Indian Express Newspapers (Bombay) Pvt Ltd v Union of India

The case of Indian Express Newspapers (Bombay) Pvt. Ltd. v Union of India is a landmark judgement in Indian constitutional law that addresses the delicate balance between press freedom and governmental taxation policies. The Supreme Court of India, in its decision, upheld the right of the government to impose taxes on newsprint but clarified that such taxation should not be excessive or restrictive to the freedom of the press. This case played a pivotal role in defining the limits of governmental regulation over the media and remains a crucial precedent in press law jurisprudence.

Facts of Indian Express Newspapers (Bombay) Pvt Ltd v Union of India

Before 1981, newsprint was exempt from customs duty in India. However, through the Customs Tariff Act, 1975 and the Finance Act, 1981, the Government of India imposed import and auxiliary duties on newsprint. The petitioners, including Indian Express Newspapers (Bombay) Pvt. Ltd., argued that the imposition of these duties significantly increased the cost of newspapers, leading to a decline in circulation. The reduction in readership, they contended, was a direct threat to the freedom of speech and expression guaranteed under Article 19(1)(a) of the Indian Constitution.

The petitioners further argued that the classification of newspapers into small, medium, and large categories for taxation purposes was arbitrary and violated Article 14 (Right to Equality). They claimed that the tax was designed to suppress the free press rather than serve any genuine public interest. The respondents (Government of India), on the other hand, defended the tax, asserting that it was necessary for revenue generation and that newspapers should not be exempt from taxation simply because they were instrumental in disseminating information.

Legal Issues

The Supreme Court of India had to address two primary issues in Indian Express Newspapers (Bombay) Pvt. Ltd. vs Union of India:

1. Whether the imposition of import duties on newsprint violated the right to freedom of speech and expression under Article 19(1)(a) of the Constitution.
2. Whether the classification of newspapers based on size for tax purposes violated Article 14 of the Constitution.

Arguments of the Petitioners

1. The taxation on newsprint led to an increase in newspaper prices, which resulted in a decrease in circulation. This, in turn, affected the public’s access to information, thereby infringing on Article 19(1)(a).
2. The classification of newspapers based on circulation for tax purposes was arbitrary and discriminatory, violating Article 14.
3. The introduction of the tax was an attempt to control the press by making newspapers economically unviable, thus suppressing free speech indirectly.
4. The petitioners relied on Sakal Papers Ltd. v. Union of India (1962) and Bennett Coleman & Co. v. Union of India (1972) to argue that economic measures that indirectly restrict press freedom are unconstitutional.

Arguments of the Respondents

1. The government argued that the power to levy taxes was inherent and that newspapers, like any other industry, should contribute to public revenue.
2. The exemption of newsprint from customs duty was not a constitutional right, and removing such an exemption did not amount to a violation of Article 19(1)(a).
3. The classification of newspapers based on circulation size was justified because smaller newspapers had limited access to advertising revenue and needed tax relief, whereas larger newspapers had greater financial strength.
4. The petitioners failed to provide evidence that the taxation was the direct cause of decreased circulation.

Indian Express Newspapers (Bombay) Pvt Ltd v Union of India Judgement 

The Supreme Court, in its ruling on Indian Express Newspapers (Bombay) Pvt. Ltd. versus Union of India, upheld the government’s right to impose taxes on newspapers but stated that such taxes must be reasonable and should not infringe on press freedom. The Court noted the following:

1. Freedom of the press is fundamental, but it does not provide immunity from taxation. A tax does not automatically violate Article 19(1)(a) unless it is shown to be oppressive.
2. The burden of proving that the tax was excessive and restrictive was on the petitioners, and they failed to establish a direct causal link between the tax and the decline in newspaper circulation.
3. The classification of newspapers based on circulation size was found to be reasonable and justified under Article 14, as it aimed to support smaller publications.
4. The Court did not strike down the tax but directed the government to reconsider its taxation policy within six months, ensuring that it did not unduly burden the newspaper industry.

Conclusion

The case of Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India serves as a seminal judgement on the intersection of economic policy and press freedom. The ruling recognised the government’s authority to levy taxes while simultaneously protecting the press from unreasonable financial burdens. By directing the government to reconsider its taxation policy, the Court ensured that economic measures should not be used as a tool to suppress press freedom.