Chandigarh

DF-II

CC/267/2017

Ruchi Jindal - Complainant(s)

Versus

Firts Cry-Mahindra Ventrure Head Office at Rajashree Business Park, Plot No. 114, Survey No.338, Tad - Opp.Party(s)

Adv. Navneet Jindal

10 Jul 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	267 of 2017
Date  of  Institution	:	17.03.2017
Date   of   Decision	:	10.07.2017

 

 

 

 

Ruchi Jindal w/o Navneet Jindal, R/o House No.1195, Sector 42-B, Chandigarh.  

             …..Complainant

Versus

1]  First Cry-Mahindra Venture Head Office at Rajashree Business Park, Plot No.114, Survey No.338, Tadiwala Road, Nr.Sohrab Hall, Pune 411001 through its Manager/Authorised Person/Owner/Managing Director/Director.

2]  Digital Age Retail Pvt. Ltd., Survey No.80/6, Chokkahalli Village, Shiddlagata Main Road, Hoskote Taluk, Bangalore 562114, Karnataka, India through its Manager/Authorised Person/Owner/Managing Director/Director.

….. Opposite Parties  

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         MRS.PRITI MALHOTRA             MEMBER

                                SH.RAVINDER SINGH              MEMBER

 

 

For complainant(s)      : Sh.Naveen Jindal, Advocate  

 

For Opposite Party(s)   : Ms.Vindhya S.Mani, Advocate

 

 

PER PRITI MALHOTRA, MEMBER

 

 

          As per the case, the complainant in response to OP No.1 offering discount on the products on maximum retail price, purchased three items i.e. Zero Puff Sleeves Frock having MRP of Rs.195/- and Doreme Sleeveless Frock Floral having MRP of Rs.260/-, both carrying discount of 40% and Babyhug Sleeveless Lace Studded Top having MRP of Rs.649/- carrying discount of 49%.  However, when the said articles were delivered to her, she was charged extra Vat on all of them in the following manner:-

 

S.No.	Item	MRP	Price W/o VAT/CST	Price with VAT/CST	Difference Amount
1	Zero Puff..	195	117	124.02	7.02
2	Baby Hug..	649	330.99	350.85	19.86
3	Doreme	260	156	165.36	9.36
					36.24

 

It is averred that the maximum retail price of the said articles/products, mentioned above,  inclusive of all taxes (Vat also) and after applying discount, the extra vat should not have been levied on the discounted amount, but still the OPs put extra Vat and thereby illegally charged extra Vat of Rs.36.24/- in total on all three items, which is arbitrary and unsustainable. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint.

 

2]       The Opposite Parties have filed joint reply and while admitting the factual matrix of the case, stated that they have not, in any manner, double taxed or over charged the complainant for the purchased products.  It is submitted that there was no disparity in the discount offered upon the products to the complainant and the price that was actually charged from the complainant for the said products because the complainant was unequivocally informed that the VAT/CST charges would be applicable on the discounted price and therefore, the complainant was well aware of all the applicable charges on the purchased product both at the time of making the online purchase and at the time of receiving physical delivery of the product by virtue of the invoice.  It is pleaded that the charging VAT/CST on the discounted price is in compliance with all laws in force in India and the same was clearly and unambiguously conveyed to the complainant both at the time of online purchase of the product and thereafter, on physical receipt of the purchased product by virtue of the invoice.  It is also pleaded that the VAT so collected by the OPs are duly deposited before the concerned statutory authorities. Pleading no deficiency in service and denying rest of the allegations, the OPs have prayed for the dismissal of the complaint.

 

3]       Parties led evidence in support of their contentions.

 

4]       We have heard the ld.Counsel for the parties and have also perused the entire record.

 

5]       The ld. Counsel for the complainant, at the time of arguments, submitted that the complainant purchased three items i.e. Zero Puff Sleeves Frock having MRP of Rs.195/- and Doreme Sleeveless Frock Floral having MRP of Rs.260/-, both carrying discount of 40% and Babyhug Sleeveless Lace Studded Top having MRP of Rs.649/- carrying discount of 49%, but, when the said articles were delivered to her, she was charged extra Vat on all of them, to the tune of Rs.36.24/- in total. It is alleged that the Opposite Parties illegally charged extra VAT whereas the cost of the products as mentioned on the tags are inclusive of all taxes.  The counsel for the complainant further claimed that as the VAT has already been added to the said cost of the products, so the complainant cannot be charged extra tax by doing so. Submitted that the Opposite parties had not only indulged into unfair trade practice but also rendered deficient service to the complainant.

 

6]       On the contrary, the OPs have completely denied the allegations of the complainant and submitted that it has rightly charged the tax/Vat and deposited the same with the VAT department.

 

7]       In this backdrop, the core question which survives for determination is whether VAT can be charged on the discounted price when MRP of a product is inclusive all taxes and added in bill?

 

8]       It has been contended by the Opposite Parties that the complainant had clearly been informed before the purchase i.e. an online disclosure that VAT would be charged extra over the discounted sale price, therefore, no unfair trade practice can be attributable on its part.

