DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)
Consumer Complaint No.906 of 2017
Date of institution: 27.10.2017 Date of decision : 05.07.2018
Hanumant Kumar son of Late R.C. Jhingan, resident of K. No.311, Phase-6, Mohali.
…….Complainant
Versus
COBB Apparels Pvt. Ltd., SCF No.87, Phase-7, Sector 61, SAS Nagar, Mohali through its M.D./Proprietor/Incharge/Manager.
……..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 Kulwinder Singh, counsel for the complainant.
Shri Sandeep Gupta, counsel for the OP.
Order by :- Shri G.K. Dhir, President.
Order
Complainant after visiting outlet of OP on 05.10.2017 purchased trouser having MRP of Rs.2,199/- (inclusive of all taxes). Invoice bill for amount of Rs.925/- including GST @ 5% of amount of Rs.43.98 N.P. was issued by OP. Complainant raised objection regarding charging of extra GST by claiming that cost of the trouser was inclusive of all taxes, but OP claimed that it can charge extra GST as per notification issued by Taxation Authorities. Charging of extra GST on the discounted price is alleged to be an unfair trade practice and that is why complaint filed for seeking direction to OP to refund the extra received amount of Rs.43.98 N.P. on account of GST with interest. Compensation for mental agony and harassment of Rs.50,000/- and litigation expenses of Rs.33,000/- more claimed.
2. In reply filed by OP, it is claimed that complaint is bad due to non joinder of necessary parties and that complaint filed on false and baseless allegations because GST can be charged as per Govt. of India notification extraordinary Part- ii No.12 dated April 12, 2017, which is issued in view of Central Goods & Service Tax Act, 2017. Reference to Section 15 of CGST Act specifically made for claiming that value of supply not to include any discount, which is given before or at the time of supply, if such discount has been duly recorded in the invoice issued in respect of such supply. It is claimed in view of Section 15 (2) (a) of CGST Act that transaction value does not include GST and as such the GST has to be charged separately for these transactions having taxable value of Rs.879.60. Admittedly GST of amount of Rs.43.98 N.P. has been charged. That charged amount has been deposited in the account of Govt. of India and as such no benefit got by OP by charging this GST amount. OP Company flashed the board of discount in the shop. No person was compelled or allured to purchase the goods. Complainant purchased the goods in question as per his choice by paying the amount without any objection. Complaint is alleged to be barred by limitation. Further it is claimed that in view of non raising of objection regarding charging of extra GST from complainant at the time of purchase, complainant estopped by his act and conduct from filing this complaint. Moreover, in the bill itself it is specifically mentioned in condition No.7 that the dispute is subject to Delhi jurisdiction and as such complaint prayed to be dismissed. Admittedly OP issued retail invoice bill for amount of Rs.925/- inclusive of GST @ 5%. It is claimed that complainant has adopted clever tacit for filing such type of false complaints for extracting money from OP, and that too for tarnishing image and reputation of OP. OP Company is selling goods as per standard rates with concession of discount from time to time. Other averments of the complaint denied, by praying for dismissal of the complaint.
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. On the other hand, counsel for the OP tendered in evidence affidavit Ex.OP-1/1 of Shri Anil Kumar Aggarwal, authorised representative of the OP alongwith documents Ex.OP-1 and Ex.OP-2 and thereafter closed evidence.
4. Written arguments not submitted by any of the parties. Oral arguments heard and records gone through.
5. From pleadings of parties and the affidavits submitted on behalf of the parties, it is made out that complainant purchased the product in question from OP having MRP of Rs.2,199/- by paying GST of amount of Rs.43.98 N.P. through invoice Ex.C-1. Copy of tag of the product Ex.C-2 produced for establishing that the product in question was having MRP of Rs.2,199/- inclusive of all taxes. So certainly submission advanced by counsel for complainant has force that as MRP was inclusive of all taxes and as such on the discounted price GST could not have been charged from the complainant. Contention of counsel for complainant in this respect has force because practice of charging VAT on the discounted price of a product having MRP inclusive of all taxes has been held to be unfair trade practice as per law laid down 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 GST on the discounted price of the products having MRP inclusive of all taxes in this case certainly is an unfair trade practice.
6. Counsel for OP contends that complainant has adopted practice of filing such like complaints after purchasing the products from market and as such complaint is filed for abusing process of law. That submission of counsel for OP has no force because if the act of charging VAT on the discounted price of product having MRP has been declared as unfair trade practice by law laid down by Hon’ble National Commission, then certainly complainant has right to seek redressal of grievance from the Consumer Forum, as and when unfair trade practice adopted by the service provider.
