DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)
Consumer Complaint No.240 of 2017
Date of institution: 22.03.2017 Date of decision : 13.09.2018
Ritesh Sharma son of Shri K.D. Sharma, resident of # S-6, Prabhu Kirpa Homes, Peermuchala, Punjab.
…….Complainant
Versus
1. Chawla Fashions, Shop No.11, Ground Floor, Paras Downtown Square Mall, Ground Floor, Zirakpur, through its Store Manager.
2. Arvind Life Style Brands Limited, Duparc Trinity, 8th Floor, M.G. Road, Bangalore-560001, through its Managing Director.
……..Opposite Parties
Complaint under Section 12 of
the Consumer Protection Act.
Quorum: Shri G.K. Dhir, President,
Shri Amrinder Singh Sidhu, Member
Mrs. Natasha Chopra, Member.
Present: Shri Puneet Tuli proxy counsel for Shri Sukaam Gupta counsel for complainant.
OP No.1 ex-parte.
Shri Arjun Sharma, counsel for OP No.2.
Order by :- Shri G.K. Dhir, President.
Order
Complainant, after visiting outlet of OPs on 19.02.2017, purchased one denim having MRP of Rs.2,399/-. 40% discount was given and on the discounted price VAT of Rs.97/- charged through invoice of amount of Rs.1,536/-. Charging of VAT on the discounted price of product having MRP, alleged to be unfair trade practice and that is why complaint for seeking refund of extra charged amount of Rs.97/- with interest @ 18% per annum from the date of payment namely 19.02.2017 till realisation. Compensation for deficiency in service of Rs.30,000 and litigation expenses of Rs.15,000/- more claimed.
2. OP No.1 is ex-parte in this case. OP No.2 in the submitted reply claimed as if the complaint has been filed on flimsy, frivolous and vexatious grounds with malafide intention for harassing OPs despite the fact that no cause of action accrued in favour of complainant. OP No.2 is manufacturer of product sold by OP No.1 to complainant. OP No.2 makes all sales policies in respect of the product and the stores across India complies those policies. In February, 2017, OPs offered certain products on discount on MRP by displaying the terms and conditions of discount sale offer at various places. As per those terms and conditions “VAT Extra” and “Conditions apply” were the words specifically mentioned. All the customers were made aware that VAT will be charged on the discounted price. Admittedly offer of 40% discount on MRP was given on the product purchased by complainant. It is claimed that complainant is not consumer because deduction of VAT does not amount to rendering services. Price lower than MRP was charged from complainant by explicitly mentioning that sale price shall not include the tax paid or payable to a seller in respect of such sale. VAT collected by OP deposited with VAT authorities and as such no unfair trade practice adopted by OPs. Other averments of the complaint denied.
3. Counsel for complainant tendered in evidence affidavit Ex.CW-1/1 of complainant alongwith documents Ex.C-1 and Ex.C-2 and thereafter closed evidence. On the other hand, counsel for OP No.2 tendered in evidence affidavit Ex.OP-2/1 of Shri S. Kannan, authorised signatory of the OP and thereafter closed evidence.
4. Written arguments not submitted by any of the parties. Oral arguments heard and records gone through.
5. Perusal of tag Ex.C-1 reveals that MRP of the product in question was Rs.2,399/- inclusive of all taxes. Undisputedly discount @ 40% was provided and thereafter on the discounted price of Rs.1,448.43 N.P. VAT of amount of Rs.87.63 N.P. was charged from complainant through invoice Ex.C-2. So certainly it is a case in which VAT charged on the discounted price of product having MRP inclusive of all taxes. 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 products having MRP inclusive of all taxes in this case certainly is unfair trade practice.
6. 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 OPs themselves who professed through Ex.C-1 that MRP will be inclusive of all taxes and as such on the discounted price, OPs by such undertaking bound to pay VAT or other taxes. Complainant on representation of OPs of discount offer on product having MRP inclusive of all taxes, purchased the product in question from OPs and as such now OPs estopped by their 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.
7. 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 OPs 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.
8. There is nothing in affidavit Ex.OP-2/1 of representative of OP No.2 as to at which conspicuous place of OP’s show room or outlet notice was displayed for charging extra VAT on the discounted price. Time, date, month or year of such display even not mentioned. So it is obvious that virtually notice to complainant was not given regarding condition of charging VAT extra on the discounted price. Being so, in view of above cited legal and factual position, act of charging VAT on the discounted price certainly is unfair trade practice due to which complainant entitled for refund of the excess charged amount with interest @ 6% per annum alongwith reasonable compensation for mental agony and harassment.
9. As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.87.63 N.P. with interest @ 6% per annum w.e.f. 19.02.2017 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
September 13, 2018.
(G.K. Dhir)
President
(Amrinder Singh Sidhu)
Member
(Mrs. Natasha Chopra)
Member
