Chandigarh

DF-II

CC/195/2016

Sulabh Mahajan - Complainant(s)

Versus

Adi sports - Opp.Party(s)

Sukaam Gupta Adv

29 Apr 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	195 of 2016
Date  of  Institution	:	19.03.2016
Date   of   Decision	:	29.04.2016

 

 

 

 

 

Sulabh Mahajan, S/o Sh.Sushil Kumar Gupta, R/o #103, GH-8, sector 20, Panchkula.

 

                …..Complainant

Versus

 

Adi Sports, Shop No.18, Ground Floor, DT Mall IT Park, Chandigarh, through its Manager.

 

….. Opposite Party

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         SH.JASWINDER SINGH SIDHU       MEMBER

         MRS.PRITI MALHOTRA             MEMBER

 

 

For complainant(s)      : Sh.Sukaam Gupta, Advocate.

 

For Opposite Party(s)   : Opposite Party exparte.

 

 

PER PRITI MALHOTRA, MEMBER

 

 

         As per the case, the complainant along with her parents, visited Opposite Party Shop in response to the 50% discount being offered by it on MRP on various products and accordingly, purchased one lower for an amount of Rs.1,999/- inclusive of all taxes (Ann.C-1).  However, the Opposite Party issued retail invoice/bill dated 20.2.2016 for an amount of Rs.1049/- (Ann.C-2).  It is averred that on checking the bill, the complainant noticed that the Opposite Party has charged extra vat on said invoice and asked the official of Opposite Party to waive off the same as the MRP of the product was inclusive of all taxes, but the Opposite Party refused to entertain the said request of the complainant. Further, when the complainant asked for any notification/regulation authorizing them to do so, the officials of Opposite Party became agitated, as such the complainant had to pay the billed amount along with excess amount of Rs.49.98/- as imposed under head of VAT and the said amount was paid under protest.  Alleging deficiency in service for the above act & conduct of the Opposite Party and also for the unfair trade practice resorted to by the OP, this complaint has been filed by the complainant. . 

 

2]       The Opposite Party though being duly served with notice through registered post-dated 25.04.2016, failed to put in appearance on 26.4.2016 and thus raising presumption under Sub-clause (2) of Regulation 10 of The Consumer Protection Regulations, 2005, the Opposite Party was proceeded exparte vide order dated 26.4.2016.

 

3]       Complainant led evidence in support of their contentions.

 

4]       We have heard the ld.Counsel for the complainant and have also perused the record.

 

5]       The ld. Counsel for the complainant at the time of arguments submitted that the complainant along with her parents visited Shop of Opposite Party in response to the 50% discount being offered by it on MRP on various products and as such, purchased one lower of an amount of Rs.1,999/- (inclusive of all taxes) (Ann.C-1).  The counsel for the complainant claimed that the Opposite Party after giving discount of 50% on the above purchase, issued retail invoice/bill dated 20.2.2016 for an amount of Rs.1049/- (Ann.C-2).  It is averred that on checking the bill, the complainant noticed that the Opposite Party has charged extra vat of Rs.49.98/- on said invoice and when the official of Opposite Party was asked to waive off the same, they refused to do so and as such, the complainant had to pay the excess amount of Rs.49.98/- as imposed under head of VAT and the said amount was paid under protest. The counsel for the complainant further claimed that as the VAT has already been added to the said cost of the product/article, so the complainant cannot be charged extra tax by doing so. The Opposite Party had not only indulged in unfair trade practice but also rendered deficient service to the complainant as well to the public at large. 

 

6]       In this backdrop, the core question which survives for determination is whether VAT can be charged on the discounted price when MRP of a product is inclusive all taxes?

 

7]       However, despite due service of the notice of the complaint, the Opposite Party chose not to appear and thus was proceeded exparte vide order dated 26.4.2016. Thus, all the allegations of the complainant supported by duly sworn affidavit goes unrebutted and unchallenged. We are of the view that the allegations of the complainant are valid as the Opposite Party bothered not to appear to show under what rules it had charged additional Vat on the MRP, which is mentioned on the price tag (Ann.C-1) as “inclusive of all taxes”.

 

8]       In our opinion, there is a difference between the remarks “Retail Price” and “Actual Price” of the goods. The MRP is inclusive of all taxes and a retailer can sell at a price below the MRP (Maximum Retail Price) because MRP is the maximum retail price allowed for that commodity and not the actual price. A retailer can well reduce his margin built into MRP, while on the other hand, the actual price can be much lower than the MRP. When once it is displayed that the MRP is inclusive of all taxes, then in no circumstances the VAT can be added to it afterwards.

   

9]       In the present complaint, though Opposite Party had offered 50% discount on the article in question, still it charged 5% extra VAT on discounted price in spite of the specific mentioning of the maximum retail price (inclusive of all taxes), as is evident vide Annexure C-1. Since it is an offence to sell at a price higher than the marked price, so it is also not legal to charge any tax on the product/item carrying tag of maximum retail price inclusive of all taxes. Here we are fortified by the similar view taken by the Hon’ble State Consumer Disputes Redressal Commission, Bangalore, in Appeal No. 3723 of 2011, titled as “The Branch Manager, M/s Shirt Palace Branch, Black Bird Showroom Vs. Chandru H.C.”, decided on 16.01.2014.

 

10]       A similar question arose for determination before our Hon’ble State Consumer Disputes Redressal Commission, U.T. Chandigarh in First Appeal No. 210 of 2015, decided on 01.09.2015 in case titled as “Shoppers Stop and others Versus Jashan Preet Singh Gill and Others”, wherein it has been held that no one can charge more than the MRP and MRP includes all taxes including VAT/other taxes. When MRP is inclusive of all taxes, then VAT/Other taxes cannot be charged separately.

 

11]      The ratio of the afore-cited judicial pronouncements are squarely applicable to the present lis. Therefore, the act of the Opposite Party in charging VAT on discounted product, clearly proves deficiency in service having indulged into unfair trade practice on its part, which certainly had caused immense mental and physical harassment to the Complainant. 

 

12]      After giving our thoughtful consideration, we are of the considered opinion that no one can charge any tax on the product where MRP is mentioned as inclusive of all taxes including VAT/other taxes etc.. When MRP of the goods is inclusive of all taxes then VAT/other taxes cannot be charged separately. Meaning thereby that MRP includes VAT and after discount no VAT can be charged, so on discounted product also VAT cannot be charged.  But it is quite clear vide Ann.A-1 that MRP of the product/item in question is ‘inclusive of all taxes’, so the charging of VAT @5% separately is clearly unfair trade practice resorted to by the Opposite Parties.

 

13]      For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Party (not appeared despite duly served) not only for resorting to unfair trade practice but also for the deficiency in service towards the complainant and the same is accordingly allowed. The Opposite Party is directed as under:-

a]  To refund the excess amount charged as 5% VAT i.e. Rs.49.98/-, from the complainant

b]  To pay an amount of Rs.5,000/- to the complainant towards compensation for causing him mental & physical harassment on account of deficiency in service and having indulged into unfair trade practice;

 

c]  To pay litigation expenses to the tune of Rs.2000/-.

 

         This order shall be complied with by the Opposite party within a period of 30 days from the date of receipt of its copy, failing which it shall be liable to pay interest @12% per annum on amount as mentioned at sub-para (a) & (b) above from the date of this order it is paid, apart from paying litigation expenses.

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

29.04.2016                                                                                 Sd/-

(RAJAN DEWAN)

PRESIDENT

 

 

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER

 

 

Sd/-

(PRITI MALHOTRA)

MEMBER