 757. referred to.      30. Quashing  of the  impugned notification dated March 1, 1981,  which had repealed the notification dated July 15, 1977 under  which total exemption had been granted would not revive the  notification dated  July IS,  1977. Once  an old rule has  been substituted  by a new rule, it cases to exist and it  does not  get revived  when the  new  rule  is  held invalid. Since  the competence  of the Central Government to repealer annul  or supersede  the notification dated July 15 1977  is   not  questioned,  its  revival  on  the  impugned notifications being  held to  be void  would not  arise and, therefore, on  the quashing of the impugned notification the petitioners would have to pay customs duty of 40% ad valorem from March  1, 1981  to February  28 1982 and 40% ad valorem plus Rs  1000 per  MT from March 1, 1982 onwards In addition to it they would also be liable to pay auxiliary duty of 30% ad valorem during the fiscal year 1982-83 and auxiliary duty of 50%  ad valorem  during the  fiscal year  1983-8 i.  They would straightaway  be liable  lo pay  the whole  of customs duty and  any other  duty levied  during the  current fiscal year also.  Such a  result cannot  be allowed  to ensue. The challenge to  the validity  of the  levy prescribed  by  the customs Tariffs  Act,  1975  itself  cannot  be  allowed  to succeed. [370F-H]      31.  The   Government  has   failed  to  discharge  its statutory   obligations    While   issuing    the   impugned notifications. the  Government is  directed to reexamine the whole  issue   after  taking   into  account   all  relevant considerations for  the period  subsequent to March 1, 1981. The Government  cannot be  deprived of  the legitimate  duty payable on imported newsprint. [371D-E]      32. Having  regard to  the peculiar  features of  these cases and  Article 32  of the  Constitution which imposes an obligation on  this Court  to enforce the fundamental rights and Article 142 of the Constitution which enables this Court in the exercise of its jurisdiction to make such order as is necessary for  doing complete justice in any cause or matter the following order was made: [371D-E]      1. The  Government of India shall reconsider within six months the  entire  question  of  levy  of  import  duty  or auxiliary duty  payable by  the petitioners  and  others  on newsprint used  for printing  newspapers,  periodicals  etc. with effect  from March  1,1981. The  petitioners and others who are  engaged in newspapers business shall make available to the  Government all  information necessary  to decide the

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question. [37G-H]      2. If  on such  reconsideration the  Government decides that there should be any modification in the levy of customs duty or  auxiliary duty  with effect  from March  1,1981, it shall take necessary steps to implement its decision. [372A]      3. Until  such redetermination  of the liability of the petitioners and others is made, the Government shall recover only Rs.  550 per  MT on  imported newsprint towards customs duty and auxiliary duty and shall not 299 insist upon  payment of duty in accordance wish the impugned notifications. The  concessions extended to medium and small newspapers may, however, A remain in force. [372C]      4. If, after such redetermination, it is found that any of the  petitioners is  liable to  pay any deficit amount by way of  duty, such  deficit amount  shall be  paid  by  such petitioner within  four months  from the  date  on  which  a notice of  demand  is  served  on  such  petitioner  by  the concerned authority. Any bank guarantee or security given by the petitioners  shall be  available for  recovery  of  such deficit amounts. [372D]      5. If, after such redetermination, it is found that any of the  petitioners is  entitled to  any refund, such refund shall be  made by the Government within four months from the date of such redetermination.       6. A writ shall issue to the respondents. [372F] C      B.N. Tiwari  v. Union  of India  & ors, [1965] 2 S.C.R. 421, T.  Devadasan v.  Union of India & Anr. [1964] 4 S.C.R, 680 and  Firm A.T.B. Mehtab Majid & Co. v. State of Madras & Anr. [1963] Supp 2 S.C.R, 435 at 446. relied on.      Mohd. Shaukat  Hussain Khan  v. State of Andhra Pradesh [975] I  S.C.R. 429,  Shri Mulchand  Odhavji. Rajkot Borough Municipality A.I.R. 1970 S.C. 685, Koteswar Vittal Kamath v. K. Rangappa  Baliga & Co. [1969] 3 S.C.R. 40 and The case of State of Maharashtra etc. v. The Central Provinces Manganese Ors Co. Ltd.. [1977] I S.C.R. 1000, distinguished.

&       ORIGINAL.  JURISDICTION: Writ  Petition NOS.  2656-60. 2935-40, 2941-46,  2947-52, 3402, 3467, 3595, 3600-03, 3608, 3632, 3653,  3661, 3821,  3890-93, 4590-93,.  4613-15, 5222, 5576, 5600  02, 5726 27,  7410. 8459-62, 8825, 8944 of 1981, 1325 of 1982, 470-72 of 1984. T C. Nos. 23 of 1983 and 23 of 1984.                             AND             Writ Petitions Nos. 3114-17 of 1981                             WITH             Writ Petitions Nos. 3393-93 of 1981                             WITH               Writ Petitions No. 3853 of 1981                             WITH             Writ Petitions Nos. 6446-47 of 1181       (Under Article 32 of the Constitutions of India)       A.K.  Sen, A.B.  Divan, F.S.  Nariman, K.K. Venugopal, B.R. Agarwala,  Miss Vijay  Lakshmi Menon,  A.K Ganguli P.H. Parekh, C.S.  Vaidyanalingam, D.N. Mishra, Pravin Kumar, KR. Nambiar, M.C.  Dhingra, Miss Sieta Vaidyalingam, P.C. Kapur, Pramod Dayal, CM 300 Nayar, S.S,  Munjral, KK  .Jain, S.K.  Gupta, A.l).  Sangar, Ranjan Mukherjee,  Sudip Sarkar,  P.K.  Ganguli,  Miss  Indu Malhotra,  PR.   Seetharaman  and   V.   Shekhar   for   the petitioners.

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    K. Parasaran,  Attorney General of India, Krishna Iyer, P.A. Francis, A. Subba Rao, Dalveer Bhandari and R.N. Poddar for the respondents.      F.S. .Nariman,  S. Dholakia,  Soli J. Sorabjee, Anil B. Divan J.B. Dadachandji S. Sukumaran, D.N. Mishra, KP. Dhanda pani, R.C.  Bhatia, P.C.  Kapur, A.N.  Haksar, O.C.. Mathur, Miss Meera  Mathur,  Dr.  Roxna  Swamy,  Arun  Jetley,  P.H. Parekh,  Miss   Divya  Bhalla   and  Pinaki  Misra  for  the intervener      The Judgment of the Court was delivered by      VENKATARAMIAH, J.                              I                          Pleadings      The majority  of Petitioners  in these  petitions filed under Article  32 of the Constitution are certain companies, their share  holders and  their  employees  engaged  in  the business of  editing, printing  and  publishing  newspapers, periodicals, magazines  etc Some of them are trusts or other kinds  of  establishments  carrying  on  the  same  kind  of business. They  consume in  the course  of their  5 activity large quantities  of newsprint  and it is stated that 60% of the expenditure  involved in.  the production of a newspaper is utilised  for buying  newsprint, a  substantial  part  of which is  import ed  from abroad.  They challenge  in  these petitions the  validity of  the imposition of import duty on newsprint imported  from abroad  under  section  12  of  the Customs Act,  1962 (Act  52 of 1962) read with section 2 and Heading No.  48/01/21  Sub-heading  No.  (2)  in  the  First Schedule to  the Customs  Tariff Act,  1975 (Act 51 of 1975) and the  levy of  auxiliary duty under the Finance Act, 1981 on newsprint  as  modified  by  notifications  issued  under section 25  of the  Customs Act, 1962 with effect from March 1, 1981.       The  first set of writ petitions challenging the above levy was  filed in May, 1981. At that time under the Customs Act, 1962  read with  the Customs  Tariff Act, 1975, customs duty of  40’% ad valorem was payable on newsprint. Under the Finance Act,  1981 an  auxiliary duty  of 30% ad valorem was payable  in   addition  to   the  customs   duty.   But   by notifications issued  under section  25 of  the Customs Act, 1962, the customs duty had been reduced to 10% 301 ad valorem  and auxiliary  duty had  been reduced  to 5%  ad valorem  in   the  case   of  newsprint  used  for  printing newspapers, books and A periodicals.      During  the  pendency  of  these  petitions  while  the Customs Tariff  Act, 1975 was amended levying 40% ad valorem plus Rs.  1,000 per  MT as  customs duty  on newsprint,  the auxiliary duty  payable on all goods subject to customs duty was  increased   to  50%   ad  valorem.  But  by  reason  of notifications issued  under section  25 of  the Customs Act, 1962 customs  duty at  a flat  rate of  Rs. 550  per MT  and auxiliary duty  of Rs.  275 per  MT are  now being levied on newsprint i.e. in all Rs. 825 per MT is now being levied.      The petitioners  inter alia contend that the imposition of the  import duty  has the  direct effect of crippling the freedom  of   speech  and   expression  guaranteed   by  the Constitution as  it has  led to the increase in the price of newspapers and  the inevitable  consequence of  reduction of their circulation.  It is urged by them that with the growth of population and literacy in the country every newspaper is expected to  register an  automatic growth of at least 5% in its circulation  every year  but  this  growth  is  directly impeded by  the increase  in the  price of newspapers. It is further urged  that the  method adopted  by the Customs Act,

