Chandigarh

DF-I

CC/389/2016

Pawan Kumar - Complainant(s)

Versus

Giovani Fashion Ltd. - Opp.Party(s)

In person

01 Aug 2017

ORDER

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

============

Consumer Complaint  No	:	CC/389/2016
Date  of  Institution	:	30/05/2016
Date   of   Decision	:	01/08/2017

 

 

 

 

 

Pawan Kumar, R/o H.No. 555, Sector 18-B, Chandigarh.

 

………… Complainant.

 

VERSUS

 

Giovani Fashion Limited Punjab, SCO 64, Sector 17-C, Chandigarh, through its Prop./Owner – Satpal Kapoor, presently R/o H.No. 1712, Sector 34-D, Chandigarh.

 

………… Opposite Party.

 

BEFORE:   SMT.SURJEET KAUR             PRESIDING MEMBER

          SH.SURESH KUMAR SARDANA      MEMBER

 

Argued by: Complainant in person.

            Sh. Ankur Bali, Counsel for Opposite Party.

 

PER SURESH KUMAR SARDANA, MEMBER

 

 

          Briefly stated, the Complainant had purchased a Garment from the Shop of Opposite Party i.e. Giovani Fashion Limited Punjab on 24.01.2016 (Sale Invoice/ Cash Memo Annexure C-1). It has been averred that the MRP of the said Garment was Rs.7699.00/- which was inclusive of all taxes (Price Tag Annexure C-2). It has been alleged that the Opposite Party had charged tax at the rate of 5% on MRP (i.e. Rs.7699/- + Tax @5%) which comes to Rs.8083/- and after giving discount of 50%, demanded an amount of Rs.4042.00/- from the Complainant. The complainant accordingly raised objection relating to charging of extra VAT as the cost of the Product was inclusive of all taxes and VAT had already been added to the said cost, but, the officials/employees of the Opposite Party did not agree. Hence, alleging the aforesaid act & conduct of the Opposite Party as deficiency in service and unfair trade practice, the Complainant has filed the present Complaint.

 

2.      Notice of the complaint was sent to Opposite Party seeking its version of the case.

 

3.      Opposite Party in its reply, while admitting the factual aspects of the case has pleaded that Sh. Sat Pal Kapoor had taken franchisee of M/s Giovani Fashion Limited and has already terminated the said franchisee on 31.03.2016 and as such, Sh. Sat Pal Kapoor has nothing to do with M/s Giovani Fashion Limited and any claims arising therefrom. The retail bill was also issued by the Company under its name and not by Sh. Sat Pal Kapoor, as such, Sh. Sat Pal Kapoor had never sold any article to the Complainant nor charged any tax from the Complainant. Pleading that there is no deficiency in service or unfair trade practice on its part, Opposite Party has prayed for dismissal of the complaint.

 

4.      The Complainant also filed rejoinder to the written statement filed by the Opposite Party, wherein the averments as contained in the complaint have been reiterated and those as alleged in the written statement by the Opposite Party have been controverted.

 

5.      Parties were permitted to place their respective evidence on record in support of their contentions.

 

6.      We have heard the Complainant in person and learned counsel for the Opposite Party and have also perused the record with utmost care and circumspection.

 

7.      The contention of the learned counsel for the Opposite Party that Sh. Sat Pal Kapoor has nothing to do with M/s Giovani Fashion Limited and any claims arising therefrom in view of the fact that he has already terminated the said franchisee on 31.03.2016, to our mind, does not hold good in the face of Sale Invoice/ Cash Memo dated 24.01.2016 vide which the Complainant was sold the Garment in question. Therefore, Opposite Party cannot take the plea that Sh. Sat Pal Kapoor had never sold any article to the Complainant nor charged any tax from him.

 

8.      The case of the Complainant is that he was charged 5% extra VAT of Rs.183/- by the Opposite Party for the Garment purchased by him with MRP of Rs.7699/- (which was inclusive of all taxes) after giving a discount of under a promotional offer.

 

9.      In this backdrop, the core question which falls for determination is whether after discount VAT can be charged or not? Having bestowed our anxious consideration to the matter, we are of the opinion that in the light of the material on record, answer to the question posed has to be in the negative.

