Facts of the Case

The petitioner, Syed Rasheed, was engaged in the lawful business of tobacco products under a valid licence and GST registration, while regularly paying applicable taxes. Despite the petitioner carrying on business through valid invoices and statutory registrations, the authorities allegedly continued to interfere with his day-to-day business operations.

The petitioner contended that although the Government of Telangana had issued Notification No. 501/FSS-1/2022 dated 07.01.2022 prohibiting certain tobacco products, the Hon'ble Supreme Court had granted an interim stay on the operation of the notification in connected proceedings. In spite of the subsisting stay, the authorities allegedly continued to obstruct the petitioner's lawful business activities.

Accordingly, the petitioner approached the Telangana High Court under Article 226 of the Constitution of India, seeking protection against such interference.

Issues Involved

  1. Whether the State authorities could interfere with the petitioner's licensed tobacco business despite the Supreme Court's interim stay on the Telangana Government's tobacco prohibition notification.
  2. Whether continued interference by enforcement authorities amounted to arbitrary action contrary to judicial orders.
  3. Whether the petitioner was entitled to protection under Article 226 of the Constitution against such interference.

Petitioner's Arguments

  • The petitioner was conducting business lawfully under a valid licence, GST registration and tax compliance.
  • The Telangana Government's tobacco prohibition notification dated 07.01.2022 had already been stayed by the Hon'ble Supreme Court.
  • Despite the subsisting stay, officials continued interfering with the petitioner's business activities.
  • Such interference was arbitrary, illegal and violative of the principles of natural justice.
  • The petitioner sought a writ directing the authorities not to interfere with his lawful business until the Supreme Court decided the matter.

Respondents' Arguments

The respondents relied upon the Government's regulatory powers. During the hearing, however, both sides submitted that the controversy was already covered by the judgment rendered by the Telangana High Court in W.P. No. 34806 of 2022 & batch, decided on 21.09.2022, which had dealt with the identical issue arising out of the same tobacco prohibition notification.

Court Order / Findings

The Telangana High Court observed that the present writ petition was squarely covered by its earlier judgment in W.P. No.34806 of 2022 & batch.

The Court reiterated that:

  • The Supreme Court had stayed the operation of Notification No. 501/FSS-1/2022 dated 07.01.2022.
  • So long as the Supreme Court's interim orders continued to operate, the authorities were not entitled to interfere with the petitioner's business activities.
  • The Court also took note that the Director General of Police had already issued appropriate circulars to the concerned officers.
  • It further observed that any action taken contrary to such judicial directions would be viewed seriously.

Accordingly, the writ petition was disposed of directing the respondents not to interfere with the petitioner's business activities during the subsistence of the Supreme Court's interim orders, with no order as to costs.

Important Clarification

  • The judgment does not declare the tobacco prohibition notification invalid.
  • The High Court merely enforced compliance with the existing interim stay granted by the Hon'ble Supreme Court.
  • Protection from interference remains operative only so long as the Supreme Court's interim orders continue to remain in force.
  • Authorities are expected to strictly comply with judicial directions and departmental circulars issued pursuant thereto.

Sections / Provisions Involved

  • Article 226 of the Constitution of India
  • Section 151 of the Code of Civil Procedure, 1908 (Interlocutory Application)
  • Notification No. 501/FSS-1/2022 dated 07.01.2022
  • Supreme Court Interim Orders in SLP(C) Nos. 1656 of 2022, 5399 of 2022 and connected matters

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785144176_2083compressed.pdf

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