 

         The Opposite Parties have miserably failed to produce on record any cogent, convincing and reliable piece of evidence in the shape of any rules/instructions/legal provisions authorizing them to levy/charge the amount of VAT on the product/item sold at discounted price which carried the price tag displaying the maximum retail price of the product/item in question, as inclusive of all taxes. Thus, the OPs have failed to discharge the burden of proof.

        

9]       The claim of the Opposite Parties that they have not charged anything above MRP of the product and sold the product on discounted price and thus can impose VAT is not tenable in the eyes of law. As the discount so offered by the OP is part and parcel of their promotional policy offering hefty discounts in order to attract/allure the gullible customers; who approach them under the misleading belief of getting hefty discounts declared by them which comes out to be an illusion when they are forced to pay a good amount of VAT illegally imposed on the discounted price.  We are of the opinion that the discount so offered by the OPs is offered from their own margins as per their own choice and are not pressurized to do so and ones it is mentioned in the price tag of any item/product as ‘inclusive of all taxes’ then none can add even a single penny on account of any tax. It can only be done in regards to the goods/products where its price does not include all taxes. 

 

10]      In our opinion, there is a difference between the remarks “Retail Price” and “Actual Price” of the goods. The MRP is inclusive of all taxes and a retailer can sell at a price below the MRP (Maximum Retail Price) because MRP is the maximum retail price allowed for that commodity and not the actual price. It is not the case of the Opposite Party that it charged VAT on the actual price of the item in question. A retailer can well reduce his margin built into MRP, while on the other hand, the actual price can be much lower than the MRP.

   

11]      Though Opposite Parties had offered discount on the articles in question, still they charged extra VAT on discounted price in spite of the specific mention of the maximum retail price inclusive of all taxes, as is evident from Annexure C-1. Since it is an offence to sell at a price higher than the marked price, so it is also not legal to charge any tax on the product/item carrying tag of maximum retail price inclusive of all taxes.     

 

12]      In these set of circumstances, we are of the concerted view that the customer/complainant is liable to pay extra amount of the VAT imposed by the Opposite Party only if the article is labelled as MRP “exclusive of all taxes”.  But it is quite clear vide Annexure C-3 that MRP of the product/item in question is ‘inclusive of all taxes’, so the charging of extra VAT is clearly unfair trade practice resorted to by the Opposite Parties. Thus the Opposite Parties are liable to compensate the complainant for their deficient act and for their indulgence into unfair trade practice.

 

13]      Our view is fortified by the latest pronouncement of the Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No.3477 of 2016 – M/s. Aero Club (Woodland) Vs. Rakesh Sharma, decided on 4^th Jan., 2017, as the controversy in issue has been laid at rest, wherein it has been held that:-

“14.   In our opinion, the advertisement in the above form is nothing but an allurement to gullible Consumers to buy the advertised merchandise at a cheaper bargain price, which itself was not intended to be the real “bargaining price” and, therefore, tantamounts to unfair trade practice, as found by both the Fora below. Significantly, under Section 2(d) of the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act, 2014, the “Maximum Retail Price” printed on the goods, a mandatory labelling requirement, at the relevant time, for pre-packaged goods, means “such price at which the consumer goods shall be sold in retail and such price shall include all taxes levied on the goods.” In that view of the matter, having seen the word “FLAT” in the advertisement, a consumer would be tempted to buy the goods under a bonafide belief that he would get a flat 40% off on the MRP. In our opinion, therefore, the defence of the Petitioners that they had charged VAT as per law is of no avail in so far as the issue at hand, viz. misleading advertisement, resulting in unfair trade practice, is concerned. We are in complete agreement with the Fora below that any discount falling short of “Flat 40%” on the MRP would amount to unfair trade practice, as defined in the Act.

 

 

14]      The ratio of the afore-cited judicial pronouncement is squarely applicable to the present lis. Therefore, the act of the Opposite Parties in charging VAT on discounted products, clearly proves deficiency in service having indulged into unfair trade practice on their part, which certainly had caused immense mental and physical harassment to the Complainant. 

 

15]      For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Parties not only for resorting to unfair trade practice but also for the deficiency in service towards the complainant and the same is accordingly allowed. The Opposite Party is directed as under:-

 

a]  To refund Rs.36.24/- i.e. the amount charged extra VAT on the discounted products having MRP inclusive of all taxes.  

 

b]  To pay a consolidated amount of Rs.2000/- to the complainant towards compensation on account of unfair trade practice and deficiency in service on the part of OPs;

c]  To pay litigation cost of Rs.1000/-.

 

         This order shall be complied with by the Opposite parties within a period of 30 days from the date of receipt of its copy, failing which they shall be liable to pay interest @9% per annum on amount as mentioned at sub-para (a) & (b) above from the date of this order till it is paid, apart from paying litigation cost.

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

10^th July, 2017                                                                                                                                                                       Sd/-

 (RAJAN DEWAN)

PRESIDENT

 

         

Sd/-

          (PRITI MALHOTRA)

MEMBER

 

 

Sd/-

(RAVINDER SINGH)

MEMBER