Case: Federation of Hotel &amp; Restaurant Associations of India Vs. Union of India &amp; Others

combine the said provisions into one enactment so as to make the law simple, ensure accountability, and bring in transparency. The statement of objects and reasons for the 2009 Act reads as follows:-"STATEMENT OF OBJECTS AND REASONSIn India, uniform standards of weights and measures based on the metric system, were established in the year 1956, which were revised in the year 1976 with a view to give effect to the international system of units. Apart from it, the Standards of Weights and Measures Act, 1976 provides for establishing Standards of Weights and Measures, regulation of inter-State trade or commerce in weights and measures and other goods which are sold by weight, measure or number. In the year 1985, the Standards of Weights and Measures (Enforcement) Act, 1985 was enacted for enforcement of standards of weights and measures established by or under the 1976 Act.2. The advancement of technology has necessitated the review of above mentioned enactments to make them simple, eliminate obsolete regulations, ensure accountability and bring transparency.3. It has become imperative to combine the provisions of the existing two Acts to get rid of anomalies and make the provisions simple. It has also become necessary to keep the regulation pragmatic to the extent required for protecting the interest of consumers and at the same time keep the industry free from undue interference. It has also become necessary to recognise certain "Government approved Test Centres" which will be empowered to verify prescribed weights or measure.4. The Bill, inter alia, provides for,-(a) regulation of weight or measure used in transaction or for protection;(b) approval of model or weight or measure;(c) verification of prescribed weight or measure by Government approved Test Centre;(d) prescribing qualification of legal metrology officers appointed by the Central Government or State Government;(e) exempting regulation of weight or measure or other goods meant for export;(f) levy of fee for various services;(g) nomination of a Director by a company who will be responsible for complying with the provisions of the enactment;(h) penalty for offences and compounding of offences;(I) appeal against decision of various authorities; and(j) empowering the Central Government to make rules for enforcing the provisions of the enactment." 13. On a reading of the said Act and the Rules made thereunder, it is clear that the position qua "sale" remains exactly the same as that contained in the 1976 Act, which now stands repealed. This being the case, we are of the view that the learned Single Judge was absolutely correct in his conclusion that despite the constitutional amendment having been passed, the definition of "sale" contained both in the 1976 Act and now in the 2009 Act would go to show that composite indivisible agreements for supply of services and food and drinks would not come within the purview of either enactment, and that this is for the very good reason that the object for both these enactments is something quite different - the object being, as has been pointed out above, to standardize weights and measures for defined goods so that quantities that are supplied are thus mentioned on the package and that MRPs are mentioned so that there is one uniform price at which such goods are sold. 14. Mr. Sinha, learned Senior Counsel, however, has argued before us that given the fact that learned Senior Counsel on behalf of the appellant had made a concession before the Division Bench, we should not interfere with the said judgment. It is settled law that any such concession made on a question relating to jurisdiction to proceed further, particularly qua criminal prosecutions, does not bind the party in question. It is of utmost importance for all to know exactly how they stand in such cases. Also, Mr. Sinhas reliance upon Section 2(l) of the 2009 Act read with Rule 3 of the Rules does not take us very much further. Section 2(l) of the 2009 Act reads as follows:- "(l) "pre-packaged commodity" means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre-determined quantity;" 15. A cursory reading of the aforesaid definition would show that it refers only to the fact that a pre-packaged commodity should have a pre-determined quantity as stated in the definition section. It has no bearing whatsoever on the issue before us. Equally, reliance upon Rule 3 of the 2011 Rules again does not lead us anywhere. Rule 3 of the said Rules read as follows:- "3. Applicability of the Chapter.- The provisions of this Chapter shall not apply to,-(a) packages of commodities containing quantity of more than 25 kg or 25 litre excluding cement and fertilizer sold in bags up to 50 kg; and(b) packaged commodities meant for industrial consumers or institutional consumers.Explanation.- For the purpose of this rule,-(i) "institutional consumer" means the institutional consumer like transportation, Airways, Railways, Hotels, Hospitals or any other service institutions who buy packaged commodities directly from the manufacturer for use by that institution;(ii) "industrial consumer" means the industrial consumer who buy packaged commodities directly from the manufacturer for use by that industry." 16. Mr. Sinha relied upon the definition of institutional consumer contained in explanation (i) in order to show that hotels, in particular, would be under the coverage of the Act read with the Rules. First and foremost, a reading of the opening of Rule 3 would show that the provisions of the Chapter would not apply to packaged commodities meant for institutional consumers such as hotels. Also, the Rules cannot take us very much further when it has already been held by us that the Act itself would not apply for the reasons given herein above.17. We are, therefore, of the view that neither the Standards of Weights and Measures Act, 1976 read with the enactment of 1985, or the Legal Metrology Act, 2009, would apply so as to interdict the sale of mineral water in hotels and restaurants at prices which are above the MRP.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Since it is not possible to divide the "service element", which is the dominant element, from the "sale element", it is clear that such composite contracts cannot be theof sales tax legislation, as was held in thosereading of the constitutional amendment would show that supply by way of or as part of any service of food or other article for human consumption is now deemed to be a sale of goods by the person making the transfer, delivery or supply.On a reading of the said Act and the Rules made thereunder, it is clear that the position qua "sale" remains exactly the same as that contained in the 1976 Act, which now stands repealed. This being the case, we are of the view that the learned Single Judge was absolutely correct in his conclusion that despite the constitutional amendment having been passed, the definition of "sale" contained both in the 1976 Act and now in the 2009 Act would go to show that composite indivisible agreements for supply of services and food and drinks would not come within the purview of either enactment, and that this is for the very good reason that the object for both these enactments is something quite differentthe object being, as has been pointed out above, to standardize weights and measures for defined goods so that quantities that are supplied are thus mentioned on the package and that MRPs are mentioned so that there is one uniform price at which such goods areshould not interfere with the said judgment.It is settled law that any such concession made on a question relating to jurisdiction to proceed further, particularly qua criminal prosecutions, does not bind the party in question. It is of utmost importance for all to know exactly how they stand in such cases.A cursory reading of the aforesaid definition would show that it refers only to the fact that acommodity should have aquantity as stated in the definition section. It has no bearing whatsoever on the issue beforeand foremost, a reading of the opening of Rule 3 would show that the provisions of the Chapter would not apply to packaged commodities meant for institutional consumers such as hotels. Also, the Rules cannot take us very much further when it has already been held by us that the Act itself would not apply for the reasons given herein above.17. We are, therefore, of the view that neither the Standards of Weights and Measures Act, 1976 read with the enactment of 1985, or the Legal Metrology Act, 2009, would apply so as to interdict the sale of mineral water in hotels and restaurants at prices which are above the MRP.