Chandigarh

DF-II

CC/538/2017

Manish Sharma - Complainant(s)

Versus

Aero Club C/o Woodland - Opp.Party(s)

Nitin Verma Adv.

11 Dec 2017

ORDER

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

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Consumer Complaint  No	:	538 of 2017
Date  of  Institution	:	14.07.2017
Date   of   Decision	:	11.12.2017

 

 

 

 

Manish Sharma, R/o House NO.128, Sector 11-A, Chandigarh. 

             …..Complainant

Versus

Aero Club C/o Woodland, SCO 25, Sector 20-D, Chandigarh through its authorised representative.

….. Opposite Party 

 

BEFORE:  MRS.PRITI MALHOTRA    PRESIDING    MEMBER

                                SH.RAVINDER SINGH              MEMBER

 

 

For complainant(s)      : Sh.Manish Sharma, Advocate 

 

For Opposite Party(s)   : Sh.Vikas Verma, Agent of OP

 

 

 

PER PRITI MALHOTRA, PRESIDING MEMBER

 

 

          As per the case, the complainant in response to the offer of Opposite Party i.e. 50% discount on maximum retail price, purchased two T-Shirts with MRP of Rs.1995/- each.  However, when the articles were delivered to him, he was charged Rs.2094.30p.  It is averred that the maximum retail price of the said article/product was Rs.1995/- each, which was inclusive of all taxes (Vat also) and after 50% discount on Rs.3990/- (Rs.1995/- each), the amount/cost payable by the complainant for the said product was Rs.1995/- but the OP charged Rs.2094.30p which included illegal charge of extra Vat of Rs.99.70p, which is arbitrary and unsustainable. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint.

 

2]       The Opposite Party has filed reply and admitted the factual matrix of the case about sale of the goods in question and charging of VAT after giving discount. It is stated that the answering Opposite party has rightly charged the tax.  It is also stated that the answering Opposite Party had informed the complainant that VAT will be charged separately and only after that the complainant purchased the goods.  It is submitted that the moment the purchaser availed the scheme, he is out from the declaration of MRP which serves only the basis for calculation of net sale consideration subject to payment of VAT.  It is pleaded that if the complainant was ever dissatisfied he should have approached VAT department for clarification. It is stated that the sale bill itself establishes the allowing of rebate and then charging VAT as per scheme, then there is complete transparency where the Opposite Party has clearly mentioned the discount and payment of VAT. Pleading on deficiency in service and denying rest of the allegations, the Opposite Party has prayed for dismissal of the complaint. 

 

3]       Parties led evidence in support of their contentions.

 

4]       We have heard the ld.Counsel for the complainant, Representative of Opposite Party and have also perused the entire record.

 

5]       The ld. Counsel for the complainant at the time of arguments submitted that the complainant on 23.4.2017 purchased Two T-Shirts from Opposite party, who offered 50% discount on MRP of Rs.1995/- each (Rs.3990/-). It is alleged that the Opposite Party issued retail invoice for an amount of Rs.2094.30 whereby the Opposite Party illegally charged extra VAT to the tune of Rs.99.70p whereas the cost of the product mentioned on the tag is inclusive of all taxes.  The counsel for the complainant further claimed that as the VAT has already been added to the said cost of the product, so the complainant cannot be charged extra tax by doing so. Submitted that the Opposite party had not only indulged into unfair trade practice but also rendered deficient service to the complainant.

6]       On the contrary, the Opposite Party has completely denied the allegations of the complainant and submitted that it has rightly charged the tax and under VAT Act and deposited the same with the VAT department.

 

7]       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 and added in bill?

 

8]       It has been contended by the Opposite Parties that the complainant had clearly been informed before the purchase i.e. an online disclosure that VAT would be charged extra over the discounted sale price, therefore, no unfair trade practice can be attributable on its part.