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1962 and  the Customs  Tariff Act,  1975 in  determining the rate of  import duty has exposed the newspaper publishers to the Executive  interference. The  petitioners  contend  that there was  no need  to impose  customs duty  on news-  print which had  enjoyed total  exemption from  its  payment  till March 1,  1981, as  the foreign  exchange position was quite comfortable. Under  the scheme  in force,  the State Trading Corporation of  India sells  newsprint to  small  newspapers with a circulation of less than 15,000 at a price which does not include  any import  duty, to  medium newspapers  with a circulation between  15,000 and  50,000  at  a  price  which includes 5%  ad valorem duty (now Rs. 275 per MT) and to big newspapers having  a circulation  of over  50,000 at a price which includes  the levy of 15% ad valorem duty (now Rs. 825 per MT).  It is stated that the classification of newspapers into big,  medium and  small newspapers is irrational as the purchases on high seas are sometimes effected by a publisher owning  many   newspapers  which  may  belong  to  different classes. The petitioners state that the enormous increase in the price  of newsprint  subsequent to March 1, 1981 and the inflationary economic  conditions which  have led  to higher cost of  production have made it impossible for the industry to bear  the duty any longer. Since the capacity to bear the duty  is   an   essential   element   in   determining   the reasonableness 302 Of the  levy, it  is urged, that the continuance of the levy is violative of Article 19(1)(a) and Article 19(1)(g) of the Constitution. It  is suggested  that the  imposition of  the levy on  large newspapers  by the  Executive is  done with a view to  stifling circulation  of  news.  papers  which  are highly critical  of the  performance of  the administration. Incidentally  the   petitioners  have   contended  that  the classification of  newspapers into small, medium and big for purposes of  levy of  import duty is violative of Article 14 of the  Constitution. The petitioners have appended to their petitions a number of annexures in support of their pleas.       On  behalf of the Union Government a counter-affidavit is filed.  The deponent  of the  counter-affidavit is  R. S. Sidhu, Under  Secretary to the Government of India, Ministry of Finance,  Department of  Revenue. In  paragraph 5  of the counter-affidavit it  is claimed  that  the  Government  had levied the  duty in  the  public  interest  to  augment  the revenue of  the Government. It is stated that when exemption is given from the customs duty, the Executive has to satisfy itself  that   there  is  some  other  corresponding  public interest justifying  such exemption  and that in the absence of any  such public  interest, the Executive has Do power to exempt  and  that  it  has  to  carry  out  the  mandate  of Parliament which  has fixed  the rate of duty by the Customs Tariff Act, 1975. It is also claimed that the classification of newspapers  for purposes of granting exemption is done in the  public   interest  having   regard  to   the   relevant considerations. It  is denied that the levy suffers from any malafides. It  is pleaded  that since  every section  of the society has  to bear its due share of the economic burden of the State,  levy of  customs duty  on  newsprint  cannot  be considered to  be violative  of Article  19 (1)  (a) of  the Constitution. But  regarding the  plea of  P the petitioners that the  burden  of  taxation  is  excessive,  the  counter affidavit states  that the  said fact  is irrelevant  to the levy of import duty on newsprint. In reply to the allegation of the  petitioners that  there  was  no  valid  reason  for imposing the duty as the foreign exchange position was quite comfortable, the  Union Government  has stated that the fact

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that the foreign exchange position was quite comfortable was no bar  to the  imposition of  import duty.  It  is  further pleaded that since the duty imposed is an indirect tax which would  be   borne  by   the  purchaser   of  newspaper,  the petitioners cannot feel aggrieved by it.                              II       A  Brief History  of  the  levy  of  Customs  Duty  on Newsprint            In order to appreciate the various contentions of the parties 303 it is  necessary to  set out briefly the history of the levy of customs A duty on newsprint in India.      Even though  originally under  the Indian  Tariff  Act, 1934, there  was a  levy of  customs duty on imported paper, exemption had  been granted  for import  of white,  grey  or unglazed newsprint from the levy of any kind of customs duty in excess  of 1.57  per cent  ad valorem  but subsequently a specific import  duty of  Rs. 50 per MT used to be levied on newsprint imports upto 1966. The question of levy of customs duty on  newsprint was  examined by the Inquiry Committee on Small Newspapers.  In its  Report  submitted  in  1965  that Committee recommended  total  exemption  of  newsprint  from customs duty  because in 90x/Q of the countries in the world no such  levy was  being imposed because newspapers played a vital role  in  a  democracy.  On  the  basis  of  the  said recommendation, the  Government of  India abolished  customs duty on newsprint altogether in the year 1966 in exercise of its power  under section  25 of  the Customs  Act, 1962. The price of  newsprint was Rs. 725 per MT during the year 1965- 66 but there was a sudden spurt in its price in 1966-67 when it rose  to Rs.  1155 per  MT.  During  the  period  1966-71 although almost all imported goods suffered basic regulatory and auxiliary  customs duty,  there  was  no  such  levy  on newsprint in  spite of  severe foreign exchange crisis which arose on the devaluation of the Indian Rupee in 1966. But on account of  the financial difficulties which the country had to face  as a  consequence of  the Bangladesh war in 1971, a regulatory duty of 2 1.2% was levied on newsprint imports to meet the difficult situation by the Finance Act of 1972. The price of  newsprint in the year 1971-72 was Rs. 1134 per MT. The above 2 1/2% ad valorem regulatory duty was abolished by the Finance  Act  of  1973  P  and  was  converted  into  5% auxiliary duty  by the  said Act. This levy of 5% was on all goods including  newsprint imported  into India. On April 1, 1974 under  the Import  Control order issued under section 3 of the  Imports and  Exports Control  Act, 1947,  import  of newsprint by  private parties  was banned and its import was canalised through the State Trading Corporation of India. In 1975, the  Customs Tariff Act, 1975 came into force. By this Act the  Indian Tariff Act, 1934 was repealed. Under section 2 read  with Heading  No. 48.01/ 21 of the First Schedule to the Customs  Tariff Act,  1975, a levy of basic customs duty of 40%  ad valorem  was imposed on newsprint. But in view of the exemption  granted in  the year  1966 which  remained in force, the imposition made by 304 the Customs  Tariff Act,  1975 did not come into force. Only 5% auxiliary  duty which  was  levied  from  April  1,  1973 continued to  be in  operation. In  the budget  proposals of July, 1977,  the 5% auxiliary duty was reduced to 2 1/2% but it was  totally abolished  by a  notification  issued  under section 25  of  the  Customs  Act  on  July  15,  1977.  The notification dated July IS, 1977 read as follows:                        "NOTIFICATION

