Greater Manchester Police seized more than 100 copies of the novel Lord Horror and an adult comic Meng and Ecker when they raided two bookshops for pornographic material in 1989.
The book and comic were stored separately from pornography, but last year the stipendiary magistrate decided both titles should be forfeited and destroyed under the 1959 Obscene Publications Act.
David Britton, author of Lord Horror, and Michael Butterworth, publisher and co-author, appealed yesterday to the Crown Court for the orders to be quashed. The court decided the novel was not obscene and should not be forfeited. But it upheld seizure of the comic for its 'glorification of racism and violence', more likely than the novel to attract the attention of readers who could be depraved and corrupted.
Later, a solicitor for Mr Butterworth, of Savoy Books, Manchester, said he was considering a further appeal.
Earlier, Geoffrey Robertson QC, for the appellants, said the comic and novel had been 'picked up in the trawl for items of real trash'. There was no prurient interest or titillation in either publication, which dealt with Nazism and the Holocaust.
In Lord Horror, the eponymous central character - based on William Joyce, the Nazi propagandist and traitor - seeks to meet Hitler in a series of adventures which take him from Burma to New York, via Manchester.
'We do not contend that Lord Horror is in that class of great literature that we might take to a desert island,' Mr Robertson said. But it could not possibly corrode the minds of readers, or meet any of the legal tests for material which could corrupt and deprave.
Mr Britton and Mr Butterworth had not been charged with any criminal offence.
Citing Kafka to Judge Gerard Humphries, sitting with two magistrates, Mr Robertson said the authors had tried to shock by wielding their pen like an ice-pick. Hitler's penis, a recurring theme in the novel, was a device to emphasise the grotesque in fascism. It first rears, gigantic and bored, on page six, when Hitler is bitten on the bottom by his penis during a lecture about surrealistic art, the Bauhaus and Nietzsche. 'It is absurdist writing,' Mr Robertson said.
Three expert witnesses said the book and comic were esoteric works of science fiction with an anti-racist message clear to their specialist readers.
Brian Williams, for the Crown Prosecution Service, said that the intention of the authors was not relevant to an assessment of whether material breached obscene publications law.
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