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

Consumer Complaint No.771 of 2017

                                               Date of institution:  18.09.2017                                             Date of decision   :  04.05.2018

Sumeet Rangta son of Raghubir Singh Rangta resident of VPO Jhalta, Tehsil Jubbal, District Shimla HP 171216.

…….Complainant

Versus

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

                                                                ……..Opposite Party

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Shri Amrinder Singh Sidhu,

                Mrs. Natasha Chopra, Member.

Present:     Shri Harpreet Saini, counsel for the complainant.

                Shri Manoj Lakhotia, counsel for the OP.

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

Order

               MRP of products purchased by complainant was Rs.1,399/-  and Rs.1,199/- and after giving discount of 50%, the same turned to be Rs.699.50 N.P. and Rs.599.50 respectively.  OP charged Rs.78.59 N.P. as VAT amount @ 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.78.59 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 its website as well as 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 of amount of Rs.78.59 N.P. 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. VAT was rightly levied as per provisions of VAT Tax Act of Punjab and Haryana, 2003. 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.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith document Ex.C-1 and Ex.C-2 and thereafter his counsel closed evidence. On the other hand counsel for OP tendered affidavit Ex.OP-1/1 of Shri Gurpreet Mann authorised signatory alongwith documents Ex.OP-1 and Ex.OP-2 and thereafter closed evidence. 

4.             Written arguments not submitted by any of the parties. Oral arguments heard and records gone through.

5.             Undisputedly the products in question having MRP of Rs.1,399/-  and Rs.1,199/- were purchased by complainant from OP on offer of discount @ 50%, by paying VAT @  6.05% of amount of Rs.78.59 N.P. Copy of the invoice Ex.C-1 alongwith tags Ex.C-2 in this respect are produced on record. On the produced tags, MRP of the purchased products is mentioned as Rs.1,399/- and Rs.1,199/- (inclusive of all taxes). So the material produced by complainant itself establishes that MRP was inclusive of all taxes. Being so,  on the discounted price, extra VAT could not have been charged by OP because as per 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 in 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, if on the sold product mention made regarding MRP inclusive of all taxes, then extra tax (VAT/GST etc.)  cannot be charged on the discounted price and in case it is done, then the same will amount to unfair trade practice. No law to the contrary produced except that judgment in case of M/s. Aero Club (Woodland) Vs. Rakesh Sharma (supra) has been challenged in Hon’ble Supreme Court by way of filing Special Leave Petition. Copy of record of proceedings pending before the Hon’ble Supreme Court is produced on record as Ex.OP-1. Perusal of the same reveals as if leave has been granted for filing the Special Leave Petition. Provisions of Order 41 Rule 5 CPC provide that mere filing of appeal does not amount to stay of operation of order under challenge in appeal. On the same analogy, it has to be held that the operation of order of Hon’ble National Commission passed in M/s. Aero Club (Woodland) Vs. Rakesh Sharma (supra) has not been stayed till date. Being so, that order passed by the highest authority under the Consumer Protection Act, 1986, has to be followed by this Forum, being subordinate to the Hon’ble National Commission. So, virtually charging of VAT amount extra is an act of unfair trade practice, which had been deprecated by the Hon’ble National Commission in above cited case.

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%; 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 Ex.OP-2 was put. Untill and unless place on which Ex.OP-2 displayed is shown to be conspicuous place, it cannot be held that contents of Ex.OP-2 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 Ex.OP-2 or place of display of same not specifically mentioned in the reply or in the affidavit Ex.OP-1/1 of Shri Gurpreet Mann, authorised signatory/representative of OP and as such it cannot at all be held that actually this Ex.OP-2 was displayed for providing due information to the customers. Being so, just on the strength of Ex.OP-2 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.             As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.78.59 N.P. with interest @ 6% per annum w.e.f. 11.04.2017 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 be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

May 04, 2018.

                                                                (G.K. Dhir)

                                                                President

(Amrinder Singh Sidhu)

Member

(Mrs. Natasha Chopra)

Member