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                         CUSTOMS               GSR No. In exercise of the powers conferred by      sub section  (1) of section 25 of the Customs Act, 1962      (52 of 1962) and in supersession of the notification of      the Government  of lndia  in the  Department of Revenue      and Banking  No. 72-Customs  dated the  18th June 1977,      the Central  Government, being  satisfied  that  it  is      necessary in  the public  interest  so  to  do,  hereby      exempts newsprint,  falling under  sub heading  (2)  of      Heading No.  48.01 21  of the  First  Schedule  to  the      Customs Tariff  Act, 1975  (51 of  1975), when imported      into India,  from the whole of that portion of the duty      of customs  leviable thereon, which is specified in the      said First Schedule.                                                        sd/--                                             (Joseph Dominic)                Under. Secretary to the Government of India."     The  price of  newsprint during the year 1975-76 was Rs. 3676 per  MT. The  total exemption from customs duty imposed on newsprint  was in  force  till  March  1,  1981.  In  the meanwhile the Central Government notified increased salaries and wages  to k  employees of  newspaper  establishments  in December, 1980  on  the  recommendations  contained  in  the Palekar Award. On March 1, 1981, the notification dated July 15, 1977  issued under  section 25  (1) of  the Customs Act, 1962  granting   total  exemption   from  customs  duty  was superseded by the issue of a fresh notification which stated that the  Central Government  had  in  the  public  interest exempted newsprint  imported  into  India  for  printing  of newspapers, books  and periodicals  from  so  much  of  that portion of  the duty  of customs  leviable thereon as was in excess of  10   per cent  ad valorem. The effect of the said notification was  that publishers  of newspapers  had to pay ten per  cent ad valorem customs duty on imported newsprint. By another  notification  issued  at  about  the  same  time auxiliary 305 duty imposed  by the Finance Act of 1981 above 5 per cent ad valorem was  exempted in  the case  of  newsprint.  The  net result .  was that  a total  duty of  IS per cent ad valorem came to be imposed on newsprint for the year 1981-82.      The explanation  given by  the Government in support of the above notification was as follows:      "Customs duty on newsprint:              Originally, import of newsprint did not attract      any customs duty. The Government of India abolished the      -. customs  duty on  newsprint after the devaluation of      the  rupee   on  the   recommendation  of  the  Inquiry      Committee on Small Newspapers (1965). The Committee had      mentioned in  its report  that 80%  of the newsprint in      international trade  was free from customs duty and had      recommended  complete  abolition  of  customs  duty  on      newsprint. However,  during the  Bangladesh  crisis  in      1971, a2.1/2% ad valorem regulatory duty was imposed on      newsprint imports.  Subsequently, this was abolished on      April 1,1973  and in  its place  a 5% auxiliary customs      duty on  newsprint imports  was proposed  in the  Union      Budget Proposals for 1973-74. While no customs duty was      levied on newsprint because of the exemption granted by      Customs  Notification  No.  235/F.No.527/1/76-CUS  (TU)      dated August  2,1976 of  the Department  of Revenue and      Banking, 5%  auxiliary duty  was continued to be levied      on  imported  newsprint  till  July  15,1977  when  the      Ministry of  Finance,  Department  of  Revenue  by  its      Notification No.  148/F.No. Bud  (2) Cus/77  dated July

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    l5,1977 exempted  newsprint from  the whole  of duty of      customs.  Prior   to  this  the  Ministry  of  Finance,      Department of Revenue vide its Customs Notification No.      72/F. No.  Bud.  (2)  Cus/77  dated  June  18,1977  had      reduced the auxiliary duty to 2 1/2%.                In the Budget proposals for the current year,      the Minister  of Finance has proposed a customs duty of      15% on  newsprint imports  which has  become  effective      from March  1,1981 because  of the Customs Notification      No. 24/F. No. Bud (Cus)/81 dated March 1,1981. This 15%      customs  duty   constitutes  10%   basic  duty  and  5%      auxiliary duty." 306              The price of imported newsprint in March 1,1981      was A  Rs. 4,560 per MT. The extract from the speech of      the Finance  Minister in support of the imposition of a      total 15%  of duty  (10% basic  duty and  5%  auxiliary      duty) on newsprint is given below;                  "The levy  of 15  per cent  customs duty on      newsprint has  understandably attracted  a good deal of      comment both  within the  House and  outside. As it has      been explained  in the  Budget  speech,  this  levy  is      intended to  promote a  measure  of  restraint  in  the      consumption of  imported newsprint  and  thus  help  in      conserving  foreign  exchange.  In  the  light  of  the      observations made  by the Hon. Members in the course of      the General  Debate on  the Budget  I had  assured  the      House that  I  would  try  to  work  out  a  scheme  of      providing relief  to small  and medium newspapers about      which Members had voiced their special concern. We have      now worked out the modalities of a scheme for affording      relief to  small  and  medium  newspapers.  Under  this      Scheme,  the   State  Trading  Corporation  would  sell      imported newsprint to small newspapers at a price which      would not  ! include  any amount  relatable  to  import      duty. Medium  newspapers will  get their newsprint at a      price which,  would  include  an  amount  relatable  to      import duty  ’of S  per cent ad valorem. Big newspapers      would, however, pay a price which will reflect the full      duty burden  of 15  per cent  ad valorem.  There  is  a      definition of  small, medium  and big newspapers in the      Press Council.  At the moment the present definition is      that these  which have  a circulation of 15,000 or less      are classified  as small,  those with  a circulation of      more than 15,000 but less than 50,000 are classified as      medium and  those with a circulation of over 50,000 are      called big  newspapers. Therefore, the small newspapers      with a  circulation of 15,000 and less will not pay any      customs duty  those with  a circulation  between 15,000      and 50,000 will pay customs duty of 5 per cent and with      a circulation  of over  50,000 will  pay 15  per  cent.      Suitable financial  arrangements will  be worked out as      between’ Government  and the  State Trading Corporation      to enable  the STC to give effect to these concessions.      As Hon.  Members are  aware,  the    categorisation  of      newspapers as small, medium and big in 307              terms of circulation is already well understood      in the A industry and is being followed by the Ministry      of  Information   and  Broadcasting   for  purposes  of      determining initial  allocation of  newsprint  and  for      setting the rates of growth of consumption of newsprint      by various  newspapers from  year to  year.  The  State      Trading Corporation  will, for  purposes of the present      scheme, follow,  the same  categorisation of newspapers

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    into small, medium and big. These arrangements will. in      effect, provide  a relief  of about  Rs. 5.86 crores to      small and medium newspapers. "       The  relevant provisions  of the laws imposing customs duty  and  auxiliary  duty  on  newsprint  which  arise  for consideration are these:       Section 12 of the Customs Act, 1962 reads:                 "12. Dutiable goods.-(1) Except as otherwise      provided n  in this  Act, or any other law for the time      being in  force, duties  of customs  shall be levied at      such rates as may be specified under the Customs Tariff      Act, 1975  (5l of  1975), or any other law for the time      being in force, on goods imported into or exported from      India.          (2).......... ,          Section 2 of the Customs Tariff Act, 1975 reads:                  "2. Duties  specified in  the Schedules  to      levied.-The rates  at which  duties of customs shall be      levied under  the Customs  Act, 1962,  are specified in      the First and Second Schedules."       The  relevant part of Chapter 48 of the First Schedule to the  Customs Tariff  Act, 1975  which deals  with  import tariff read in 1981 thus: "Heading  Sub-heading  No.      Rate  of  duty Duration  No.      and description    Standard Preferential when           of article               Areas       rates of                                                duty are                                              protective 308 -------------------------------------------------------   (1)        (2)             (3)      (4)        (5) ------------------------------------------------------- 48.01/21................................................... (2)  Newsprint containing      mechanical wood pulp      amounting to not less      than 70 per cent of      the fibre content          40%          -        -      (excluding chrome,      marble, flint, poster,      stereo and art paper)      ......................................................"      Newsprint used  by the  petitioners  falls  under  Sub- heading (2)  of Heading No. 48.O1/21 by Which 40% ad valorem customs duty  is levied on it. By the Finance Act of 1982 in sub-heading No.  (2) of  Heading No. 48.O1/21, for the entry in column  (3), the  entry "40% plus Rs. 1,000 per tonne was substituted.       The  relevant part  of section  44 of the Finance Act, 1982 which levied an auxiliary duty of customs read thus:               "44. (1) In the case of goods mentioned in the      First Schedule  to the  Customs Tariff  Act, or in that      Schedule, as  amended from time to time, there shall be      levied and collected as an auxiliary duty of customs an      amount equal]  to thirty  per cent  of the value of the      goods as  determined in  accordance with the provisions      of section  14 of  the Customs  Act, 1962  (hereinafter      referred to as the Customs Act).      ......................................................"      The above  rate of  auxiliary duty  was to  be in force during the  financial year  1982-83 and  it was  open to the Government to  grant exemption from the whole or any part of it under section 25 of the Customs Act, 1962.      Section 45  of the  Finance Act, 1983 imposed fifty per cent of  the value  of the  goods as  auxiliary duty  in the

