Mumbai: Duty-free shops operating within airports are not exempt from India's domestic regulatory laws, the Bombay High Court has ruled while refusing to interfere with the ban on the sale of imported nicotine pouches at Mumbai's Chhatrapati Shivaji Maharaj International Airport.

A bench of Justices Suman Shyam and Advait Sethna passed the judgment on Tuesday while hearing a petition filed by Mumbai Travel Retail Limited and Flemingo Dutyfree Shop Private Limited against the ban on the sale of imported nicotine pouches sold under the brand names 'Zyn' and 'Fox'.

The petitioners had challenged the action taken by the Drugs Controller General, which barred the sale of the products for want of licences under the Drugs and Cosmetics Act.

The High Court held that goods imported into India do not become immune from domestic laws merely because they are kept in a duty-free area or are intended for re-export.

"Such goods would be subject to the law of the land and would be governed by the regulatory regime in force even if the transaction takes place in the duty-free shops, beyond the customs barrier," the court said.

The bench further observed that goods restricted or prohibited under any law in force would be treated as "prohibited goods".

The domestic regulatory framework, it said, would apply to such products sold through duty-free shops located within Indian territorial jurisdiction.

The court, however, did not decide whether tobacco-free nicotine pouches qualify as 'drugs' under the Drugs and Cosmetics Act. It directed that the question be determined by the Central Drugs Standard Control Organisation.

The authorities had, on April 2, prohibited the sale of imported tobacco-free nicotine pouches at the Mumbai international airport, treating them as 'drugs' under the Drugs and Cosmetics Act. The classification meant that registration certificates and import licences were required for their sale.

The petitioners had argued that domestic regulatory laws should not apply to the products because they were intended only for consumption by outbound passengers at the International Departure Terminal.

The High Court, however, rejected the contention that their sale in the duty-free area placed them outside the scope of domestic regulatory laws.