 

10.      It has been contended by the Opposite Party that it had prominently mentioned displayed in the Store that discount is exclusive VAT, therefore, no unfair trade practice can be attributable on its part. However, we do not find any merit in this contention, for the simple reason that the Opposite Party has miserably failed to produce on record any cogent, convincing and reliable piece of evidence in the shape of any rules/ instructions/ guidelines, authorizing it to levy/ charge the amount of VAT in question on the MRP, which is mentioned as “inclusive of all taxes” from the susceptible consumers like the Complainant. Needless to mention here that the Opposite Party has miserably failed to refer to any particular provision of law which permits the imposition of tax on the goods which have already been tagged as ‘inclusive of all taxes’, in order to justify its stand. In our opinion, the MRP of any product tagged as ‘inclusive of all taxes’ establish that no more tax is required to be levied.

 

11.      Learned Counsel for the Opposite Party argued that it has not charged anything above MRP of the product in question and thus can impose VAT. This stand of the Opposite Party is bereft of any force as the discount so offered is part and parcel of its promotional policy showing hefty discounts in order to attract/ allure the gullible customers; who approach them under the misleading belief of getting hefty discounts declared by it, which comes out to be an illusion, when they (customers) are forced to pay a good amount of VAT illegally imposed.  We are of the opinion that the discount, so offered by the Opposite Party is offered from its own margins, as per its own choice, and is not pressurized to do so, and once the price of the product is mentioned 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.  At any rate, there is a substantial 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. 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.

 

12.      After giving our thoughtful consideration, we are of the considered opinion that no one can charge more than the MRP and MRP includes all taxes including VAT/other taxes. When MRP is including all taxes then VAT/other taxes cannot be charged separately. Meaning thereby that MRP includes VAT and after discount no VAT can be charged, so on discounted product also VAT cannot be charged if VAT is included in MRP. 

 

13.      At any rate, if the Opposite Party had offered discount on the article purchased by the Complainant/ Customer, then it is bound to sell the article after discount. Though Opposite Party had offered discount on the article in question, still it charged extra VAT @5% on discounted price. Once MRP is inclusive of all taxes, charging of extra VAT or tax, to our mind, is against the trade practice. Here we are fortified by the similar view taken by the Hon’ble State Consumer Disputes Redressal Commission, Bangalore, in Appeal No. 3723 of 2011, titled as “The Branch Manager, M/s Shirt Palace Branch, Black Bird Showroom Vs. Chandru H.C.”, decided on 16.01.2014. A similar question arose for determination before the 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 including all taxes then VAT/other taxes cannot be charged separately.

 

14.      In a recent decision in 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 extra VAT or tax, is certainly against the trade practice.

 

15.      In Revision Petition No. 3477 of 2016 titled as “M/s Aero Club (Woodland) Versus Rakesh Sharma”, decided on 04.01.2017, along with other connected Revision Petitions No.3479 to 3483 of 2016, the Hon'ble National Consumer Disputes Redressal Commission, has held that any discount falling short of “Flat 40%” on the MRP would amount to unfair trade practice, as defined in the Act.  

 

16.      The ratio of the aforecited judicial pronouncements are squarely applicable to the present lis. Therefore, the act of the Opposite Party in charging VAT on discounted product, clearly proves deficiency in service on its part, which certainly caused immense mental and physical harassment to the Complainant.

 

17.      For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Party, and the same is allowed. The Opposite Party is directed to:-

 

[a]  Refund excess charged VAT of Rs.183/- to the Complainant

 

[b]  Pay Rs.2,000/- as compensation on account of deficiency in service and causing mental and physical harassment to the Complainant; 

 

[c] Pay Rs.1,000/- towards costs of litigation;

 

18.      The above said order shall be complied within 30 days of its receipt by the Opposite Party; thereafter, Opposite Party shall be liable for an interest @12% per annum on the amounts mentioned in sub-paras [a] & [b] above from the date of institution of this Complaint, till it is paid, apart from costs of litigation mentioned in sub-para [c] above. 

 

19.      Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

01^st August, 2017                                               Sd/- 

(SURJEET KAUR)

   PRESIDING MEMBER

 

                                            Sd/-

 (SURESH KUMAR SARDANA)                                                                                                      MEMBER