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2014 (12) TMI 1303 - SC - Indian LawsScope of Cigarettes Act and the Rules - Hookah smoking - smoking area dimensions - whether the impugned circular dated 4th July, 2011 travels outside the Cigarettes Act and the Rules or merely seeks to implement the said Act and the Rules as they stand? - Held that - Section 6 of the Cigarettes Act permits the sale of cigarettes and any other tobacco products, except to persons under 18 years of age and in an area within a radius of 100 yards of any educational institution. It is clear that any condition which prohibits the sale of cigarettes or any other tobacco products in premises licenced by the Municipal Corporation would amount to adding another exception which would be impermissible in law. Scope of the word sale and service - case of Revenue is that the sale of tobacco or tobacco related products would amount to a service that cannot be so allowed - Held that - the definition of tax on the sale or purchase of goods has been artificially expanded more particularly by sub-clause (f), with which we are concerned, where the distinction between sale and service has been done away with. In the present case, the well established distinction between sale and service would continue to apply in view of the definition of sale contained in Section 3(m). It will be noticed that the definition is a means and includes one. It is well settled that such definition is an exhaustive definition. There is thus, no scope to include service in such a definition - even if we were to accept Mr. Bhatt s contention, Rule 4(3) would become ultra vires Section 6 of the Act inasmuch as it would prohibit the sale of cigarettes and other tobacco products in a smoking area in hotels, restaurants and airports, thus, adding one more exception to the two exceptions already contained in Section 6. It is, thus, clear that this condition would be ultra vires the Cigarettes Act and the Rules properly so read. Rule 3(1)(c) and Rule 4(3) have to be harmoniously construed - What is expressly allowed by Rule 4(3) cannot be said to be taken away by Rule 3(1)(c). Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Validity of the Municipal Corporation's circular prohibiting the sale and provision of tobacco products in licensed premises. 2. Interpretation of the Cigarettes and other Tobacco Products Act, 2003 (Cigarettes Act) and its rules. 3. Legality of prohibiting hookah in smoking areas. 4. Dimensions and regulations of smoking areas in licensed premises. 5. Validity of notices and orders issued by Municipal Corporations and Police Commissioners under various statutes. Issue-Wise Detailed Analysis: 1. Validity of the Municipal Corporation's Circular: The primary contention was whether the Municipal Corporation's circular dated 4th July 2011, which imposed conditions on the sale and provision of tobacco products in licensed premises, was ultra vires the Cigarettes Act and its rules. The court found that the first paragraph of Condition No. 35, which prohibited the sale or provision of tobacco products in licensed premises, was contrary to Section 6 of the Cigarettes Act. Section 6 allows the sale of tobacco products except to minors and within 100 yards of educational institutions. Thus, the circular added an impermissible exception, rendering it ultra vires. 2. Interpretation of the Cigarettes Act and Its Rules: The court examined whether the impugned circular merely implemented the Cigarettes Act and the Rules or exceeded them. The court highlighted that the Cigarettes Act was enacted to implement World Health Assembly Resolutions and Article 47 of the Constitution, focusing on public health and banning tobacco advertisements. The court concluded that the circular's prohibition on the sale of tobacco products in licensed premises was not supported by the Act or the Rules. 3. Legality of Prohibiting Hookah in Smoking Areas: Condition No. 35(C) of the circular, which prohibited any apparatus designed to facilitate smoking, including hookahs, was challenged. The court found that Rule 4(3) of the Rules allows smoking in designated smoking areas, and the definition of "smoking" under Section 3(n) of the Act includes smoking with the aid of a hookah. Therefore, the prohibition on hookahs was ultra vires the Act and the Rules. The court also emphasized the need to harmoniously construe Rule 3(1)(c) and Rule 4(3), concluding that what is allowed under Rule 4(3) cannot be negated by Rule 3(1)(c). 4. Dimensions and Regulations of Smoking Areas: Sub-clauses (D) and (E) of Condition No. 35, which specified the dimensions of smoking areas, were upheld. The court agreed with the Municipal Corporation's argument that these regulations were within the Corporation's authority to regulate buildings and were not challenged. 5. Validity of Notices and Orders by Municipal Corporations and Police Commissioners: The court examined similar notices and orders issued by the Madras and Gujarat High Courts. The Madras High Court's notice dated 5th July 2011 was found ultra vires as it imposed prohibitions not supported by the Cigarettes Act. The Gujarat High Court's order dated 14th July 2011, issued under Section 33 of the Bombay Police Act and Section 144 of the Code of Criminal Procedure, was also set aside. The court referred to the Supreme Court's interpretation in Himat Lal K. Shah v. Commissioner of Police, Ahmedabad, which clarified that "regulate" does not include "prohibit." Conclusion: The Supreme Court set aside the judgments of the Bombay, Madras, and Gujarat High Courts to the extent they upheld conditions and notices that were ultra vires the Cigarettes Act and its Rules. The first paragraph of Condition No. 35 and the added words in Condition No. 35(C) were deleted. The appeals were allowed, and the impugned judgments were set aside.
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