DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)
Consumer Complaint No.630 of 2016
Date of institution: 26.09.2016 Date of decision : 01.02.2018
Raman Bansal son of Shri Ravinder Kumar, resident of House No.366, Huda Plot, Sector 19, Panchkula.
…….Complainant
Versus
1. Future Retail Ltd. (Big Bazar) through its Managing Director/Store Manager, Paras Downtown, Delhi Ambala Highway Zirakpur.
2. Future Retail Home Office, 9th Floor, Tower C, Park, L.B.S. Marg, Vikhroli (West), Mumbai 400083.
……..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 Ankit Gupta, counsel for the complainant. Shri Ishant Negi, counsel for the OPs.
Order by :- Shri G.K. Dhir, President.
Order
Complainant purchased a Jean & T Shirt vide bill dated 14.08.2016 from OPs after knowing that for promoting sale of the products, OPs have offered flat 50% discount. OPs charged Rs.160.77 N.P. towards VAT on the discounted MRP price, despite the fact that the same is not permissible as per regulations and notification issued by Taxation Authorities. By pleading deficiency in service and after serving legal notice through counsel dated 05.09.2016, this complaint filed for seeking refund of excess charged VAT amount of Rs.160.77 N.P. Compensation for deficiency in service and adoption of unfair trade practice of Rs.50,000/- but compensation for harassment of Rs.25,000/- and litigation expenses of Rs.15,000/- claimed alongwith interest @ 24% per annum.
2. In reply submitted by OPs, it is pleaded inter alia as if complaint filed for abusing the process of law with motive of harassing the OPs; complainant estopped by his act and conduct from filing the present complaint. The complainant has not placed on record even a single document for showing as if OPs charged tax on tax from complainant and that the dispute involved requires adjudication by way of examination and cross examination of witnesses, due to which matter should be relegated to the Civil Court of competent jurisdiction. Besides, it is claimed that complaint is pre-mature. Factum regarding purchase not denied but each and every other allegation of the complaint denied by claiming that the complainant has wrongly projected the entire issue so as to mislead this Forum. In fact MRP of the product is inclusive of all taxes including VAT. Whenever a company comes out with any promotional sale or discount offering scheme, then MRP of each product, as offered for sale under the scheme stands, reduced to the final sales value (FSV). It is claimed that FSV means selling price to the customer plus applicable sales tax (including VAT/CST). So all products to be sold under the scheme during promotional sales or discount offerings are to be sold on FSV provided the same does not exceed MRP. While offering discount, the company reduces its profit margin. By doing so, the OPs offered to sell the products lower than the MRP. OPs charged Rs.160.77 N.P. as VAT. Sale price/discount price is different from MRP. VAT collected is deposited with the concerned authorities. Invoice issued by the OPs is self explanatory because the same gives the breakup of the amount charged from the complainant. Complainant made payment after fully satisfying and going through the instructions displayed at the time of sale. Price offered through sale price/discount price is admitted by the complainant.
3. Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith documents Ex.C-1 to Ex.C-3 and thereafter closed evidence.
4. Counsel for the OPs tendered in evidence affidavit Ex.OP-1/1 of Jitender Sharma, Senior Executive (Admn.) alongwith document Ex.OP-1 and thereafter closed evidence.
5. Written arguments submitted by the OPs but not by the complainant. Oral arguments heard and records gone through.
6. Purchase of products in question by complainant from OP No.1 established by invoice Ex.C-1. In the invoice mention regarding base amount, VAT charged and the discounted amount is made. On three of the items mentioned in bill Ex.C-1, VAT charged after giving discount on an item of MRP of Rs.699.30 N.P. discount of Rs.299.70 N.P given and thereafter VAT of Rs.39.89 N.P. charged. Likewise after giving discount on two other items VAT of amount of Rs.60.44 N.P. each charged by mentioning the base price thereof as Rs.999/- each. Other items purchased through invoice Ex.C-1 does not make reference of the discounted price. In view of that, counsel for complainant admits that the dispute is raised only regarding purchased products on which VAT charged after giving of discount. That charged VAT after giving of discount on three items is of amount of Rs.160.77 N.P., split of which is Rs.39.89 N.P. + Rs.60.44 N.P. + Rs.60.44 N.P. Act of charging VAT on the discounted price has been declared as an unfair trade practice 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 decided on 14.01.2017 bearing Revision Petition No.3477 of 2016. Similar is the view taken in case titled as M/s Aero Club Vs. Ravinder Singh Dhanju decided on 23.05.2017 bearing First Appeal No.136 of 2017 by Hon’ble State Consumer Disputes Redressal Commission, UT Chandigarh. After going through ratio of these cases, it is made out that when MRP is inclusive of all taxes, then VAT/other taxes cannot be charged separately, meaning thereby that after discount on the MRP, no VAT can be charged. Same is the position in the case before us and as such act of charging VAT after giving of discount is unfair trade practice due to which complainant suffered mental tension and agony and as such he is entitled for compensation for mental harassment and agony but to reasonable extent.
7. Counsel for the OPs vehemently contends that FSV means selling price including tax on discounted price provided the same does not exceed MRP. That submission of counsel for the OPs goes against ratio of the above cited cases and as such the same has no force. Even if appeal against the decision given by Hon’ble National Commission may be pending before the Hon’ble Supreme Court of India, despite that in view of non grant of any stay on operation of the judgment given in above cited case of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra), law laid down in the cited cases has to prevail. Order 41 Rule 5 CPC specifically provides that mere filing of appeal does not amount to grant of stay by the appellate court. On the analogy of same proposition of law, it has to be held that even if SLP before Hon’ble Supreme Court of India may have been preferred against the order of Hon’ble National Commission, despite that the same not to operate as an order of stay. Being so, complainant entitled for refund of the excess charged amount of Rs.160.77 N.P. with interest @ 6% per annum from the date of issue of invoice Ex.C-1 till payment.
8. As a sequel of above discussion, the complaint is allowed in terms that the OPs to refund the excess charged amount of Rs.160.77 N.P. with interest @ 6% per annum w.e.f. 14.08.2016 till payment. Compensation for mental harassment and agony of Rs.2,000/- and litigation expenses of Rs.2,000/- more allowed in favour of complainant and against the OPs. Payment of these amounts of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of order. Certified copies of the order be supplied to the parties free of cost and thereafter the file be indexed and consigned to the record room.
Announced
February 01, 2018.
(G.K. Dhir)
President
(Amrinder Singh Sidhu) Member
(Mrs. Natasha Chopra)
Member
