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Central government has told the Supreme Court that the management of restaurants, hotels, multiplexes etc shall be imposed penalty or jail term for selling mineral water over and above its Maximum Retail Price (MRP).
The government has said that the sale of water above the MRP is not only against the interest of consumers but has also led to tax evasion. The government further said that the bottled water is purchased at the cost price by the restaurants which is required to be sold at MRP or less but is being sold at the much higher price than MRP. This selling at the higher price may lead to possible loss in the revenue of government in form of sales tax or excise duty.
Ministry of Consumer Affairs in its affidavit in response to the petition filed by the Federation of Hotel and Restaurant Associations of India (FHRAI) submitted that the high pricing of bottled mineral water is against the provisions and is an offence under the Legal Metrology Act.
As per the Section 36 of the Legal Metrology Act anyone who is caught selling, distributing or delivering any pre-packaged commodity against the declarations of the package shall be liable to fine of upto Rs. 25,000 for first instance of offence. If the offence is committed second time the fine will be upto Rs. 50,000 and the fine can be increased to Rs. 1 lakh or imprisonment of one year or both for subsequent offence.
The petition was filed by the FHRAI against the order of Delhi High Court. In August, 2015 the HC upheld the initiation of prosecution by the government authority against the selling of mineral water above the MRP by the restaurants under the act of 2009.
It was further ordered by the division bench of the HC that the order by the single bench of HC allowing the over charging of bottled mineral water by the restaurants on the ground that the customer essentially visits a restaurant to enjoy the ambiance and air conditioning will not be a precedent.
The review petition by the FHRAI was rejected by the High Court forcing the FHRAI to file the instant petition before the supreme court. To which the counter affidavit has been filed by the Ministry of Consumer Affairs stating its intentions to prosecute against the restaurants.
Ministry stated that the issue of over charging of the price of water is a serious one and the public, consumers and Members of Parliament has submitted various complaints and representations regarding the same.
The brand value of Bajaj, Aquafina, Kinley and other brands is indirectly being enjoyed by the restaurants and hotels and therefore overcharging of such brands by the restaurants and hotels shall not be permitted.
Ministry further stated that when a prepackaged bottled water is opened in front of the consumer then it should declare its contents regarding the quality, manufacturing date etc. to assist the consumer in making a decision.