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place of thirty per cent imposed by the Finance Act, 1982. 309       But  by notifications issued on February 28,1982 under section A 25 (2) of the Customs Act, 1962, which were issued in supersession of the notification dated March 1, 1981, Rs. 550 per  tonne was  imposed as customs duty on newsprint and auxiliary duty  was fixed  at Rs.  275 per tonne. In all Rs. 825 per  tonne of newspaper has to be paid as duty. The high sale price  of newsprint  had by that time gone up above Rs. 5,600 per tonne.       What  is of  significance is  that when the Government was of  the view that the total customs duty on newsprint in the public  interest should be not more than 15 per cent and when these  writ petitions questioning even that 15 per cent levy were  pending in  a this Court, Parliament was moved by the Government  specifically to  increase the  basic customs duty on newsprint by Rs. 1,000 per tonne by the Finance Act, 1982. Hence  today if the Executive Government withdraws the notifications issued  under section 25 of the Customs Act, a total duty  of 90 per cent plus Rs. 1000 per tonne would get clamped on imported newsprint. D       The  effect of  the imposition of 15 per cent duty may to some  extent have  led to  the increase  in the  price of newspapers  in   1981  and   it  resulted  in  the  fall  in circulation of  newspapers. On  this point  the Second Press Commission has made the following observations in its Report (Vol. 1 page 18): E      "Fall in circulation during 1981.                 94. To examine recent trends in, circulation      and their relationship to recent trends in the economic      environment,  the   Commission’s  office  undertook  an      analysis of  the Audit  Bureau  of  Circulations  (ABC)      certificates for  the period July 1980 to June 1981. It      was found  that there  was a  decline in circulation in      the period  January-June 1981  compared to the previous      six-month  period   in  the   case   of   dailies   and      periodicals."      The two  important events  which had taken place during the period  between  July,  1980  to  June,  1981  were  the enforcement of  the Palekar  Award regarding  the wages  and salaries  payable   in  the   newspaper  industry   and  the imposition of  the customs  duty  of  15%  on  the  imported newsprint. Under  the newsprint  policy  of  the  Government there are three sources of supply of newsprint-(i) high 310 seas sales, (ii) sales from the buffer stock built up by the State  A   Trading  Corporation   which  includes   imported newsprint  and   (iii)  newsprint   manufactured  in  India. Imported newsprint  is an  important component  of the total quantity   of    newsprint   utilised   by   any   newspaper establishment.                             III      The Importance  of Freedom  of Press  in  a  Democratic society and the Role of Courts.      Our Constitution  does not  use the expression ’freedom of press’  in Article  19 but  it is  declared by this Court that it  is included  in Article  19(1)(a) which  guarantees freedom of  speech and  expression. (See Brij Bhushan & Anr. v. The State of Delhi(l) and Bennett coleman & Co. & Ors. v. Union of lndia & ors.(2)      . The  material part  of Article 19 of the Constitution reads:       "19. (1) All citizens shall have the right-            (a) to freedom of speech and expression; .........................................................

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             (g) to practise any profession, or to carry on      any occupation, trade or business,       (2)  Nothing in  sub-clause (a)  of clause  (1)  shall affect the  operation of  any existing  law, or  prevent the State from  making any  law, in  so far  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 said  clause shall affect  the operation of any existing law in so far as it imposes, or prevent the State from making any law impos- (1) (1950) S.C.R. 605. (2) [1973] 2 S.C.R. 757 311        ing,   in  the   interests  of  the  general  public, reasonable  restrictions   on  the  exercise  of  the  right conferred by the said sub-clause.................. "       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  guarnteed 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  Constitutions  should guarantee and secure to all the people of India among others freedom of  thought and expression. He also stated elsewhere that "I  would rather  have a completely free press with all the dangers involved in the wrong use of that freedom than a suppressed or 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  impossible in the public interest is not one enumerated in clause (2) 312 of Article  19. In Romesh Thappar v. The State of Madras and

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Brij Bhushan’s  case (supra) this Court firmly expressed its view that  there could not be any kind of restriction on the freedom of  speech and expression other than those mentioned in Article  19(2) and thereby made it clear that there could not be  any interference  with that  freedom in  the name of public interest.  Even when  clause (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.       Article  19 of  the  Universal  Declaration  of  Human Rights,  1948 declares  very one 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’.       Article  19 of the International Covenant on Civil and Political Rights, 1966 reads:      "Article 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,           through any other media of his choice.      3.   The  exercise   of  the  rights  provided  for  in           Paragraph  2  of  this  Article  carries  with  it           special  duties   and  responsibilities.   It  may           therefore be  subject to certain restrictions, but           these shall  only be  such as  are provided by law           and are necessary: 313      (a)  For  respect  of  the  rights  or  reputations  of           others;      (b)  For the  protection of  national  security  or  of           public order  (order public),  or of public health           or morals."       Article  10 of the European Convention on Human Rights reads:      "Article 10      1.   Everyone has  the right  to freedom of expression.           This right  shall include freedom to hold opinions           and to  receive and  impart information  and ideas           without  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  penalities as  are prescribed  by           law and  are necessary in a democratic society, in           the interests  of national  security,  territorial           integrity or  public safety, for the prevention of           disorder or crime, for the protection of health or           morals, for  the protection  of the  reputation or

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         rights of others, for preventing the disclosure of           information  received   in  confidence,   or   for           maintaining the  authority and impartiality of the           judiciary."              The  First Amendment to the Constitution of the United States of America declares:      "Amendment I                  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."                  Frank C.  Newman and  Karel Vasak  in their      article on ’Civil 314 and Political  Rights’ in  the International  Dimensions  of Human Rights  (Edited by  Karel Vasak) Vol. I state at pages 155-156 thus:      "(ii)     Freedom of  opinion, expression,  information           and  communication.  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           modern 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."      "Many Voices,  One World" a publication of UNESCO which      contains  the   Final  Report   of  the   International      Commission for  the study  of  Communication  Problems,      presided over  by Sean  Mac Bride,  in part  V  thereof      dealing  with  ’Communication  Tomorrow’  at  page  265      emphasizes the  importance of  freedom  of  speech  and      press in  the  preservation  of  human  rights  in  the      following terms:      "IV. Democratization of Communication.      Human Rights      Freedom of  speech, of the press, of information and of      assembly are vital for the realization of human rights 315      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

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    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 subjected 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 infrom, the      right to  privacy, the  right to practicipate 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  to  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  democratization  of      society and  of widening  public participation  in  the      decision-making 316      process. This  depends on  the structures and practices      of the  media and  their management  and to what extent      they   facilitate   broader   access   and   open   the      communication process  to a  free interchange of ideas,      information  and   experience  among   equals,  without      dominance of discrimination."       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. Newspaper being surveyors of news and views having a bearing on public  administration very  often carry  material  which would not be palatable to governments and other authorities. The  authors   of  the   articles  which  are  published  in newspapers have  to be  critical of the action 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,  the governments in  different  parts  of  the  world  have  used

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diverse methods  to keep  press  under  control.  They  have followed carrotstick methods. Secret payments of money, open monetary grants  and subventions,  grants of  lands,  postal concessions, Government advertisements, conferment of titles on editors and proprietors of newspapers, inclusion of press barons  in   cabinet  and   inner  political  councils  etc. constitute one  method of  influencing the  press. The other kind of  pressure is  one of  using force against the press. Enactment of  laws providing  for  precensorship,  seizures, interference with  the transit  of newspapers  and demanding security deposit,  imposition of restriction on the price of newspapers, on  the number  of pages  of newspapers  and the area that  can be devoted for advertisements, withholding of Government  advertisements,   increase  of   postal   rates, imposition of  taxes on newsprint, 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 guaran 317 teeing the  freedom of speech and expression laying down the limits of  interference  with  it.  lt  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.       Thomas  1. Emerson  in his  article entitled ’Toward a General  Theory  of  the  First  Amendment’  (The  Yale  Law Journal, Vol.  72,877 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 expectiations, of      the social  order in which they operate. They must not,      and ultimately  can not,  move too far ahead or lag too      far behind. The problem for the Supreme Court is one of      finding  the   proper  degree   of  responsiveness  and      leadership, or  perhaps better,  of short-term and long      term responsiveness.  Yet in  seeking out this position      the Court  should not  under estimate the authority and      prestige it  has achieved  over the years. Representing      the "con  science of  the community"  it  has  come  to      possess a  very real  power to keep alive and vital the      higher values  and  goals  towards  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."       What is stated above applies to the Indian courts with equal  force-.   In  Romesh   Thappar’s  case  (supra)  Brij Bhushan’s case  (supra), Express Newspapers (Private) Ltd. & Anr. v.  The Union of India & Ors.,(l) Sakal Papers (P) Ltd. &. Ors.  v. The Union of India(2) and Bennett Coleman’s case (supra) this Court has very strongly pronoun- (1) [1959] S.C.R. 12. (2) [1962] 3 S.C.R. 842.

