Hotels and restaurants can sell bottled drinking water and other pre-packed foods above the Maximum Retail Price on their premises, the Supreme Court said on Tuesday, the Hindustan Times reported.

A bench led by Justice Rohinton Nariman turned down the government’s argument that overcharging for pre-packaged products was an offence under the Legal Metrology Act. Selling any product above the price mentioned on the package will attract a fine of up to Rs 25,000 for the first offence, Rs 50,000 for the second and up to Rs 1 lakh or a jail term for a year after that, the Consumer Affairs Ministry said, according to ET Now.

The court said the provisions of the Act will not apply to hotels, and they cannot be no prosecuted for selling products above MRP. “It is not a case of simple sale,” the bench said. “Nobody goes to hotel to buy or take away a bottle of mineral water.”

A “service element, including ambience, cutlery and service” is involved in hotels and restaurants, advocate Sameer Parikh, who appeared for the Hotels and Restaurant Association of India said, according to Hindustan Times. The petition was filed by the association.

The government also argued that charging more than the MRP was a form of tax evasion. “...A bottle purchased by a hotel at cost price, which should be sold at MRP or less, is being sold at much higher prices, leading to possible loss of additional revenue to the government,” the ministry said.

In March, the Centre had asked all establishments to comply with the law and sell packaged mineral water only at the maximum retail price.