INDIAN EXPRESS NEWSPAPERS BOMBAY PRIVATE LIMITED BENNETT COLEMAN AND COMPANY LIMITED STATESMAN LIMITED KASTURI AND SONS LIMITED ANANDA BAZAR PATRIKA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE majority of petitioners in these petitions filed under Art. 32 of the Constitution are certain companies, their shareholders and their employees engaged in the business of editing, printing and publishing newspapers, periodicals, magazines etc. Some of them are trust or other kinds of establishments carrying on the same kind of business. THEy consume in the course of their activity large quantities of newsprint and it is stated that 60% of the expenditure involved in the production of a newspaper is utilised for buying newsprint, a substantial part of which is imported from abroad. THEy challenge in these petitions the validity of the imposition of import. duty on newsprint imported from abroad under S. 12 of the Customs Act, 1962 (Act 52 of 1962) read with S. 2 and Heading No. 48.01/21 Subheading 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 S. 25 of the Customs Act, 1962 with effect from 1/03/1981.

(2.) THE first set of writ petitions challenging the above levy was filed in May, 1981. At that time under the Customs Act, 1962 read with the Customs Tariff Act, 1975 customs duty of 40% ad valorem was payable on newsprint. Under the Finance Act, 1981 an auxiliary duty of 30% ad valorem was payable in addition to the customs duty. But by notifications issued under S. 25 of the Customs Act, 1962 the customs duty had been reduced to 10% ad valorem and auxiliary duty had been reduced to 5% ad valorem in the case of newsprint used for printing newspapers, books and periodicals.

(3.) 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 no power to exempt and that it has to carry out the mandate of Parliament which has fixed the rate of duty by the Customs Tariff Act, 1975. It is also claimed that the classification of newspapers for purposes of granting exemption is done in the public interest having regard to the relevant considerations. It is denied that the levy suffers from any mala fides. It is pleaded that since every section of the society has to bear its due share of the economic burden of the State, levy of customs duty on newsprint cannot be considered to be violative of Art. 19(1)(a) of the Constitution. But regarding the plea of the petitioners that the burden of taxation is excessive the counter-affidavit states that the said fact is irrelevant to the levy of import duty on newsprint. In reply to the allegation of the petitioners that there was no valid reason for imposing the duty on the foreign exchange position was quite comfortable, the Union Government has stated that the fact that the foreign exchange position was comfortable was no bar to the imposition of import duty. It is further pleaded that since the duty imposed is an indirect tax which would be borne by the purchaser of newspaper, the petitioners cannot feel aggrieved by it.