Karnataka HC Quashes Hookah Prosecution Over Stockist’s Invoiced Return Of Validly Purchased Goods To Manufacturer After Ban

In brief

The question

1. Whether the dealer’s possession and return of goods validly purchased before the ban, while they were being sent back to the manufacturer, amounted to contravention of the provisions invoked in the prosecution.

The court held

The Court answered the issues in the petitioners’ favour.

It also directed

The Court allowed the petition and quashed the proceedings in C.C. No. 4261/2026 before the 1st Additional Chief Judicial Magistrate, Bengaluru, arising from Crime No. 23/2024 of Chamarajpet Police Station.

01Facts

Petitioner No. 1 was an authorised dealer of hukka products, and petitioners Nos. 2–5 were stated to be his workers.

After a notification dated 7 February 2024 banned hukka, petitioner No. 1 issued invoices on 8 February 2024 to return previously purchased goods to the manufacturer.

pp. 3–5

Police seized the goods from the premises on 9 February 2024. The petitioners challenged the resulting proceedings in C.C. No. 4261/2026, arising from Crime No. 23/2024, and sought to quash the cognizance order and summons.

pp. 3–5

The State did not dispute that the goods had been validly purchased or that the seizure occurred two days after the notification.

p. 6

02Issues

i.1. Whether the dealer’s possession and return of goods validly purchased before the ban, while they were being sent back to the manufacturer, amounted to contravention of the provisions invoked in the prosecution.

pp. 5–7

ii.2. Whether the criminal proceedings arising from the seizure should be quashed in the circumstances.

p. 7

03Law Applied

The prosecution invoked Sections 7 and 20(2) of the Cigarettes and Other Tobacco Products Act, 2003; Section 6 of the Poisons Act, 1919; Sections 328, 120-B, 511 and 284 read with Section 149 of the Indian Penal Code, 1860; and Sections 52, 59 and 63 of the Food Safety and Standards Act, 2006.

pp. 3–4

The Court’s stated basis for decision was that returning banned goods to the manufacturer under a valid invoice, in the circumstances before it, could not be treated as a sale of banned goods or as contravention of the provisions invoked. The order cites no precedent or further statutory test.

p. 7

Provisions in the judgment · 12 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 482

Bharatiya Nagarik Suraksha Sanhita, 2023 Section 528

Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 Section 7 Section 20

Poisons Act, 1919 Section 6

Indian Penal Code, 1860 Section 328 Section 284 Section 149 Section 511

Food Safety and Standards Act, 2006 Section 52 Section 59 Section 63

04Reasoning

The Court accepted that the goods had been validly purchased and were in the warehouse, and noted that the seizure occurred only two days after the ban was notified.

p. 6

It considered the debit notes and credit notes relied on by the petitioners as evidence of the return transaction; the State did not dispute the relevant facts.

pp. 5–6

On that record, the Court found that the dealer was returning the goods to the manufacturer, not selling them, and held that the conduct did not contravene the provisions invoked.

p. 7