Haryana

Panchkula

CC/101/2019

RISHI KUMAR. - Complainant(s)

Versus

COBB APPARELS PVT.LTD. - Opp.Party(s)

KIRTI KUMAR,AVNISH SINGH,ASHISH BHATT.

28 Nov 2019

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,  PANCHKULA.

                                               

                       

Consumer Complaint No	:	101 of 2019
Date of Institution	:	11.02.2019
Date of Decision	:	28.11.2019

                                                                           

 

Rishi Kumar, S/o Sh. Somnath, R/o # 430/1, Pipli Wala Town, Manimajra, Chandigarh 160101

                                                                             ….Complainant

 

Versus

 

Cobb Apparels Pvt. Ltd. H.B.N. 152, Ground Floor, NH-22, Kalka Shimla National Highway, Village Dharmpur, Pinjore District Panchkula Haryana 134102, through its Manager or its any Authorized Representative.

 

                                                                ….Opposite Party

 

COMPLAINT UNDER SEC. 12 OF THE CONSUMER PROTECTION ACT, 1986.

 

 

Before:              Mr.Satpal, President.

                        Dr.Pawan Kumar Saini, Member.

                        Dr.Sushma Garg, Member.

 

 

For the Parties:   None  for the complainant. 

Mr.Sandeep Gupta, Advocate for the OP.

 

ORDER

(Satpal, President)

1.             The complainant has filed this complaint against the Op with the averments that he had purchased men sweater/woolen from the OP on 11.02.2017 after paying the consideration amount of Rs.631/-. The MRP of the said product was Rs.1,999 /- which was inclusive of all taxes and the Op in order to promote the sale of the articles offered a discount of 70% on the MRP on the products. After giving 70% discount on the product, the price of the product came to Rs.599/- which was inclusive of all taxes but in addition thereto the OP charged VAT @ 5.25% on the discounted price of the product which came to Rs.32/- (wrongly mentioned as Rs.31/-in the complaint), therefore, the complainant had to pay Rs.631/-. After seeking the bill, the complainant resisted the same but the OP forced him to pay the final amount of Rs.631/-. The pleading of the complainant went unheard and has left no other option but to pay the amount of Rs.631/- as the OP said that one’s bill has been made, the complainant has to pay the net payable amount. This act of the opposite party amounts to deficiency in service on its part. Hence, this complaint.

2.             Upon notice, OP has appeared to contest the present complaint by filing the written statement with the preliminary objections that present complaint is bad for non-joinder of necessary party; that the complaint is time barred. It is stated that VAT can be charged as per the provision of Haryana Value Added Tax Act, 2003 by Government of Haryana Notification. It is stated that the said amount which was charged for VAT has been deposited into the account of Government of Haryana and as such no benefit has been taken by the OP by charging the VAT amount from the complainant. The OP Company flashed the board of discount in the shop and no person was compelled or allured to purchase the goods, however the complainant as per the choice purchased the goods and paid the amount without any objection at the time of payment made by him to the OP. At the time of purchasing of goods, the complainant never raised any objection regarding the same. It is stated that the complainant does not fall within the ambit of Consumer Protection Act. It is further stated that the same complainant lodged the similar cases with similar pleas against the same OP, which shows the intention of complainant time and again to purchase from OP store. It is clever tactic of the complainant to file such type of false complaint to get extra money from the OP and it is clever tactic of the complainant to damage the image and reputation of the OP.

                On merits, it is an admitted fact that OP issued retail invoice bill for an amount of Rs.631/- including VAT @5.25% amounting to Rs.32/- as per notification of Government of Haryana. The OP Company is selling the goods as per the standard rate and concession/ discount given by the company from time to time and no other charges are levied.

3.             To prove his case, the learned counsel for the complainant has tendered the affidavit Annexure CA along with documents Annexure C-1 & C-2 into evidence and closed the same. On the other hand, the ld. counsel for the OP has tendered affidavit Annexure RA along with documents Annexure R-1 and R-2 and closed the evidence.

4.             We have heard the learned counsel for the OP and perused the record carefully and minutely.

                The issue involved for adjudication in the present complaint is whether the act on the part of the OP while charging the tax in the name of VAT/GST over the discounted price of a product is legally permissible and justifiable.

5.             Before proceeding further to discuss the case on its merit we deem it expedient to discuss the legal proposition as propounded by the Hon’ble State Commission U.T., Chandigarh and Hon’ble National Commission in their various judicial pronouncements.

6.             A similar question arose for determination before Hon’ble State Consumer Disputes Redressal Commission, U.T. Chandigarh in First Appeal No.210 of 2015, decided on 01.09.2015 in case titled as “Shoppers Stop and others Versus Jashan Preet Singh Gill and Others”, wherein it has been held that no one can charge more than the MRP and MRP includes all taxes including VAT/other taxes. When MRP is inclusive of all taxes, then VAT/other taxes cannot be charged separately. In another Appeal No.61 of 2016, decided on 18.02.2016, in case titled as “Benetton India Private Limited Vs. Ravinderjit Singh”, the Hon’ble State Consumer Disputes Redressal Commission U.T, Chandigarh while dismissing the appeal filed by the Appellant (Benetton India Pvt. Limited) has held that if it is clearly mentioned as MRP inclusive of all taxes, charging of 5% VAT or tax, is certainly against the trade practice.

