In the case, Federation of Hotel and Restaurant Associations of India Vs Union of India a writ petition was filed against various hotels and restaurants by the federation of hotel and restaurant associations of India- The petitioner.
The concern of the petitioner was that, hotels and restaurants were charging higher price than the Maximum Retail Price (MRP) of packaged drinking water and that this was against the law as according to the law, no commodity should be charged higher than the Maximum Retail Price. Section 366 (29A) (F) of the Indian constitution:“ tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made”
The single bench of Justice R.F Nariman gave the judgment that, charging higher prices of packaged drinking water than that of the MRP printed on the packaging, during the service of customers in hotels and restaurants does not violate any of the provisions as the customer does not only come to the hotel or restaurant to buy the bottled water but also for other things which includes the service and ambience of the particular hotel or restaurant and the customer is aware of these things, thus no action can be taken against the respondents. Thus, the wit petition was dismissed by the Supreme Court.
Reference: Section 366 (29A) (F) of the Indian constitution