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318 ced in  favour of  the freedom  of press. Of these, we shall refer to  some observations  made by  this Court  in some of them.       In  Romesh Thappar’s  case (supra)  this Court said at page 602:               "(The freedom).. .lay at the foundation of all      democratic organisations,  for without  free  political      discussion on 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 .................. C’(nut)      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"."       In  Bennett Coleman’s  case (supra)  A.N. Ray, C.J. On behalf of the majority said at page 796 thus:               "The faith of citizen is that political wisdom      and virtue  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 ’Ask of the Covenant’      in very  democracy-.... The newspapers give ideas., The      newspaper ‘give the people the freedom to find out what      ideas are correct."                In the very same case, Methew, J, observed at      page 818:      "The constitutional  guarantee of the freedom of speech      is not  so much  for the  benefit of the 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 v. Hill (385 U.S. 374)      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. Connecticut (381 U.S. 479, 482) the U.S.      Supreme Court  was of  the opinion  that the  right  of      freedom of speech and press includes not only the right      to utter or to print, but the right to read." 319      Justice Mathew  proceeded to  observe (at pp. 819-820):      "Under Art. 41 of the Constitution the State has a duty      to A  take effective steps to educate the people within      limits  of   its  available  economic  resources.  That      includes political education also.      Public discussion  of public  issues together  with the      spreading of  information  and  any  opinion  on  these      issues  is   supposed  to   be  the  main  function  of      newspaper. The  highest and  lowest  in  the  scale  of      intelligence resort  to its  columns  for  information.      Newspapers is  the most  potent means for educating the      people as  it is  read by  those who  read nothing else      and, in  politics, the  common man  gets his  education      mostly from newspaper.      The affirmative  obligation of the Government to permit      the import  of newsprint  by expanding foreign exchange      in  that  behalf  is  not  only  because  press  has  a      fundamental right  to express  itself, but also because      the 1  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

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    Government may,  under cl.  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 of educate the people as      also to satisfy the individual need for self exression,      it is  not for  the proprietor  of a newspaper alone to      say  that   he  will  reduce  the  circulation  of  the      newspaper and increase its page level, as the community      has  an   interest   in   maintaining   or   increasing      circulation of  the  newspapers.  It  is  said  that  a      proprietor of  a newspaper  has the freedom to cator to      the needs  of intellectual  highbrows who may choose to      browse in  rich pastures  and for that he would require      more pages  for a  newspaper and  that it  would  be  a      denial of his fundamental right if he were told that he      cannot curtail  the circulation and increase the pages.      A claim  to enlarge the volume of speech by diminishing      the circulation 320      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."      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  hierarchy  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 321

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    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      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 in different to the reality      and  implication   of  non-governmental   restraint  on      exercise  of   freedom  of   speech  by  citizens.  The      indifference becomes  critical when comparatively a few      persons are  in a  position to  determine not  only the      content of  information but also its very availability.      The 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      fulfill the  individual interest  by enabling virtually      everyone with  a distinctive opinion to find some place      to express it." D       The  petitioners have heavily relied upon the decision of  this   Court  in  sakal’s  case  (supra)  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 week days and 56,000 copies on Sundays.  The daily edition contained six pages a day for five days  in a week and four pages on one day. This edition was priced  at 7  paise. The Sunday edition consisted of 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 322 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 desire  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

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of monopolistic  combines so that newspapers might have fair opportunities of  free discussion.  It was  also con  tended 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 page 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 one’s 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 pro      visions which without disguise are aimed at restricting      the circulation  of what  are termed  the larger papers      with better  financial strength-  The impugned  law for      from being  one, which merely interferes with the right      of freedom    speech  incidentally,  does  so  directly      though it 323      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 news  papers which would necessarily undermine their      power to  influence public  opinion it  cannot stat  be      regarded as  a dangerous  weapon which  is  capable  of      being used against democracy itself."       Continuing further the Court observed at pages 867 and 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

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    apart  from   the  fundamental   right  infringed   the      provision is otherwise legal." 324       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 ?       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  systems 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.       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 19 325 which carve  out areas in respect of which valid legislation can be A 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.       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: C              "...... No one would be happier than myself and      my friends belonging to the press, if the House were to      decide today that newspapers will be free from all such      taxes. Of  course that  is what it should be because in

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    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,  there. fore,  expect this      House and  my friend  Mr. Sidhva  to bear it in mind at      the time  when God forbid any proposal comes before the      Parliament for  taxation. That  would be  the time  for      them to oppose it.               Sit, after all, this is an enabling clause. It      does  not   say  that   there  shall   be   sales   and      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 whole country realising the full 326       implications  of their  action. It  should not  be  an isolated A  act  on  the  part  of  some  Ministry  of  some province. That  was the  fundamental basis  of our amendment ......................................................    If today all  news papers  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 be cause  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 takes 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).       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.       On the power of t e Government in the United States of America to levy taxes on and to provide for the licensing of news papers,  Corpus Juris  Sequndum (Vol.  16) says at page

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1132 as follows: 327      "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  fees 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  guaranty of  freedom  of  the press does  not forbid  the taxation  of money  or  property employed in  the publishing  business, or  the imposition of reasonable  licenses   and  license   fees  on   trades   or occupations concerned  with the  dissemination of 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  street 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, 328      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."        The   above  subject   is  summarised   in   American Jurisprudence 2d (Vol. 16) at page 662 thus:                  "Speech can  be effectively  limited by the      exercise of that 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."       It  may be  mentioned here that the First Amendment to the Constitution  of the  United States of America is almost

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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 severeignty 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 govern 329 mental agents  to exact  or impose  a charge upon persons or their property for the support of the government and for the payment  for   any  other   Public  purposes  which  it  may constitutionally carry  out. Eminent  domain  is  the  legal capacity of  sovereignty or  one of its governmental agents, to take  private property for public use upon the payment of just compensation.’  It is  under the  above said  sovereign power of  taxation the  government is  able to levy taxes on the publishers of newspapers too, subject to judicial review by  courts   notwithstanding  the   language  of  the  First Amendment which is absolute in terms. In India too the power to levy  tax even  on persons  carrying on  the business  of publishing newspapers  has got  to be  recongnised as  it 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.        Thomas  I.  Emerson  in  his  article  on  the  First Amendment (The Yale Law Journal, Vol. 72 at p. 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 organisations  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.

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               Two principles for delineating the bounds of      "abridg- 330       ing"  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. (Underlining by us).       This  view appears to have been accepted by our Second Press Commission  in its  Report (Vol.  I) at  page 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  other      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."      In Alice  Lee Grosjean,  Supervisor of  Public Accounts for the  State of  Louisiana v. American Press Company(l) 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 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 pages 668-669: ---------------------------------------- (1) 297 U.S. 233: 80 L. ed. 660. 331              "In the light of all that has now been said, it      is evident that the restricted rules of the English law      in respect  of the A 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 untrammelled

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    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." (Underlining by us)                 The levy imposed by Louisiana was quashed by      the Supreme 332 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. In Robert Murdock, Jr. v. Commonwealth of Pennsylvania (City of Jeannette)(1)  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 pages 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 expenses      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.............

