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

Consumer Complaint No.858 of 2017

                                                     Date of institution:  13.10.2017                                                     Date of decision   :  23.05.2018

Karmanjit Singh son of Shri Kultar Singh, resident of House No.1820-D, Preet Nagar, Randhawa Road, Kharar, SAS Nagar, Punjab.

…….Complainant

Versus

Lifestyle International Pvt. Ltd. The North Country Mall, NH 21, Mohali-Kharar Road, SAS Nagar 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 Samdish, counsel for the complainant.

                Shri Saurabh Gulia, counsel for the OP.

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

Order

               Complainant purchased one towel for his own use from OP on 29.06.2017 by paying Rs.66/- through invoice. MRP of the product was Rs.90/-. 30% discount was offered on the MRP and thereafter the discounted price was Rs.63/- (approximately) inclusive of all taxes.  However, VAT @ 6.05% was charged on the discounted price. So complainant had to pay Rs.66/- including Rs.3/- as VAT amount. Complainant after seeing the bill resisted demand of OP to claim Rs.66/-, but to no effect. It looks as if in Para No.3 of the complaint, purchase of the product by brother of the complainant is erroneously mentioned because after going through Para No.5,6 and 8 etc., it is made out that purchase actually was made by complainant. Charging of VAT @ 6.05% on the discounted price alleged to be unfair trade practice and that is why this complaint filed for seeking refund of the extra paid amount of Rs.3/- alongwith compensation for mental harassment and agony of Rs.25,000/-, but litigation expenses of Rs.5,000/- more claimed.

2.             OP is ex-parte in this case.

3.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith documents Ex.C-1 and Ex.C-2 and thereafter his counsel closed evidence.

4.             Shri Saurabh Gulia, Advocate filed memo of appearance on behalf of OP alongwith application for seeking permission to join proceedings at the stage of arguments. As counsel for OP not sought setting aside of ex-parte proceedings and as such virtually he sought permission to argue the matter. That permission granted because the grant of such permission does not amount to review of any earlier order passed by this Forum. Written arguments submitted by OP. Oral arguments heard and records gone through.

5.             Besides affidavit Ex.CW-1/1 of complainant, complainant has produced invoice Ex.C-1 and tag Ex.C-2 for establishing that MRP of the purchased product was Rs.90/- (inclusive of all taxes) and discount @ 30% thereon was allowed. After discount of Rs.27/-, the price of the product came to Rs.63/- as per invoice Ex.C-1. However, VAT @ 6.05% of amount of Rs.3.15 N.P. was charged on the discounted price is a fact borne from invoice Ex.C-1. As the tag Ex.C-2 makes mention that MRP is Rs.90/- inclusive of all taxes and as such the produced evidence by complainant enough to establish that VAT had been charged extra on the discounted price, despite the fact that MRP of the purchased product was inclusive of all taxes.  That practice of charging extra VAT on the discounted price certainly is unfair trade practice because the same 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 products having MRP inclusive of all taxes in this case certainly is unfair trade practice.

6.             Through written and oral submissions, it is vehemently contended by counsel for the OP that complainant has no cause of action because his case does not fall within the purview of Section 2 (c) of the Consumer Protection Act. That submission of counsel for the OP has no force because as already held above, OP adopted unfair trade practice by charging VAT on the discounted price of the product in question having MRP inclusive of all taxes.

7.             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 Ex.C-2 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.

8.             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 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.

9.             Even if discount offered by OP was not flat 30% discount on MRP, but was simply 30% discount on MRP, despite that extra VAT on the discounted price could not have been charged in view of above cited factual and legal position. So submission of counsel for OP projected through Para No.9 of written submissions has no force.

10.            As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.3.15 N.P. 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 be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

May 23, 2018.

                                                                (G.K. Dhir)

                                                                President

(Amrinder Singh Sidhu)

Member

(Mrs. Natasha Chopra)

Member