DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)

Consumer Complaint No.164 of 2019

                                             Date of institution:  11.02.2019                                         Date of decision   :  10.06.2019

Ram son of Hari Pal, resident of VPO Jalauli, Tehsil Barwala, District Panchkula, Haryana.

…….Complainant

Versus

Adi Sports Pvt. Ltd.  Reebok GF 001, FF 40, 41, 42, 43, 44, Cosmo Plaza, NH-22, Mohali, Zirakpur, Punjab 140603 through its Manager or Authorised Representative.

……..Opposite Party

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:   Shri G.K. Dhir, President,

                Mrs. Natasha Chopra, Member.

Present:    Shri Jobanprince Singh, counsel for complainant.

                Shri Manoj Lakhotia, counsel for the OP.

Order by :-  Shri G.K. Dhir, President.

Order

                 MRP of product purchased by complainant was Rs.1299/- and after giving discount of 40%, the same turned to be Rs.779.40 N.P. OP charged Rs.827/- (round off) including VAT amount of Rs.47.15 N.P. @ 6.05%. That charging alleged to be unfair trade practice because MRP was inclusive of all taxes. Prayer, therefore, made for directing OP to refund extra charged VAT amount of Rs.47.15 N.P. and pay compensation for mental harassment and agony of Rs.25,000/-, but litigation expenses of Rs.15,000/-.

2.             OP filed reply by pleading inter alia as if complaint not maintainable because complainant is not consumer within meaning of Section 2 (1) (d) of Consumer Protection Act; complaint being vague and based on misconceived and baseless assumptions is not maintainable. Moreover, it is claimed that no cause of action available against OP because issue of charging VAT on the discounted price is already under consideration of Hon’ble Supreme Court in Special Leave Petition No.8868 of 2017 titled as M/s. Aero Club (Woodland) Vs. Rakesh Sharma. That SLP has been admitted for hearing vide orders dated 31.03.2017. OP has acquired good market reputation for its range of products and is rendering customer friendly services, but this complaint alleged to be filed by suppressing material facts. Complainant has failed to disclose that the invitation to offer discount were prominently displayed by OP on various spots around the show room. Complainant after due application of mind accepted the terms and conditions of OP, while paying sale consideration amount without protest and as such now complainant estopped from filing this complaint. Product was sold to complainant as per terms of the contractual obligations, but now complainant is trying to wriggle out of the contract. After going through advertisement and the material placed outside show room, everyone will know that on the discounted price, VAT will be chargeable. Admittedly VAT amount charged on the sale price, but same alleged to be charged for paying the same to the State Govt. It is only the State Govt. who can exempt or reduce the tax liability. At no point of time it was declared by OP that flat rate of discount will be given on the MRP of the products. VAT is to be calculated on the selling price as per market practice and the same has been done and as such it is claimed that no unfair trade practice adopted by OP.

3.             As per latest instructions received from Hon’ble State Consumer Disputes Redressal Commission Punjab parties to produce self attested affidavits and self attested documents and those have been produced and taken in consideration.  Complainant has produced self attested affidavit alongwith invoice Ex.C-1 and tag Ex.C-2, but OP has produced on record affidavit of Shri Gurpreet Mann authorised representative of OP alongwith copy of order dated 31.03.2017 passed in SLP (C) No.8868/2017 by Hon’ble Supreme Court of India and photostat copy of display offer.

4.             Written arguments not submitted. Oral arguments heard and records gone through.

5.             Contents of complaint as well as of affidavit and invoice Ex.C-1 establishes that product was purchased by complainant after visiting OP at Zirakpur (District Mohali) on 08.06.2017 by paying price of Rs.827/- including VAT amount of Rs.47.15 N.P. @ 6.05%.  In tag Ex.C-2 it has been specifically mentioned that MRP is inclusive of all taxes and as such VAT/any other tax could not have been charged on the discounted price because MRP is inclusive of all taxes. It is submitted by counsel for OP that VAT has been charged as per market practice, but that practice of charging VAT on the discounted price certainly is against the law laid down by Hon’ble National Consumer Disputes Redressal Commission, New Delhi in case titled as M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma bearing Revision Petition No.3477 of 2016 decided on 04.01.2017 as well as of case bearing First Appeal No.136 of 2017 titled as M/s Aero Club Vs. Ravinder Singh Dhanju decided on 23.05.2017 by Hon’ble State Consumer Disputes Redressal Commission, UT Chandigarh. Ratio of both these cases lays that when MRP is inclusive of all taxes, then VAT/other taxes cannot be charged separately, meaning thereby that on discounted price no VAT can be charged. In the case before us, VAT has been charged on the discounted price, which is not permissible as per law laid down in the above cases and as such certainly OP adopted unfair trade practice in doing so.

6.             Counsel for OP vehemently contends that display was put forth on the counters as well as around the show room and on the website that VAT will be charged extra on the discounted price and terms and conditions will apply and as such in view of acceptance of that offer by complainant, now complainant cannot claim that VAT on the discounted price could not be charged.  Even if in the copy of alleged notice put up around the show room, mention made “Buy 2 @ 50% off; Buy 1 @ 40% off with VAT extra”, despite that no material produced on record to show as to at which conspicuous place of the show room, original of that display was put up. Untill and unless place on which alleged notice displayed is shown to be conspicuous place, it cannot be held that contents of the display notice were made known to each and every customer visiting the show room in question, from where the product in question purchased by complainant.  Date of display of alleged notice or place of display of same not specifically mentioned in the reply or in the affidavit of Shri Gurpreet Mann, authorised signatory/representative of OP and as such it cannot at all be held that actually the notice was displayed for providing due information to the customers. Being so, just on the strength of display notice it cannot be held that complainant was made aware of the terms and conditions of the discount offer. If complainant was not made aware of those terms and conditions, then how OP can charge extra VAT amount on the discounted price in violation of the law laid down by Hon’ble National Commission in case of M/s. Aero Club (Woodland) Vs. Rakesh Sharma (supra) qua that no plausible explanation at all is offered. So act of charging of VAT on the discounted price certainly is unfair trade practice in view of facts and circumstances of this case. Being so, complainant entitled for compensation for mental agony and harassment and also to litigation expenses, but of reasonable amount only

7.             Learned counsel for the OPs vehemently contends that order dated 04.01.2017 passed by the Hon’ble National Commission in case of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra)  has been challenged before the Hon’ble Supreme Court and the Special Leave Petition in that respect  bearing No.8868 of 2017 has been admitted and as such the proceedings of this complaint should be adjourned sine die. Provisions of Order 41 Rule 5 of CPC provide that mere filing of appeal does not amount to stay of operation of orders under challenge in appeal and as such on the same analogy, it has to be held that on mere filing of SLP alone, it cannot be inferred that operation of the law laid down by Hon’ble National Commission in above cited case of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra) has been stayed. So long as the operation of law laid down by Hon’ble National Commission not stayed, same to prevail and as such there is no need to adjourn the proceedings sine die.

8.             As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.47.15 N.P. with interest @ 6% per annum w.e.f. 08.06.2017 till payment. Compensation for mental agony and harassment of Rs.2,000/- and litigation expenses of Rs.2,000/- more allowed in favour of complainant and against  OP.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order. Certified copies of the order be supplied to the parties free of cost and thereafter the file be indexed and consigned to the record room.           

Announced

June 10, 2019.

                                                                (G.K. Dhir)

                                                                President

(Mrs. Natasha Chopra)

Member