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

Consumer Complaint No.1298 of 2018

                                                Date of institution:  14.12.2018                                                  Date of decision   :  16.12.2019

Daljeet Singh son of Shri Baldev Singh, resident of House No.1635, Sector 51, Chandigarh.

…….Complainant

Versus

Converse Future Lifestyle Fashion Limited, F-34, North Country Mall, Kharar, 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 complainant.

                OP Ex-parte.

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

Order

                  Complainant purchased articles by paying price of Rs.462/- on 30.06.2017. MRP of the said products was Rs.799/- and after giving discount of 50% on the MRP, payable price was Rs.399/-. Rs.5/- charged for carry bag alongwith Rs.56/- as VAT @ 14%.  Charging of VAT  of Rs.56/- on the discounted price alleged to be unfair trade practice and that is why this complaint for seeking refund of VAT amount of Rs.56/- alongwith  compensation for mental harassment and agony of Rs.50,000/-, but litigation expenses of Rs.15,000/-.

2.             In reply filed by OP, it is pleaded inter alia as complaint not maintainable because the same filed for harassment and blackmailing the OP by way of extracting money. As per advertisement boards displayed inside the store of OP, VAT is supposed to be charged extra on the discount price. OP is division of FRL incorporated under the Companies Act, 1956 and that is why it is carrying on work of sale of garments through franchise. Admittedly complainant visited shop of OP on 30.06.2017. Complainant after examining many Colour Plus Outer Wears, purchased Outer Wear for Rs.462/- after availing 50% discount on MRP. MRP on the label of the product mentioned in view of provisions of Legal Metrology Act, 2009 and Legal Metrology (Packaged Commodities) Rules, 2011. VAT is charged on the sale price of the product. Admittedly OP collected Rs.56/- towards VAT on the discounted price of Rs.399/-. That charged VAT amount has been paid to the Govt. of Punjab. As per Value Added Tax Act, 2005 VAT to be charged extra. Other averments of the complaint denied.

3.             After submission of reply by OP none appeared for OP and as such was OP was proceeded against ex-parte.  

4.             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 complainant and going through produced record, this complaint is decided

5.             OP through written reply admitted as if MRP of the products was Rs.799/- and discount of 50% was offered on the said products sold to complainant through invoice Ex.C-1. So certainly as per admission of OP, payable price after discount was Rs.399/-. Admittedly VAT amount of Rs.56/- charged on the discounted price. So certainly OP adopted unfair trade practice by charging VAT on the discounted price despite the fact that MRP is always 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 product 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 MRP always mentioned for disclosing the price inclusive of all taxes and as such virtually OP by its own representation made known complainant as if MRP will be inclusive of all taxes. In view of this representation, now OP estopped by its act and conduct from claiming that VAT to be charged extra on the discounted price as per display boards inside the OP store. Law on the subject referred above is to the contrary and as such benefit of provisions of Punjab Value Added Tax Act, 2005 cannot be got by OP.

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 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.

8.             As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.56/- with interest @ 6% per annum w.e.f. 30.06.2017 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

December 16, 2019.

                                                                (G.K. Dhir)

                                                                President

(Mrs. Natasha Chopra)

Member