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(1) 319 U.S. 105: 87 Law. ed. 1292. 333                          The  fact  that  the  ordinance  is      ’’nondiscriminatory’’ A  is immaterial.  The protection      afforded by the First Amendment is not so restricted. A      license tax  certainly does  not acquire constitutional      validity because it classifies the privileges protected      by  the  First  Amendment  along  with  the  wares  and      merchandise of  hucksters and  peddlers and treats them      all alike. Such equality in treatment does not save the      ordinance. Freedom of press, freedom of speech, freedom      of religion  are in a preferred position." (Underlining      by us).              Justice  Reed who  dissented from  the majority observed at page 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 Columbia, 116 US 404, 29 L  ed 680, 6 S Ct 427. This Court has held that the chief purpose of  the free press guarantee was to prevent previous restraints upon  publication. Near  v. Minuesota 283 US 697, 713, 75  L ed  1357, 1366,  51 S  Ct  625.  In  Grosjean  v. American Press  Co., 297 US 233, 250, 80 L ed 660, 668, 56 S Ct 444,  it was.,  said that  the predominant purpose was to preserve "an  untrammelled press as a vital source of public information."  In  that  case,  a  gross  receipts  tax  Oil 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.....".              There was this further comment:              "It is not intended by anything we have said to      suggest 334 that the  owners of  newspapers are  immune from  any of the ordinary forms  of taxation  for support  of the government. But this  is not  an ordinary form of tax, but one single in kind, with  a long  history of  hostile misuse  against  the freedom of  the press." Id. 297 Us 250, 80 L ed 668. 56 S Ct 444.          It may be said, however, that ours is a too narrow, technical and  legalistic approach  to the  problem of state taxation of  the activities  of church  and press;  that  we should look  not to  the expressed  or historical meaning of the First  Amendment but  to the  broad principles  of  free speech and  free exercise  of  religion  which  pervade  our national  way  of  life.  It  may  be  that  the  Fourteenth Amendment guarantees  these principles  rather than the more definite concept  expressed in  the  First  Amendment.  This would mean that as a Court, we should determine what sort 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

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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 book sellers 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."      Justice Reed added at pages 1307 and 1308 thus: 335                  "It is urged that such a tax as this may be      used   readily to  restrict the dissemination of ideas,      This must  be conceded  but the  possibility of  misuse      does not  make a  tax  unconstitutional.  No  abuse  is      claimed here. The 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." (Underlining by us.)        Justice  Frankfurter  who  also  dissented  from  the majority observed at pages 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 exeacise 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 336                Court has not done so, and indeed could not."      (Under lining by us)       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

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uniform license tax unrelated to the scope of the activities of the  persons who  had to beat 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.      We may  usefully refer  here to  a passage  in the foot note given  below the  Essay No  84 by Alexander Hemilton in ’The Federalist’. it reads:                  "It cannot  certainly be pretended that any      degree of  duties, however  low, would be an abridgment      of the  liberty of  the press.  We know that newspapers      are taxed  in Great  Britain, and  yet it  is notorious      that the  press nowhere  enjoys greater liberty than in      that country.  And if  duties of  any kind  may be laid      without a  violation of   that  liberty, it  is evident      that the  extent must depend on legislative discretion,      regulated by public opinion ;"       At this stage we find it useful to refer to a decision of the  Privy Council  in Attorney General & Anr. v. Antigua Times Ltd.(  Where  the  Judicial  Committee  of  the  Privy Council was  called upon to decide about the validity of the imposition of  a licence  fee of  p S  600 annually  on  the publisher of  a newspaper under the News papers Registration (Amendment) Act,  1971. Section  10 of  the Constitution  of Antigua read as follows:              "10. (1) Except with his own consent, no person      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 (1). [1975] 3 All E.R. 81 337                  (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."       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 S. IB 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

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    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 338                taxing power but constitutes in substance and      effect  the   direct  execution   of  a  different  and      forbidden power.’  y the  amount of the licence fee was      so manifestly  excessive its  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 the      raising of revenue.                  In there Lordships’ opinion the presumption      that the  newspapers Registration (Amendment) Act, 1971      was reasonably  required has  not been reputed 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."  (Underlining by      us)       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.      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  Pressversus 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 sub-leties of power. Walter  Lippman in  his address  to the International Press Institute some 339 years ago  said that  the danger  to  the  independence  and integrity of  journalists did  not come  from the  pressures that might  A be  put on  them; it  was that  they might  be captured and  capitivated by  the company  they keep. Arthur 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.

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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 Minister that the freedom of press is  endangered.’ Lord  Salisbury told  Buckle a famous editor in England "you are the first person who has not come to see  me in the last few days who is not wanting something at my  handsplace or  decoration or  peerage. You  only want information."   Charles   Mitchell   wrote   in   ’Newspaper Directory’. The  Press has  row so great and so extensive an influence on public opinion...that.... its conductors should be GENTLEMAN  in the  true sense of the word. They should be equally above  corruption and    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 interest 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.       Newspaper  industry  enjoys  two  of  the  fundamental rights,  namely   the  freedom   of  speech  and  expression guaranteed under  Article 19  (l) (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 on invasion of trade, business and industry 340 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, occupations trade, business and  industry. Hence  tax is  leviable on newspaper industry. But  when such  tax transgresses into the field of freedom of  expression and  stifles that freedom, it becomes unconstitutional. As  long as it is within reasonable limits and does not impede  freedom  of expression  it will  not  be  contravening  the limitations  of   Article  19  (2).  The  delicate  task  of determining when  it crosses  from the  area of  profession, occupation, trade,  business or  industry into  the area  of freedom of  expression and  interferes with  that freedom is entrusted to the courts.      The petitioners,  however, have  placed strong reliance on the  Sakal’s case  (supra) and the Bennett Coleman’s case (supra) in  support of  their case that any tax on newsprint which is  the most  important component  of a  newspaper  is unconstitutional. They  have  drawn  our  attention  to  the following passage  in the  decision in  Sakal’s case (supra) which is at page 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

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    this object  by directly and immediately curtailing any      other  freedom   of  that  citizen  guaranteed  by  the      Constitution  and   which   is   not   susceptible   of      abridgement on  the same  grounds as are set out in cl.      (6) of  Art. 19.  Therefore, the  right of  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 cls.      (3) to  (6). For, the scheme of Art. 19 is to enumerate      different freedoms  separately and  then to specify the      extent of  restrictions to  which they  may be subjects      and   the object for securing which this could be done.      A citizen 341               is entitled to enjoy each and every one of the      freedoms together  and cl.  (1)  does  not  prefer  one      freedom to A another. That is the plain meaning of this      clause. It follows from this that the State cannot make      a law  which directly  restricts one  freedom even  for      securing the  better enjoyment  of another freedom. All      the greater  reason, therefore,  for holding  that  the      State cannot  directly restrict  one freedom by placing      an otherwise permissible restriction another freedom. "       In  Bennett Coleman’s  case (supra) the question which arose  for  consideration  related  to  the  validity  of  a restriction imposed  under the  newsprint policy  which  had certain objectionable features such as (i) that no newspaper or new  edition could be started by a common owner-ship 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.       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 a 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

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the imposition of a tax like the customs duty on 342 new newsprint  is  an  imposition  on  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 t 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(l).  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 other matters  concerning  newspapers  industry  than  while levying taxes  on  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.       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, (1) [1973] 3 All. E.R. 54 343 it may  be sufficient  to show  a  distinct  and  noticeable burdensomeness, clearly  and directly  attributable  to  the tax. A       While  we, therefore, cannot agree with the contention that no  tax can  be levied  on newspaper  industry, we hold that any  such levy  is subject  to review  by courts in the light of the provisions of the                              V                  Are the impugned notifications issued under      section 25 of the Customs Act. 1962 beyond the reach of      the Administrative Law.              It is argued on behalf of the Government that a notification issued  under section  25(1) of the Customs Act granting, modifying  or withdrawing  an exemption  from duty

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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  &  Ors.  v.  Lt..  Governor,  Administrator.  Union Territory, Himachal  Pradesh &  Ors. (1)  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  privileges  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 Governments  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 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 344 legislative body or a subordinate Legislative body to a 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:                  "Our attention  has not  been drawn  to any      provision in  that, Act  empowering the  Government  to      exempt any  assessee from  payment of tax. Therefore it      is clear  that appellant  was liable  to  pay  the  tax      imposed under  the law. What the appellant really wants      is a  mandate from the court to the competent authority      to 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 the  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

