TaxTMI 
TaxTMI 
2002 (11) TMI 88
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....blishing newspapers including The Hindustan Times. Petitioner No. 2 is a shareholder of petitioner No. 1 and petitioner No. 3 is its director. The petitioners have questioned the legality/validity of the said orders, inter alia, on the following grounds: 1. The impost, is not leviable either as a tax or as a fee having regard to the fact that the legislative field in relation to the payment of retiral benefits to the working journalists is covered by a Parliamentary Act known as the Working journalists and other Newspapers Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 ("the said Act"). 2. As the State of Uttar Pradesh had no legislative competence, it could not have issued the impugned orders in exercise of its power under article 162 of the Constitution of India or otherwise. 3. Assuming, that the welfare of the working journalists is a field falling within entry 24 of List III of the Seventh Schedule of the Constitution of India, any State legislation would be subject to the Central legislation and in that view of the matter too, the impugned orders are ultra vires article 14 of the Constitution. The contention of the respondents, on the other....
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....period he will have to contribute cent percent instalments. If he returns to Uttar Pradesh then from the date of his return to Uttar Pradesh he will be entitled to get 50 percent contribution from the Government." By a letter dated October 16, 1991, the Special Secretary of the first respondent communicated the following to the Director, Information and Public Relations Department, Uttar Pradesh (Press Division)/Advertisement Division, Lucknow: "On the above subject drawing your attention to para. 5 of the Government Order No. 460/Nineteen-1-91-32/77, dated September 24, 1991, I have been directed to state that for the implementation of the scheme the Governor sanctions the deduction of 5 percent from bills for publicity/tender advertisement of those papers/journals, besides the specified newspapers whose circulation is over 25,000. The said Government order will be deemed to be amended." Pursuant to or in furtherance of the said communication, 5 percent of the amount from the advertisement bill of the petitioners was deducted. Admittedly, the petitioner objected thereto. However by a letter dated April 9, 1992, the editor/in charge advertisement of information and public....
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....newspaper employees by virtue of section 2(g) of the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, there was some hesitation as to whether provision of pension fell within the jurisdiction of the Wage Boards, the Wage Boards on a thorough consideration of the question took a view that it did. Accordingly, the questionnaire issued by the Wage Boards and its subsequent proceedings continued to abide by this decision till the Finance Minister in his Budget Speech on 29th February, 1988, came out with the following announcement: "Working journalists have contributed a lot to the country by their intellectual toil, and should be considered by Parliament to provide a reasonable pension scheme for them. Government will be taking appropriate steps in this direction after consulting all concerned". 6.91. This was followed by the appointment of an Expert Group by the Government 'to go into the question of providing a pension scheme for journalists as well as non-journalist employees of newspaper establishment'. Thus the scope got extended to non-journalists newspaper employees as well. 6.92. The above-mentioned budget ....
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....f the working journalists, must be held to be bad in law. As the said Act, as also the Bachawat Award specifically deal with the matter relating to pension scheme for journalists, we have no hesitation in holding that the impugned orders were beyond the legislative competence of the State. In Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd. [1984] 65 FJR 61 (SC); [1984] 3 SCR 325, it was held that the pension and gratuity are well known measures of social security. It was observed that the employer cannot have an absolute discretion not to pay any gratuity even when it is earned. It is not the contention of the respondents that the State had been delegated with any power to levy tax or impose any fee. Article 162 of the Constitution is subject to the other provisions contained therein. By reason of the impugned directives of the State, the petitioners have been deprived of their right to property. The expression "law, within the meaning of article 300A, would mean a Parliamentary Act or an Act of the State Legislature or a statutory order having the force of law: In Bishamber Dayal Chandra Mohan v. State of Uttar Pradesh, AIR 1982 SC 33; [1982] 1 SCC 39, this court hel....
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.... has observed that even if a State in exercise of its legislative power under entry 23, List III of the Seventh Schedule of the Constitution of India can make a welfare legislation, yet the burden of the impost cannot be placed upon a person who is neither the member of the society nor the employer of a person who is member of such society. It was held that: "There can be no doubt that entry 23 enables the State Legislature to enact a law in respect of social security and social insurance or dealing with employment and unemployment. The provisions of sub-section (4) of section 3 of the Act (quoted above) postulate social security and welfare measures for the fishermen. The State can, therefore, justify its competence under this entry. But, in our view, the State cannot in an Act under entry 23 of List III, place the burden of an impost by way of contribution for giving effect to the Act and the Scheme made thereunder for the social security and social welfare of a section of society upon a person who is not a member of such section of society nor an employer of a person who is a member of such section of society. The burden of the impost may be placed only when there exists the r....
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....r to raise its price. Raising the price further would affect the circulation still more and thus a vicious cycle would set in which would ultimately end in the closure of the newspaper. If, on the other hand, the space for advertisement is reduced the earnings of a newspaper would go down and it would either have to run at a loss or close down or raise its price. The object of the Act in regulating the space for advertisements is stated to be to prevent 'unfair' competition. It is thus directed against circulation of a newspaper. When a law is intended to bring about this result there would be a direct interference with the right of freedom of speech and expression guaranteed under article 19(1)(a)" Advertisements in a newspaper have a direct nexus with its circulation. In Tata Press Ltd. v. Mahanagar Telephone Nigam Ltd., AIR 1995 SC 2438; [1995] 5 SCC 139, it was held as under: "20. Advertising is considered to be the cornerstone of our economic system. Low prices for consumers are dependent upon mass production, mass production is dependent upon volume sales, and volume sales are dependent upon advertising. Apart from the lifeline of the free economy in a democratic countr....
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....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... 45. It is indisputable that by freedom of the press is meant the right of all citizens to speak, publish and express their views. The freedom of the press embodies the right of the people to read. The freedom of the press is not antithetical to the right of the people to speak and express." It is neither in doubt nor in dispute that for the purpose of meeting the costs of the newsprint as also for meeting other financial liabilities which would include the liability to pay wages, allowances and gratuity, etc., to the working journalists as also liability to pay a reasonable profit to the share holders vis-a-vis making the newspapers available to the readers at a price at which they can afford to purchase it, the petitioners have no other option but to col....