Hotels & Restaurants Can Sell Bottled Water Above MRP: SC

The Supreme Court ruled, on Tuesday, 12 December, that hotels and restaurants can sell bottled water and pre-packaged food above MRP, reports Hindustan Times.

According to the report, the bench, led by Justice Rohinton Nariman, dismissed the government’s pledge that overcharging for pre-packed or packaged products could be considered an offence under the Legal Metrology Act.

The report quoted advocate Sameer Parikh, appearing for the hoteliers’ association, as saying that the law does not apply as selling packaged drinking water or food “involves a service element, including ambience, cutlery and service”.

It is not a case of simple sale. Nobody goes to a hotel to buy or take away a bottle of mineral water.

The bench

The court’s statement came in response to an affidavit filed by the ministry of consumer affairs, which had said that selling bottled water and pre-packaged food above the MRP was a matter of worry for the government, the reports says.

“Sale of packaged water over MRP by hotels and restaurants may have implications regarding tax evasion as a bottle purchased by a hotel at cost price, which should be sold at MRP or less, is being sold at much higher prices, leading to possible loss of additional revenue to the government in the form of service tax or excise duty,” the ministry was quoted as saying.

The ministry had appealed to the Supreme Court to invoke Section 36 of the LMA, under which anyone caught selling, distributing or delivering any pre-packaged commodity that doesn’t abide by the declarations on the package, is entitled to pay a fine up to Rs 25,000 for the first offence, Rs 50,000 for second offence, up to Rs 1 lakh for subsequent offences, or be imprisoned for one year, reports ET Now.

What About Earlier Orders?

In March, Food and Consumer Affairs Minister Ram Vilas Paswan had said that he was receiving complaints regarding the over-priced sale of bottled water in different places like hotels, malls and airports.

Seeking answers from the company manufacturers pricing their products at different rates at different places he had said: “Mineral water bottle will be available at the same rate at airports, hotels and malls.”

In 2007, the Delhi High Court said that hotels and restaurants in the National Capital could not sell bottled mineral water above the MRP. Back then, the hoteliers’ association had challenged the order in court, reports Hindustan Times.

Eight years later, based on a government appeal, a division bench of the Supreme Court had ruled that the government could prosecute hotels and restaurants which were selling bottled water above the MRP. This too was challenged by the hotelier’s association in court, which led to the bench’s recent decision that persons doing so in the case of places like hotels and restaurants could not be prosecuted, reports Hindustan Times.

(With inputs from Hindustan Times and ET Now)