The Hon’ble National Commission while disposing of the revision petition No.3477 of 2016 titled as M/s Aero Club (Woodland) Vs. Rakesh Sharma vide its order dated 04.01.2017 has declared the levying of tax i.e. VAT on the discounted price of the product as invalid and illegal after keeping in view the provisions of the Haryana Value Added Tax Act, 2003 Annexure R-2 as also the provisions contained in Section 2(d) of the Consumer Goods (Mandatory Printing of cost of production and Maximum Retail Price) Act, 2014.  As per aforesaid Section 2(d) of the said Act 2014, the “Maximum Retail Price” means such price at which the consumer goods shall be sold in retail and such price shall include all taxes levied on the goods. Further we have also gone through the order dated 09.02.2017 passed by the Hon’ble National Commission, New Delhi in revision petition No.3156 of 2016 wherein the Hon’ble National Commission, New Delhi has disapproved/depreciated the practice of the retailer/shopkeeper while charging of VAT on the discounted product.

7.             The Op has attempted to justify the charging of VAT/GST over the discounted price of the product by taking the shelter of provisions of Haryana Value Added Tax Act, 2003, which is available on the record as Annexure R-2. The ld. counsel vehemently contended that the Op is justified while charging the VAT/GST over the discounted price of the product as per provision contained in the Haryana Value Added Tax Act, 2003 as also in view of the fact that the same stands deposited with the Government of Haryana. The ld. counsel invited our attention towards the definition of “gross turnover” and the method of calculation of taxation as explained in Clause No.III of Section 2(1)(u) of this Act. The ld. counsel further invited our attention towards the various clauses of the said act such as Value Added Tax and the sale price as defined in the said act.

                The arguments advanced by the ld. counsel for the OP taking the shelter of the provisions of the aforesaid VAT Act are not acceptable to us in view of the clear proposition of law propounded by the Hon’ble State Commission as well as Hon’ble National Commission.

8.             Thus, the act of charging of VAT/GST over the discounted price of a product has been declared wrong and invalid by holding that the same tantamount to indulging into unfair trade practice by the Op. In the present case undisputedly the MRP of the product is Rs.1,999/- and after giving a discount over the said price, the balance amount comes to Rs.599/-. It is not disputed that the OP has charged the VAT/GST over the balance price i.e. the discounted price of the product, which is not permissible as per law laid down by the Hon’ble State Commission and Hon’ble National Commission as discussed above. 

9.             In the backdrop of the above stated factual position as also the legal preposition discussed above, we have no doubt with regard to the lapse and deficiency on the part of OP besides indulging in unfair trade practice as per Section 2(1)(R) of Consumer Protection Act while providing services to the complainant; hence, the complainant is entitled to relief.

10.            As a sequel to above, we partly allow the present complaint with the following directions to the Op:-

1. To refund a sum of Rs.32/- charged as VAT to the

complainant along with interest @ 9% per annum from the date of filing of present complaint till its realization.

2. To pay a sum of Rs.100/- to the complainant as

Compensation on account of mental agony and harassment.

3. To pay a sum of Rs.500/- to the complainant on

 account of litigation charges.

IV.    The OP is further burdened with a cost of Rs.2,000/- to be deposited in the account of Haryana State Council for Child Welfare,#650, Sector-16D, Chandigarh, the details of which are as under:-

i)      Bank Name                      Punjab National Bank, SCF 1-2,

                                                 Sector-22D, Chandigarh

ii)      Bank Branch Code      009500

iii)     IFSC  Code                PUNB 000 9500

iv)     Bank Account No.               0095000100483394

v)     Bank Branch MICR      160024016

Code    

vi)     PAN No.                    AAATH3003J

 

11.            The OP shall deposit the abovesaid amount of Rs.2,000/- within a period of one month from the receipt of copy of this order failing which the said amount shall carry an interest @9% per annum from the date of institution of the complaint till its deposition. After depositing the aforesaid amount in the above mentioned account, the OP shall furnish the challan/proof thereof with this office. In case of non-compliance of the direction with regard to deposition of cost/penalty in the above mentioned account, the office Assistant shall submit his report to the Forum about the same after three months from the date of this order.

12.            The OP is further directed to refrain from the unfair trade practice, in future, by way of indulging into levying of VAT/GST over the discounted price of a product. 

13.            The OP shall comply with the directions/order within a period of 30 days from the date of communication of copy of this order to OP failing which the complainant shall be at liberty to approach this Forum for initiation of proceedings under Section 25 and 27 of CP Act, against the OP. A copy of this order shall be forwarded, free of cost, to the parties to the complaint and file be consigned to record room after due compliance.    

Announced: 28.11.2019

 

Dr.Sushma Garg       Dr.Pawan Kumar Saini          Satpal

                  Member                 Member                  President

 

 

Note: Each and every page of this order has been duly signed by me.

 

 

 

 

                                        Satpal

                                           President