2015 (3) TMI 896 - HC - Indian Laws

Refusal of tax concession by State to a film on the ground that the film is based on a controversial subject of homosexuality - does the State policy granting such concession to all Gujarati films barring those excepted in the policy itself would permit the authority to exercise such power in the present case - Held that - First the initial hesitation of the Commissioner of Entertainment Tax in granting exemption was that the film had received A certificate. That is how he issued the first notice calling upon the petitioner why on such ground exemption should not be refused. This ground was neither germane nor flowing from the Government policy. Merely because a film is certified by the Censor Board for being viewed by audience not below the age of 18 years, would not mean that it falls in any of the categories mentioned in para 4. The Commissioner thus laboured under a complete misconception in this regard. Wisely and rightly, therefore, he quickly dropped this objection. There is no prohibition against exhibiting this film. In any case, the Commissioner of Entertainment Tax was not controlling exhibition of the film in different cinema halls in the State or outside. He was only called upon to judge whether the film should receive tax concession or not. Even without tax concession, the producer could as well have exhibited the film in different cinema halls. His conclusion that the film will lead to friction is not based on any material. He has not referred to any data to establish this conclusion. Further, his task was to decide application for tax exemption and the question of law and order was not within his purview. Neither Home Department nor the police authorities seem to have suggested to him that they will not be able to manage law and order situation if the film is granted tax exemption. Right to freedom of speech and expression guaranteed under article 19(1) of the Constitution is zealously guarded by the constitutional courts. A film is considered a powerful tool for expressing one's ideas and thoughts. Any restriction on such right if not authorized under clause (2) of article 19 must be struck down. If we accept this proposition that the petitioner has right to freedom of speech and expression through making and exhibiting a film on a topic of his choice, any restriction on such right must be reasonable and backed by authority of law for the grounds stated in article 19(2) of the Constitution. One may argue in the present case that exhibition of the film is not prohibited and only tax concession is denied. Even this will seriously restrict the petitioner's right to freedom of expression. When all other Gujarati colour films barring small exceptions noted are being granted tax exemption, insisting the petitioner to exhibit his film in the market after paying full entertainment tax would severely restrict the audience of the film. This would be a serious affront on the petitioner's right to freedom of speech and expression. Unreasonable or excessive tax on media is considered one of the facets of denying the rights under article 19(1) of the Constitution as held by the Supreme Court in the case of Indian Express Newspapers (Bombay) P. Ltd. v. Union of India 1984 (12) TMI 65 - SUPREME Court . In the said case, the court was considering the challenge to a notification issued by the Central Government under section 25(1) of the Customs Act withdrawing certain exemptions to import of newsprint used for publication of newspapers. Court only recognize the right of a film maker to make a film on the topic and exhibit the same as long as it does not offend the restrictions envisaged in clause (2) of article 19 of the Constitution and to seek and insist on getting tax exemption if the film falls within the prescribed criteria laid down by the Government in its policy declaration and not be denied the same merely because the subject is controversial. The issue perhaps embarrasses some members of the society and is talked in hushed whispers, that however would not mean that it falls in the categories mentioned in para 4 of the Government policy. A controversial subject is different from a controversial film and the film being controversial and a film being objectionable are yet two different aspects. All in all, from the dialogues mentioned by the Commissioner as objectionable, we can safely conclude that the objections were wholly misguided based on fallacious premises. His role was not that of the Censor Board. His conclusions thus were erroneous. - Decided in favour of Appellant.

Summary

Issues Involved:
1. Freedom of Speech and Expression
2. Tax Exemption Policy for Gujarati Films
3. Reasonableness of Government Restrictions
4. Discrimination under Article 14 of the Constitution
5. Interpretation of Section 377 of the Indian Penal Code
6. Law and Order Concerns

Issue-wise Detailed Analysis:

1. Freedom of Speech and Expression:
The judgment underscores the importance of freedom of speech and expression, as guaranteed under Article 19(1)(a) of the Constitution. The court emphasizes that various forms of expression, including film making, are protected under this right. The petitioner argued that denying tax exemption would amount to a serious restriction on his right to freedom of speech and expression. The court agreed, noting that any restriction on this right must be reasonable and backed by authority of law as specified in Article 19(2).

2. Tax Exemption Policy for Gujarati Films:
The court examined the state government's policy for granting 100% tax exemption to Gujarati films, which excludes films depicting evil customs, blind faith, sati, dowry, and those against national unity. The petitioner contended that his film did not fall under any of these exceptions. The court found that the Commissioner's reasons for denying tax exemption, such as the film's controversial subject and its "A" certificate, were not valid grounds under the policy. The court held that the film did not fall into any of the excluded categories and should therefore be granted tax exemption.

3. Reasonableness of Government Restrictions:
The court scrutinized the Commissioner's objections to the film, including its controversial subject and the potential for law and order issues. It found these objections to be based on personal opinions rather than the criteria set out in the government's policy. The court cited the Supreme Court's ruling in S. Rangarajan v. P. Jagjivan Ram, which held that freedom of expression cannot be suppressed unless it poses a direct and immediate threat to public order. The court concluded that the Commissioner's concerns were speculative and not supported by any concrete evidence.

4. Discrimination under Article 14 of the Constitution:
The petitioner argued that denying tax exemption to his film while granting it to other similarly situated films amounted to hostile discrimination, violating Article 14 of the Constitution. The court agreed, stating that the government's policy was to grant tax exemption to all Gujarati films except those falling under specific exceptions. Denying exemption to the petitioner's film, which did not fall under any of these exceptions, was discriminatory and violated the principle of equal treatment.

5. Interpretation of Section 377 of the Indian Penal Code:
The respondent argued that the film promoted an activity punishable under Section 377 of the IPC, which criminalizes unnatural carnal intercourse. The court noted that the constitutionality of Section 377 had been upheld by the Supreme Court but clarified that this did not automatically make the film objectionable under the government's tax exemption policy. The court emphasized that the film's subject matter did not fall into any of the categories excluded from tax exemption.

6. Law and Order Concerns:
The Commissioner argued that the film could create law and order problems. The court dismissed this argument, stating that maintaining law and order is the responsibility of the state and cannot be used to curtail freedom of expression unless there is a direct and immediate threat. The court found no evidence to support the claim that the film would cause such issues and noted that the film could still be exhibited even without tax exemption.

Conclusion:
The court concluded that the Commissioner's decision to deny tax exemption was based on erroneous grounds and personal opinions rather than the criteria set out in the government's policy. It directed the respondent to grant the necessary tax exemption to the film, emphasizing the importance of upholding the petitioner's right to freedom of speech and expression. The petition was allowed, and the respondent was instructed to issue the tax exemption certificate by March 31, 2014.