Sale of mineral water in hotels or restaurants, MRP provisions not applicable: SC

No Comments

Standards of Weights and Measures Act: Neither Standards of Weights and Measures Act, 1976 read with enactment of 1985, or Legal Metrology Act, 2009, would apply so as to interdict sale of mineral water in hotels and restaurants at prices which are above MRP

Section 2(b) of the Standards of Weights and Measures Act, 1976, read with rule 2(l) of the Standards of Weights and Measures (Packaged Commodity) Rules, 1977 – Commodity in Packaged Form – Controller of Weights and Measures sought to proceed against appellant, Federation of Hotel and Restaurant Associations for charging a price higher than printed MRP for supply of packaged water bottles during services provided to their customers while in hotels and restaurants – Appellant-association filed Writ Petition seeking a declaration that provisions of Standards of Weights and Measures Act, 1976, Standards of Weights and Measures (Enforcement) Act, 1985 and Standards of Weights and Measures(Packaged Commodities) Rules, 1977 were not applicable to services rendered in premises of hotels/restaurants as sale of food and drinks in hotels consisted of a composite contract and it was not possible to divide service element from sale clement – It was observed that Legal Metrology Act 2009 was enacted to do away with 1976 and 1985 Acts so as to combine said provisions into one enactment to make law simple, ensure accountability, and bring in transparency – However, even though 2009 Act had replaced 1976 Act, definition of ‘sale’ contained in 2009 Act remained same which would go to show that composite indivisible agreements for supply of services and food and drinks would not come within purview of either enactment.

Whether thus, neither Standards of Weights and Measures Act, 1976 read with enactment of 1985, or Legal Metrology Act, 2009, would apply so as to interdict sale of mineral water in hotels and restaurants at prices which are above MRP – Held, yes [In favour of assessee]

Citation: [2018] 89 taxmann.com 384 (SC)