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    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.      Art. 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 specially empowered by law to give any      exemption it  cannot say  that it  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      held that  the relief asked for by the appellant cannot      be granted." (Underlining by us) 345       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 delegation by the legislature and the power of that Government to grant exemption under a power to grant K  exemption. In  the present  cases we  are concerned with a  power to  grant exemption conferred on Government by section 25  of the Customs Act, 1962 and not with a power to amend the  Act by means of a notification. Moreover this was just a case relating to business in liquor.       We  shall assume  for purposes of these cases that the power to  grant exemption  under section  25 of  the Customs 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 & Anr.(l) has laid down the above principle. In that case Wanchoo, C.J. while upholding certain taxes levied by the  Corporation of  Delhi under section 150 of the Delhi Municipal Corporation Act, 1957 observed thus:               "Finally there is - another check on the power      of the  Corporation which  is inherent in the matter of      exercise of  power by subordinate public representative      bodies such  as municipal  boards. In such cases if the      act of  such a  body  in  the  exercise  of  the  power      conferred on  it by the law is unreasonable, the courts      can  hold   that  such   exercise  is   void  for   the      unreasonableness. This  principle was  laid down as far      back as 1898 in Kruse v. Johnson [1898] 2 Q.B.D. 91"       But  it appears that the principle enunciated in Kruse v. Johnson  (2) is  not  being  applied  so  stringently  in England now.       A  piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a com- (1) [1968] 3 S.C.R. 251. (2) [1898] 2 Q.B.D. 91. 346 petent   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

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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  Properties Ltd. v. Chertsey U.D.C.(1) thus:                  ’The various grounds upon 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  invalid dates a by-law      is not  the antonym of ’reasonableness’ in the sense of      which that  expression is  used in  the common law, but      such mainfest  arbitrariness, injustice  or  partiality      that a  court would  say: ’Parliament never intended to      give  authority   to  make   such   rules:   they   are      unreasonable and  ultra vires..  -’ 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. "                  Prof. Alan  Wharam in  his Article entitled      ’Judicial Control of Delegated Legislation: The Test of      Resonableness’ in  36 modern  Law Review  611 at  pages      622-23 has  summarised the  present position in England      as follows:                  "(i) It  is possible  that the courts might      invalidate  statutory  instrument  on  the  grounds  of      unreasonableness   or    uncertainty,   vagueness    or      aribitrariness; but the writer’s (1) [1964] 1 Q.B.. 214. 347        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 by-      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      by-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      Hospital [1951]  ch. 567  that it  would be  subject to      strict control."               (See also H.W.R. Wade: Administrative Law (5th      Edn.) pp. 747-748).       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

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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.       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 The Tulsipur Sugar Co. Ltd. v. The Notified Area Committee,  Tulsipur(l), Rameshchandra Kachardas Porwal & Ors. v. State of (1) [1980] 2 S.C.R- 1111. 348 Maharashtra &  Ors. etc(1). and in Bates v. Lord Hailsham of St Marylebone  & Ors(2).  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, nonapplication  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  be  may  struck  down  as arbitrary or  contrary to  statute if  it fails to take into account very  vital  facts  which  either  expressly  or  by 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 doe- 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 n into  account   relevant  circumstances   which  the   Court considers relevant.             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.       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(U) what a ’reasonable way’ means as follows:                "It is true that discretion must be exercised      reason ably. Now what does that mean ? Lawyers familiar      with (1) [1981] 2 S.C.R. 866. (2) [1972] 1 WLR 1373. (3) [1948] 1 K.B. 223. 349      the  phraseology   used  in  relation  to  exercise  of      statutory   A    discretions   often   use   the   word      ’unreasonable’ in  a rather comprehensive sense. It has      frequently been  used  and  is  frequently  used  as  a

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    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 some- thing so      absurd that no sensible person could ever dream that it      lay within the powers of the authority. Warrlngton L.J.      in short  Y, Poole  Corporation [1926]  Ch. 66 gave the      example of  the red-haired  teacher, dismissed  because      she had red hair. This is unreasonable in one sense. In      another it  is so  unreasonable that it might almost be      described as being done in bad faith; and, in fact, all      these things run into one another."       Hence  the claim made on behalf of the Government that the impugned  notifications are  beyond  the  reach  of  the 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.       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  news-  print.  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 350 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 the State of Madras v.  V.G. Rao(l)).  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

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observations of  Lord Denning  M.R, in  Breen v. Amalgamated Engineering Union(2) at page 190 read thus:                 "The discretion of a statutory body is never      unfet -tered.  It  is  a  discretion  which  is  to  be      exercised according  to law.  That means at least this:      the  statutory   body  must   be  guided   by  relevant      considerations and  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  Pad-field  v.      Minister of  Agriculture Fisheries and Food [1968] A.C.      997 which is a landmark in modern administrative law."                 In any event any notification issued under a      statute also (1) [1952] S.C.R. 597. (2) [1971] 2 Q.B. 175. 351 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 ?       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 press 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 page 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 intro- 352              duction 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

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    newspapers."       In Chapter 4 of the same Report at page 100 the Inter- national Commission has observed thus:                   "While  newspapers  which  are  commercial      enterprises expect  to sustain  themselves by sales and      advertising,  they   are  not  always  viable  on  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.       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.      In Sakal’s case (supra), this Court has observed thus; 353                  "The effect of raising the selling price of      newspaper  A   has  been   considered  by   the   Press      Commission. In  Paragraph  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 27th October 1952,           Times of  India which  had the highest circulation           at Bombay  was being  sold at Re. 0-2-6 while Free           Press Journal  and National  Standard  which  rank           next in circulation were being sold for Re. 0-2-0.           On 27th  October, 1952, Free Press Journal reduced           its price  to Rs.  0-1.0 and  within  a  year  had           claimed to  have doubled  its circulation.  On 1st           July, 1953,  the National  Standard was  converted           into a  Bombay edition  of Indian  Express with  a           selling price  of Rs.  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."

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"        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 Paragraph 52 of its report. According to it the most common reason for people in not purchasing  newspapers is  the cost of the newspaper and the inability  of  the  household  to  spare  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 354      nP. in  order that its present size be maintained would      adversely affect its circulation."       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 page 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   news   papers      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 19th century may be gathered from the fact      that the  number of  stamps issued  in 1820  was nearly      29,400,000, and the incidence of the advertisement tax,      fixed 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      reduction of  the stamp  tax in 1836 from four pence to      one penny,  the circulation  of  English  news  papers,      based on  the stamp  returns, rose  from 39,000,000  to      122,000,000 in 1854." 355       The Second Press Commission in its Report (Vol. II) at pages 182-183  has stated that the figures of circulation of newspaper A  compiled by  the Audit  Bereau  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 very  big newspapers  with circulation  of one  lakh  and above than  in the  case of  smaller papers.  The Commission

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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.       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 40x6 ad valorem customs duty on the  coming into  force of  the Customs Tariff Act, 1975. Then again in 1982 by the Finance Act, 1982 an extra levy of Rs. 1,000  per tonne  was  G  imposed  in  addition  to  the original 40% ad valorem duty even though under the exemption notification the  basic duty  had been  fixed at  10% of the value  of   the  imported   newsprint.  No   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 356 Rs. 1,000  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  is 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 alongwith 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.  1,000  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

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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, it.  This shows  that nobody  in Government had  over 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 15% of 357 duty. In  the counter-affidavit  it  is  asserted  that  the extent of  A 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 question before withdrawing the total  exemption which  was being  enjoyed by  newspaper industry  till   March  1,1981  and  imposing  15%  duty  on newsprint.       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’s case (supra)  that Article  19(1) (a)  is infringed thereby. Our attention  is drawn to the following passages in Bennett Coleman’s case (supra) which are at pages 777778 and at page 782:                     "Publications  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. In the price goes      up circulation  will go  down. This  was held  in Sakal      Papers Case  (supra) 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 something which is an 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........

