Chandigarh

DF-II

CC/387/2017

Sukhwinder Singh Manchanda - Complainant(s)

Versus

Kapsons Retail Pvt. Ltd., C/o Puma - Opp.Party(s)

Ravi Inder Singh Adv. & Abhay Singh Gill Adv.

07 Jul 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

U.T. CHANDIGARH

Consumer Complaint  No.	:	387 of 2017
Date  of  Institution	:	16.11.2016
Date   of   Decision	:	07.07.2017

 

 

 

 

Sukhwinder Singh Manchanda s/o Sh.Gurdip Singh Manchanda r/o H.No.92, Sector 33-A, Chandigarh

                   …..Complainant

Versus

 

Kapsons Retail Pvt. Ltd., c/o PUMA through its Authorized Representative, First Floor, Elante Mall, Phase-I, Chandigarh.

 

….. Opposite Party

 

BEFORE:    SH.RAJAN DEWAN                           PRESIDENT

                   SMT.PRITI MALHOTRA                    MEMBER

 

ARGUED BY:       

Sh.Manish Sharma, Adv. Proxy for Sh.Abhay Singh Gill, Advocate for complainant.

                   OP exparte.

 

PER RAJAN DEWAN, PRESIDENT

1.           In brief, the case of the complainant is that the OP, in order to promote the sale of its products, offered discount @ 50% on the M.R.P. and he purchased one sweat pants of the MRP of Rs.3999/- vide Invoice dated 26.01.2017, Annexure C-1 for Rs.2099.48P out of which a sum of Rs.99.98 P 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 OP  and also for the unfair trade practice resorted to by the OP, this complaint has been filed by the complainant. 

2.           Despite due service through registered post, none appeared on behalf of the OP and as such it was ordered to be proceeded against exparte vide order dated 30.06.2017.
3.           The complainant led evidence in support of his 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 product 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 OP had offered 50% 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 product/item in question is ‘inclusive of all taxes’, so the charging of VAT @5% separately is clearly unfair trade practice resorted to by the OP.
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 2017, 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 are squarely applicable to the present lis. Therefore, the act of the OP in charging VAT on discounted product, clearly proves deficiency in service having indulged into unfair trade practice on the part of the OP, 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 OP. The OP is directed as under:-

a]       To refund the excess amount charged as 5% VAT i.e. Rs.99.98P (say Rs.100/-) from the complainant.

b]       To pay an amount of Rs.1000/- 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 OP 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.

Announced		Sd/-	Sd/-
07.07.2017		(RAJAN DEWAN)	(PRITI MALHOTRA)
		PRESIDENT	MEMBER