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

Consumer Complaint No.1279 of 2018

                                                Date of institution:  07.12.2018                                                  Date of decision   :  05.11.2019

Nikhil Rana son of Late Shri Raj Kumar Rana, resident of House No.3225/3, Sector 44, Chandigarh.

…….Complainant

Versus

Central, North Country Mall, NH 21, Mohali Kharar Road, Mohali.

                                                      ……..Opposite Party   

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Mrs. Natasha Chopra, Member.

Present:     Shri Jasjit Singh Saini, counsel for the complainant.

                Shri Pawan Kumar, counsel for the OP.

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

Order

               Complainant purchased articles from OP on 29.06.2017. Discount of 25% was offered on MRP of Rs.1,899/-  inclusive of all taxes. After discount, price payable was Rs.1,424/-, but OP charged Rs.1,510/- including Rs.86/- as VAT @ 6.05%. That act of charging VAT on the discounted price is unfair trade practice and as such this complaint for seeking refund of excess charged amount of Rs.86/- with interest. Compensation for mental agony and harassment of Rs.50,000/- and litigation expenses of Rs.15,000/- more claimed.

2.             In reply filed by OP, it is pleaded inter alia as if complaint is not maintainable, more so when same has been filed with intention of harassing and blackmailing OP. It is also claimed that complainant was well aware of the fact that advertisement boards displayed inside the OP store mentions that VAT amount supposed to be paid extra on the discounted price. OP Company is incorporated under Companies Act and it has various shops under brand name of Central throughout country. Admittedly complainant visited shop of OP on 29.06.2017 and discount of 25% was offered on MRP and thereafter Rs.1,510/- charged. Advertisement boards mentioning about “discounts & VAT extra” displayed at various locations inside the shop. Requirement of mentioning MRP on the label of the product is because of provisions of Legal Metrology (Packaged Commodities) Rules, 2011.  Admittedly OP collected Rs.86/- towards VAT on the discounted price and thereafter said amount was deposited with the Govt. Department. When the product is sold on MRP to the customer, then VAT amount is not separately collected from customer. Punjab Value Added Tax, 2005 governs collection of levy of VAT. Each and every other averment of the complaint denied, by claiming that false and frivolous complaint has been filed on wrong facts.

3.             As per latest instructions received from Hon’ble State Consumer Disputes Redressal Commission Punjab there is no need to record evidence of the parties and as such after hearing arguments of counsel for parties and going through produced record, this complaint is decided

4.             From perusal of complaint and written reply as well as submitted affidavit of parties, it is made out that VAT was charged on the discounted price of the product having MRP inclusive of all taxes as per tag Ex.C-1. As and when MRP is inclusive of all taxes, then VAT on the discounted price cannot be charged because practice of charging VAT on the discounted price having MRP inclusive of all taxes has been deprecated 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.  Ratio of both these cases fully applicable to the facts of the present case. So practice of charging VAT on the discounted price of the product having MRP inclusive of all taxes in this case certainly is unfair trade practice.

5.             Even if VAT to be charged from the buyer, despite that the terms of such practice can be changed by mutually arrived at contract through which the seller may undertake liability to pay VAT on the discounted price of a product having MRP inclusive of all taxes. It was OP itself who professed through tag that MRP will be inclusive of all taxes and as such on the discounted price, OP by such undertaking bound to pay VAT or other taxes. Complainant on representation of OP of discount offer on product having MRP inclusive of all taxes, purchased the product in question from OP and as such now OP estopped by its act and conduct from claiming that VAT to be charged extra on the discounted price, especially when law on the subject referred above is to the contrary.

6.             Provisions of Sales Tax Act or VAT Act 2005 stands on different footing than that of beneficial provisions of Consumer Protection Act. Assessment of turnover of a trader for purpose of sales tax to be done under the provisions of taxation provisions for collecting revenue for the State, but under the garb thereof benefit of beneficial provisions of Consumer Protection Act cannot be denied to the consumers. So even if there may be responsibility of OP to collect VAT on the sold products, but despite that it is bound by its open offer of not charging VAT extra on the products having MRP inclusive of all taxes.

7.             Though it is contended that advertisements displayed for notice of consumers shows that VAT to be charged extra on the discounted price, but there is nothing on the record to suggest as to at which conspicuous place of OP’s show room, such advertisement was put and as such virtually due notice of the scheme of charging extra VAT on discounted price is not given to complainant. It is the claim of complainant put forth in the complaint as well as in the submitted affidavit Ex.CW-1/1 that he raised protest regarding charging of extra VAT on the discounted price of the product having MRP inclusive of all taxes and as such it is not a case in which complainant paid the VAT on the discounted price without protest.

8.             As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.86/- with interest @ 6% per annum w.e.f. 29.06.2017 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 as per rules.  File be indexed and consigned to record room.

Announced

November 05, 2019.

                                                                (G.K. Dhir)

                                                                President

(Mrs. Natasha Chopra)

Member