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             The various provisions of the newsprint import      policy have  been examined  to indicate  as to  how the      petitioners’ II 358                fundamental rights have been infringed by the      restrictions on  page limit,  prohibition  against  new      newspapers   and   new   editions.   The   effect   and      consequences 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  newspapers 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."       In meeting the above contention the Government relying on the  decision in  Hamdard Dawakhana  ( Wakf  ) Lal  Kuan, Delhi &  Anr. v.  Union of  India &  Ors.(1) 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’s  case (supra).  The main  plank of  that decision was that the type Of advertisement dealt with there did not carry with it the protection of Article 19(1)(a). On 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. Chresten sen (2) observed at pages 687-689 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      Valentine v.  F.). 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 (1) [1960] 2 S.C.R. 671. (2) 86 Law ED. 1262. 359 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 prescribe  its employment  in these public thoroughfares. We  are equally  clear that  the Constitution imposed no  such restraint  on government as respects purely commercial  advertising   y-..  -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

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is a  matter dealing  with freedom  of speech  nor can it be said that  it is  an expression  of ideas. In every case one has to  see what is the nature of the advertisement and what activity falling  under Art.  19(I) it seeks to further. The advertisements in  the instant  case relate  to commerce  or trade and  not to  propagating of  ideas; and advertising of prohibited drugs  or commodities of which the sale is not in the interest  of the  general public cannot be speech within the meaning  of freedom  of speech and would not fall within Art. 19(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 advertisement 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’s case  1957 S.C.R.  930 it  was  said  that activities undertaken  and carried on with a view to earning profits e.g.  the business  of betting and gambling will not be protected  as falling  within  the  guaranteed  right  of carrying on  business or trade, so it cannot be said that an advertisement commending drugs and substances an 360                  appropriate cure for certain discases is an      exercise of the right of freedom of speech."       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 (supra), 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. Cammarano  v, United States of America(1) Justice Douglas said "  Valentine  v.  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 off hand. And  it has  not survived reflection". In Jeffrey Gole Bigelow v.  Commonwealth of Virginia(2) the American Supreme Court held  that the  holding in  Lewis J. Valentine v. F.J. Chrestensen (supra) was distinctly a limited one. In view of the foregoing,  we feel  that the  observations made  in the Hamdard Dawakhana’s case (supra) are too broadly stated’ and the Government  cannot draw  much support from it. We ate 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.       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 end  expression by virtue of  the levy  of customs  duty on newsprint. Reliance was placed in support of the above contention (1) 358 US 498: 3 L ed 2d 462 (2) 421 US 809: 44 L ed 2d 600 at 610 361

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On the  decision in  In re Sea Customs Act.(l) That decision was A  rendered on  a reference  made by the President under Article 143  of the  Constitution requesting  this Court  to record its  opinion on  the  question  whether  the  Central Government could  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 (t)  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  the   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 to levied on international trade and  not on  property. The Court further held that the immunity granted  under Article  289 (1)  in favor 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 newspaper and the levy  of customs  duties had  a direct  effect  on  that activity. There  exists no  analogy between  Article 289 (l) 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.       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 (1) [1964] 3 S.C.R. 787. 362 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 will  whiohhinder 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.(l) in which it was held that a publication could not be deprived of  the  benefit  of  second  class  mailing  rates accorded to  publications disseminating  "information  of  a public character, or 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      favorable  second   class   rates   were   granted   to

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    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 & 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." (1) 327 U.S. 146: 90 L. Ed. 586 363       Matters concerning the intellect and ethics do undergo fluctuations from  era to  era.  The  world  of  mind  is  a changing one.  A It is not static. The streams of literature and of  taste and  judgment in that sphere are not stagnant. They have  a quality  of freshness  and vigour. They keep on changing from  time to  time, from  place to  place and from community to community.       It  is one thing to say that in view of considerations relevant to  public finance  which require  every citizen to contribute a  reasonable amount  to public exchequer customs duty  is  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 custom duty is wholly irrelevant.       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.            It is argued on behalf of the Government that the

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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 Honourable Dr. Paul Borg Olivier & Anr v. Honourable Dr. Anton Buttigieg(l) a case from Malta, that where (1) 11967] A.C. 115 (P.C.) 364 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. Collins (I)                  "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  right  of  all.  Seedlings      planted in  that soil  grow great  and, growing,  break      down the foundations of liberty."       In  the above  decision the  Privy Council  cited with approval  the   view  expressed  by  this  Court  in  Romesh Thappar’s case (supra) and in Martin v. City of Struthers(2) 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 Thappey v. State      of Madras):                "There can be no doubt that freedom of speech      and expression includes freedom of prepagation of ideas      and that  freedom is secured by freedom of circulation.      ’Liberty of circulation is as essential to that freedom      as  the   liberty  of   publication.   Indeed   without      circulation the publication would be of little value." (2) [1944] 323 U.S. 516 (3)[1943] 319 U.S. 141 365       Similar  thoughts were  expressed by  Black J.  in his judgment in Martain 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".       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 lacs and The Statesman Ltd. has to pay Rs. 35.9  lacs by  way of customs duty on newsprint imported during 1983-84.  Other big newspapers have also to pay large

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sums by way of customs duty annually.       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  synchronizing  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 366 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 freedom of the press,  we are  also not  able to come to the conclusion that it  will not be burdensome. This 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 and 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 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.                 Is the classification of newspapers made for      the purpose of exemption violative of Article 14 7        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

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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’s case (supra) it is the duty of  the State  to encourage  education  of  the  masses through the  medium of  the press  under Article  41 of  the Constitution. We? therefore, reject this contention. 367                             VIII                            Relief       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 ale  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  he 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 India and Ors.(1) In that case  the facts  were these: in 1952, a ’carry forward’ rule governing  the Central  Service 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. The Union of India & Anr.(2)  the 1955  rule was declared unconstitutional. One of the  questions which arose for consideration in this case ’Tiwari’s case (supra) 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:                "We shall first consider the question whether      the carry forward rule of 1952 still exists. It is true      that in Devadasan’s case, the final order of this Court      was in these terms:-          "In the result the petition succeeds partially and (1) [1965] 2 S.C.R. 421 (2) [1964] 4 S.C.R, 680 368      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 the carry forward by 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  canceled 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

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    carry forward  rule of 1952 which had already ceased to      exist, because  the Government of India itself canceled      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’s 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."       In Firm A.T.B. Mehtab Majid & Co. v. State of Madras & Anr.(1) 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.       The  rule in  Mohd. Shaukat  Hussain Khan  v. State of Andhra Pradesh(2)  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 (1) [19631 Supp. 2 S.C.R. 435 at 446. (2) [1975] 1 S.C.R, 429 369 the striking  down of  a later law which purported to modify or repeal A 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  Shri  Mulchand  Odhavji  v. Rojkot Borough Municipality 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 a            "The  Government rules, however, were to cease to      operate as the notification provided "from the date the      said Municipality  put into  force their independent by      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 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

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    respondent-Municipality they  continued to operate. The      submission of counsel in this behalf, therefore, cannot      be sustained."      In the cases before us we do not have rules made by two (1 ) A.l.R. 1970 S.C. 685 370 different authorities  as in  Mulchand’s case (supra) 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.(1)   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’s case (supra). It may also be noticed that in Koteswar Vittal Kamath’s  case (supra) the ruling in the case of Firm A.T.B. Mehtab  Majid &  Co. (supra)  has been distinguished. The case  of State  of   Maharashtra  etc.  v.  The  Central Provinces   Manganese    Ore   Co.    Ltd.(2)    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  to the Governor-General all the  Court   distinguished  that  case  from  Tiwari’s  case (supra). 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.              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’s case (supra)       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. 1,000 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 1983-84 and auxiliary duty of 50% ad valorem  during   the  fiscal   year  1982-83.   They  would straigtaway 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. (1) [1969] 3 S.C.R. 40. (2) [1977] I S.C.R. 1002. 371       It is no doubt true that so me 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 the 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 very  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

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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 Custom Act, 1962 on and after March 1,  1981, the  Government should  be directed  to  re- examine the whole issue relating to the extant 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.       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 is these cases:       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 372 there should be any modification in the levy of customs duty or  A  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 auuiliary  duty and  shall not insist upon payment  of   duty   in   accordance   with   the   impunged 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.          The petitions are accordingly allowed. A.P.J.                                          Petitions allowed..

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