 

         The Opposite Party has miserably failed to produce on record any cogent, convincing and reliable piece of evidence in the shape of any rules/instructions/legal provisions authorizing them to levy/charge the amount of VAT on the product/item sold at discounted price which carried the price tag displaying the maximum retail price of the product/item in question, as inclusive of all taxes. Thus, the Opposite Party has failed to discharge the burden of proof.

        

9]       The claim of the Opposite Party that it has not charged anything above MRP of the product and sold the product on discounted price and thus can impose VAT is not tenable in the eyes of law. As the discount so offered by the OP is part and parcel of their promotional policy offering hefty discounts in order to attract/allure the gullible customers; who approach them under the misleading belief of getting hefty discounts declared by them which comes out to be an illusion when they are forced to pay a good amount of VAT illegally imposed on the discounted price.  We are of the opinion that the discount so offered by the OP is offered from their own margins as per their own choice and are not pressurized to do so and ones it is mentioned in the price tag of any item/product as ‘inclusive of all taxes’ then none can add even a single penny on account of any tax. It can only be done in regards to the goods/products where its price does not include all taxes. 

 

10]      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. It is not the case of the Opposite Party that it charged VAT on the actual price of the item in question. 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.

11]      Though Opposite Party had offered 50% discount on the article in question, still they charged extra VAT on discounted price in spite of the specific mention of the maximum retail price inclusive of all taxes, as is evident vide     Ann. 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.     

 

12]      In these set of circumstances, we are of the concerted view that the customer/complainant is liable to pay extra amount of the VAT imposed by the Opposite Party only if the article is labelled as MRP “exclusive of all taxes”.  But it is quite clear vide Annexure C-1 that MRP of the product/item in question is ‘inclusive of all taxes’, so the charging of extra VAT is clearly unfair trade practice resorted to by the Opposite Party. Thus the Opposite Party is liable to compensate the complainant for their deficient act and for their indulgence into unfair trade practice.

 

13]      Our view is fortified by the latest pronouncement of the Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No.3477 of 2016 – M/s. Aero Club (Woodland) Vs. Rakesh Sharma, decided on 4^th Jan., 2017, as the controversy in issue has been laid at rest, wherein it has been held that:-

“14.   In our opinion, the advertisement in the above form is nothing but an allurement to gullible Consumers to buy the advertised merchandise at a cheaper bargain price, which itself was not intended to be the real “bargaining price” and, therefore, tantamounts to unfair trade practice, as found by both the Fora below. Significantly, under Section 2(d) of the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act, 2014, the “Maximum Retail Price” printed on the goods, a mandatory labelling requirement, at the relevant time, for pre-packaged goods, means “such price at which the consumer goods shall be sold in retail and such price shall include all taxes levied on the goods.” In that view of the matter, having seen the word “FLAT” in the advertisement, a consumer would be tempted to buy the goods under a bonafide belief that he would get a flat 40% off on the MRP. In our opinion, therefore, the defence of the Petitioners that they had charged VAT as per law is of no avail in so far as the issue at hand, viz. misleading advertisement, resulting in unfair trade practice, is concerned. We are in complete agreement with the Fora below that any discount falling short of “Flat 40%” on the MRP would amount to unfair trade practice, as defined in the Act.

 

14]      The ratio of the afore-cited judicial pronouncement is  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 their part, which certainly had caused immense mental and physical harassment to the Complainant. 

 

15]      For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Party 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 Rs.99.70/- i.e. the amount charged extra VAT on the discounted product having MRP inclusive of all taxes.  

 

b]  To pay a consolidated amount of Rs.1500/- to the complainant towards compensation as well as litigation cost, on account of unfair trade practice and deficiency in service on the part of OPs;

 

         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 @9% per annum on amount as mentioned at sub-para (a) & (b) above from the date of this order till it is paid.

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

Announced

11^th December, 2017                                                                                                                                                               Sd/-  

 (PRITI MALHOTRA)

PRESIDING MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER