The Ministry of Health has charged tobacco giant Philip Morris over the sale of tobacco sticks known as HEETS.
The tobacco is heated in an electronic device, rather than smoked as in a cigarette.
The ministry considers HEETS are designed for oral use other than for smoking, which is banned in New Zealand under the Smoke-Free Environments Act 1990.
It laid charges against Philip Morris (New Zealand) Ltd at Wellington District Court and the case is set for an initial hearing in June.
Section 29 of the Smoke-Free Environments Act prohibits advertising, selling or distributing a tobacco product described as suitable for chewing or any oral use other than smoking.
In March, the government announced options for legalising emerging tobacco and nicotine delivery products.