Indian Express Newspapers v. Union of India (1984)

Case details

Case name: Indian Express Newspapers (Bombay) Pvt. Ltd. & Ors. v. Union of India & Ors.

Court: Supreme Court of India

Judgment date: 6 December 1984

Citation: (1985) 1 SCC 641, AIR 1986 SC 515

Judges: Justices E.S. Venkataramiah, O. Chinnappa Reddy & A.P. Sen, JJ.

Introduction

The Indian Express Newspaper v. Union of India is one of the landmark judgments regarding Freedom of speech and expression covered in Article 19(1)(a) of the Indian Constitution. This case revolves around the freedom of media, the fourth pillar of democracy. It balances the State’s power to impose tax against constitutionally protected freedom of speech and expression.

This article deals with the facts of the case, the issue involved, the arguments put forth by the parties and the judgment of the case with the reasoning involved.

Facts of the case

During the year of 1985, import duties and auxiliary duties were imposed on the newspaper imported from abroad. Rates were modified through notifications issued under Section 25 of the Custom Act. Newspaper publishers, including, Indian News Express, depended heavily on imported newsprint for publishing newspaper. A substantial part of producing newspaper attributed to newsprint. Hence, due to increased tax, publishers had to increase the price of the newspaper which in turn led to decrease in circulation. This led to fall in the revenue of the Company. Hence, a petition was filed before Supreme Court.

Issue before the Court

1. Whether delegated legislation, such as the notification issued under the Customs Act, could be struck down if it violated fundamental rights?
2. Whether freedom of press is protected under Article 19(1) (a)?
3. Whether classification of newspaper for the purpose of taxation violative of Article 14?

Arguments of the petitioners

1. The petitioners argued that the duties imposed by the Government led to decrease in the circulation of the newspaper and hence, was violative of their freedom of speech and was contrary to the spirit of Constitution.
2. They argued that the differential tax treatment and classification of newspaper companies into big, medium and small was arbitrary and discriminatory. They also argued that it violatived their right under Article 14 of the Indian Constitution.
3. It was also mentioned that the import duties were violative of their right to trade under Article 19(1) (g) of the Indian Constitution.

Arguments of the Respondents

1. The government contented that the tax levied was a part of the general fiscal policy of the government hence was in the view of public interest in order to raise the revenue of the government.
2. They argued that the duty imposed by the government was reasonable as the government had duty to impose tax.
3. It was contented that the duty imposed was an indirect tax which was meant to be paid by the purchasers, hence, no right of the petitioners was violated.
4. The classification of newspaper companies into big, small and medium was in public interest as per the considerations. Hence, not violative of article 19(a).

Judgment of the case

The Supreme Court in the case of Indian Newspaper Express v. Union of India held that the imposition of taxes on newsprint is not violative of their right to speech and expression. The Court tried to strike a balance between Article 19(1)(a) and imposition of tax. It was stated that the tax should be reasonable and should not create burden on the Company. Therefore, the Supreme Court ordered the Central Government to reconsider their taxation policy being imposed on newspapers.

Reasoning of the judges

In respect of Article 19(1) (a) – The petitioners were of the view that media enjoy freedom of speech and expression arising from their right to know. Also, the way in which the tax was imposed as per the Custom Act, led to increase in executive interference. They also contented that imposition of taxes was unreasonable as newspapers were exempted from taxation till 1985.

In this regard, the Supreme Court was of the opinion that the newspaper industry was not expressly exempted from taxation under Entry 92 list 1 of the Seventh Schedule. The Supreme Court took reference from the first amendment of the American Constitution and stated that even though in the USA right to freedom is absolute, yet it wasn’t crippled by the imposition of taxes on newspapers. The Court contented that it is true, that tax cannot be imposed if it affects freedom of speech and expression, but it can be imposed on freedom of occupation, trade and business of the newspapers.

The taxes imposed should be reasonable and should not burden the Companies. They should not violated the restrictions mentioned in Article 19(2). It they do, then those taxes will be held unconstitutional.

The Supreme Court highlighted the importance of freedom of speech of the media and observed that the Government should be cautious while imposing taxes on newspaper industry.

In respect of Article 14- For the purpose of imposition of taxes the government classified the newspaper companies into small, medium and big companies. The classification was based on number of circulation of newspapers by the companies. If a newspaper company circulated less than 15,000 newspaper or was considered a small company and was exempted from payment of taxes. It a company circulated newspapers between 15,000 to 50,000 it was considered medium-size company and it had to pay 5℅ ad valorem. Similarly, if a company circulated newspapers more than 50,000 it was considered big company and had to pay full custom duty which was 15℅ ad valorem.

It was contented by the Supreme Court that the reason for such difference in taxes was to decrease the cost of production of small and medium newspaper companies. Such companies have no large advertisement revenue and their circulation is limited. Majority of such industries are for rural sector. Hence, such classification will promote rural readership which will directly affect their literacy.

Also, in regard to the classification being violative of Article 14, it was stated that this Article allows reasonable classification for the benefits of disadvantaged groups in order to achieve some objective. Such classification should be reasonable and have a rational nexus to the object of classification. Also, the object should be lawful. In this case, there was no sinister in the object of classification. There was reasonable nexus with the object sought to be achieved. Hence, such classification was not violative of Article 14 of the Indian Constitution.

Significance of the Case

The Indian Express Newspapers v. Union of India is a landmark case in regard to importance of press. It highlighted the need of free media in growing times and seperated it from a mere ordinary commercial activity. The Hon’ble Court held that “the freedom of press is the heart of the social and political intercourse.”

The Court contented the importance of a balanced approach and stated that State should exercise their fiscal powers while remaining conscious of their impact of constitutionally protected freedoms. The Court also stated that delegated legislation and executive action should remain subject to constitutional scrutiny.

Conclusion

The judgment of this case is best understood not as a case granting immunity to newspaper companies but as a decision defining Constitutional boundaries within which State must regulate. This case revolves around Article 14 and Article 19 and gives an example of practical applicability of the reasonable classification test and reasonable restrictions under Article 19(2), respectively. This case occupies an important place in the Indian Constitutional Jurisprudence as it serves a balance between rights of press and duty of government to levy taxes.

References

1. Indian Express Newspaper v. Union of India (1984)  https://indiankanoon.org/doc/223504/
2. The Custom Act, 1962, S 13(2).
3. Customs Tariff Act, 1975.
4. Indian Constitution, art 19(1)(a), 19(1)(g), (19)(2), & 14.
5. Romesh Thappar v. State of Madras.
6. https://lawarticle.in/romesh-thappar-v-state-of-madras-1950/
7. Bennet Coleman Company v. Union of India (1972)
8. Sakal Paper limited v. Union of India (1961)
9. Brij Bhushan v. State of Delhi (1950)