The case has been brought by four of the world's biggest firms against regulations which come into force in May next year banning companies from using any logos or branding on packets of tobacco products.
Mr Justice Green, sitting in London, is being asked to rule on the legality of the new "standardised packaging" regulations in a judicial review action by Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco International.
The challenge is being contested by Heath Secretary Jeremy Hunt, who argues that the regulations are lawful.
At the start of an estimated six-day case, David Henderson QC, for Japan Tobacco International (JTI) said the companies were "entitled to know" whether the regulations "are lawful or not."
He told a packed court: "The claimants manufacture products which are lawful, which contribute approximately £10bn per year in excise duty alone for the UK exchequer, which are used by some 19% of the adult population, and which the secretary of state ... has never sought to ban."
Anderson, referring to written legal submissions before the court on behalf of the secretary of state, said he was "quite wrong when he says that we are trying to protect our ability to market unencumbered by legitimate legislation."
The QC submitted that "on the contrary" the industry was "regulated in a way almost unprecedented in any other field."
At the heart of the case are the Standardised Packaging of Tobacco Products Regulations 2015, which the companies argue will destroy their highly valuable property rights and render products indistinguishable from each other.
Under the regulations any part of tobacco packaging not covered by the health warning carried on it must be a dark brown or green colour, and brand names must be in small, non-distinctive lettering.
The government argues that the new measure will discourage more people from smoking.
As well as hearing arguments from lawyers for each of the companies and the Health Secretary, the judge will hear submissions from campaigning public health charity Action on Smoking and Health (Ash), which says it "works to eliminate the harm caused by tobacco."
The firms are putting forward a number of grounds of challenge, including a claim that the regulations violate a number of UK and EU laws, and that they are "disproportionate."
In written submissions to the judge, Philip Morris International (PMI) argues that the regulations are "disproportionate and so must be quashed."
PMI QC Marie Demetriou said the defendant (the health secretary) has "failed to demonstrate" that the regulations are suitable or appropriate to meet the objective of "improving public health by reducing smoking" because "it has failed to establish that the regulations will cause a material decrease in smoking rather than an increase".
PMI further submits that the health secretary has failed to demonstrate that the regulations "are necessary in that the same public health objective cannot be achieved through a less restrictive means, namely taxation."
Demetriou said: "The defendant has failed to demonstrate that the regulations strike a fair balance between their public interest objectives and the interests of the claimants, given that the regulations will substantially interfere with the claimants' fundamental rights and freedoms, and destroy their valuable, and often very long-standing, property rights."
James Eadie QC, representing the health secretary, said in written submissions that the companies manufacture and sell tobacco products "which are the only legal consumer products in the world that cause half of their long-term users to die prematurely."
He said: "At the heart of the claimants' case is the assertion that the regulations will not be effective in achieving their public health objectives.
"In short, according to the claimants, standardised packaging will not reduce the appeal of smoking and will not achieve a reduction in tobacco consumption.
"To the contrary, standardised packaging is likely to increase tobacco consumption, and have other adverse consequences such as an increase in illicit trade in tobacco."
Eadie added: "The secretary of state's case is that none of the grounds of challenge are made out and the regulations are lawful.
"The claimants' attack on the proportionality of the regulations is without substance."
The QC said that "independent and systematic reviews of the evidence" concluded that branded packaging plays an important role in encouraging young people to smoke, and that "standardised packaging is highly likely to reduce both uptake and prevalence of smoking, and thus will have a positive impact on public health."
He argued that if the tobacco industry "is prevented from using packaging to promote its products to consumers or potential consumers, the appeal of cigarettes is likely to diminish, with inevitable reducing effects on smoking itself."