7. Counsel for OP takes us through notification Ex.OP-2 issued by Ministry of Law & Justice for arguing that in view of Central Goods & Service Tax Act, 2017, OP duty bound to collect GST from customers for depositing the same in Govt. Treasury. Specific attention drawn to Section 15 (2) (a) of CGST Act 2017 for arguing that the value of supply to include all taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act. These charges to be collected separately by supplier as per Section 15 (2) (a) of CGST Act and as such it is contended that in view of statutory obligations on OP, if it collected the GST from complainant, then no illegality or impropriety committed by OP. Even if Section 15 (2) (a) of CGST Act provides that obligation is on the supplier of goods to charge GST, despite that it is to be kept in mind that this CGST enacted for making provisions for levy of taxes on inter state supply of goods or service or both by Central Govt. and for matters connected therewith or incidental thereto only. So virtually CGST Act enacted for collection of taxes on the provided services or the goods sold, but not for purpose of infringing the rights available to a consumer on account of contractual obligations arising out of the contract arrived at between consumer and service provider or the seller. So even if liability of supplier is to collect the tax under CGST Act, but that tax can be collected not in violation of undertaken contractual obligations with customers because the contractual obligations arising from the terms of contract between consumer and supplier stands on independent footing than that of the statutory obligations of supplier/seller to pay tax to the Govt. Nowhere in CGST Act, 2017 it is laid down that if a contract for payment of CGST or VAT or any other tax is the obligation undertaken by the supplier/seller on basis of separate contract with its customers, then customers will bear the obligation of paying taxes. Rather obligation of collecting GST is only cast on the supplier. That obligation of collecting tax is because of business activity carried by the supplier/seller. After going through Section 15 (2) (b) of CGST Act, it is made out that value of the supply will include the amount that the supplier is liable to pay in relation to such supply , but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both. So this section 15 (2) (b) of CGST Act virtually provides that value of supply to include the amount which has been incurred by recipient of supply, but not included in the price actually paid or payable for the goods or services or both. So virtually Section 15 lays criteria for determining the value of supply by making mention that if the recipient of supply (customer) has claimed/received any amount which is not included in the price actually paid or payable for the goods, even then the valuation thereof to be included in the value of taxable supply or transaction value. The transaction value, to be calculated for CGST purposes, to be assessed for ascertaining the tax liability and not for any other purpose. Rather if the recipient of supply namely the consumer has got any benefit, on account of discount offer, then though tax is payable on the value of supply including the benefit received by the consumer, but despite that liability to pay the tax to remain of the supplier of goods. So referred Section 15 of CGST Act nowhere provides that contractual obligation undertaken by supplier of goods through a contract with its customers will stand overshadowed by provisions of CGST Act.
8. As the product in question purchased by complainant after visiting outlet of OP, where the product in question was lying stacked or displayed and as such certainly while making invitation of offer by OP, it was specifically disclosed through price tag Ex.C-2 that MRP will be inclusive of all taxes. On this invitation of offer being provided by OP, complainant agreed to purchase the product in question by offering the price and thereafter invoice Ex.C-1 was issued and as such it is obvious that complainant purchased the product on discounted price with understanding that GST will not be charged extra on discounted price because MRP is inclusive of all taxes. There is no material produced on record by OP to establish that any display was put in the outlet for disclosing the customers that GST will be charged extra on the discounted price. Rather in written reply it is claimed that OP Company flashed the board of discount in the shop and as such it is obvious that on invitation of offer of discount being flashed by OP, complainant entered in premises of OP for purchase of product in question on discounted price. When such is the position, then certainly charging of GST extra on the discounted price is unfair trade practice as held above in the context of factual and legal position. Collection of GST by supplier is because of statutory obligation on it and as such it was for OP to disclose by display of board or otherwise to every customer that on the discounted price, GST will be charged extra. However, no such display put forth on the outlet or at any other conspicuous place and as such charging of GST on the discounted price is against the terms of contractual obligation undertaken by OP to sell the product on MRP inclusive of all taxes.
9. No other point argued.
10. As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.43.98 N.P. with interest @ 6% per annum w.e.f. 05.10.2017 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
July 05, 2018.
(G.K. Dhir)
President
(Amrinder Singh Sidhu)
Member
(Mrs. Natasha Chopra)
Member
