Chandigarh

DF-II

CC/846/2017

Birjot Singh - Complainant(s)

Versus

Kapsons Fashion Pvt. Ltd., - Opp.Party(s)

Karamveer Singh Adv.

21 Dec 2017

ORDER

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

Consumer Complaint  No.	:	846 of 2017
Date  of  Institution	:	30.10.2017
Date   of   Decision	:	21.12.2017

 

 

 

 

Birjot Singh s/o Amrit Lal Singh r/o H.No.913, Phase-7, Mohali.

                   …..Complainant

Versus

1.       Kapsons Fashion Pvt. Ltd., through its Branch Manager, SCO 104-105, Sector 17, Chandigarh -160017.

 

2.       Kapsons Fashion Pvt. Ltd., through its Managing Director, Plot No.D-196, Industrial Area, Phase-8B, Mohali, Punjab-160061.

 

…..Opposite Parties

 

BEFORE:    SH.RAJAN DEWAN                           PRESIDENT

                   SMT.PRITI MALHOTRA                      MEMBER

 

ARGUED BY:

Sh.Yogesh K.Puri, Adv. for complainant.

                   OPs exparte.

 

PER RAJAN DEWAN, PRESIDENT

1.           In brief, the case of the complainant as alleged by him is that the OPs, in order to promote the sale of its products, offered discount @ 20% on the M.R.P. and he purchased a jacket of the MRP of Rs.3999/- vide Invoice dated 06.01.2017, Annexure C-1 for Rs.3359/- out of which a sum of Rs.159.96P was charged towards VAT @ 5% on the discounted price.  It has been averred that the MRP of the article was already inclusive of all taxes. He also objected to the charging of 5% VAT at the MRP of the article but to no effect.  Alleging deficiency in service for the above act & conduct of the OPs and also for the unfair trade practice resorted to by the OPs, this complaint has been filed by the complainant. 

2.           Despite due service through registered post, none appeared on behalf of the OPs and as such it was ordered to be proceeded against exparte vide order dated 08.12.2017.
3.           The complainant led evidence in support of the contentions.
4.           We have heard the Learned Counsel for the complainant and have also perused the record.
5.           The core question which survives for determination is whether VAT can be charged on the discounted price when MRP of a products is inclusive of all taxes? The answer to this question is in the negative.
6.           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. 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. When once it is displayed that the MRP is inclusive of all taxes, then in no circumstances the VAT can be added to it afterwards.
7.           In the present complaint, though the OPs had offered 20% discount on the article in question, still they charged 5% extra VAT on discounted price in spite of the specific mentioning of the maximum retail price (inclusive of all taxes). 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.
8.           After giving our thoughtful consideration, we are of the considered opinion that no one can charge any tax on the product where MRP is mentioned as inclusive of all taxes including VAT/other taxes etc. When MRP of the goods is inclusive of all taxes then VAT/other taxes cannot be charged separately; which establish that MRP includes VAT also and after discount no VAT can be charged, so on discounted product also VAT cannot be charged.  But as in the present complaint, it is quite clear vide Ann.C-2 that MRP of the item in question is ‘inclusive of all taxes’, so the charging of VAT @5% separately is clearly unfair trade practice resorted to by the OPs.
9.           A similar question arose for determination before our 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 the 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 5% VAT or tax, is certainly against the trade practice. 
10.           The ratio of the afore-cited judicial pronouncements is squarely applicable to the present lis. Therefore, the act of the OPs in charging VAT on discounted item, clearly proves deficiency in service having indulged into unfair trade practice on the part of the OPs, which certainly had caused immense mental and physical harassment to the complainant.
11.           For the reasons recorded above, the present complaint is allowed qua the OPs. The OPs are directed as under:-

a]       To refund the excess amount charged as 5% VAT i.e. Rs.160/- from the complainant.

b]       To pay an amount of Rs.500/- to the complainant as compensation for mental agony & physical harassment;

c]       To pay Rs.1100/- as litigation expenses.

12.           This order shall be complied with by the OPs 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 expenses.
13.           The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

 

		Sd/-	Sd/-
Announced		(RAJAN DEWAN)	(PRITI MALHOTRA)
21.12.2017		PRESIDENT	MEMBER