DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)

Consumer Complaint No.175 of 2018

                                                Date of institution:  09.02.2018                                                  Date of decision   :  09.01.2019

Bharat Dawar son of Shri Ashok Kumar, resident of House No.1263, Sector 34-C, Chandigarh.

…….Complainant

Versus

Lifestyle International Pvt. Ltd. The North Country Mall, NH 21, Mohali-Kharar Road, Mohali-160118  through its Proprietor/Manager/Authorised signatory.

                                                                 ……..Opposite Party

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Mrs. Natasha Chopra, Member.

Present:     Shri Sahil Dawar, counsel for complainant.

                Shri Saurabh Gulia, counsel for the OP.

Order by :-  Shri G.K. Dhir, President.

Order

                  MRP of two products (trousers) purchased by complainant was Rs.2699/- each and after giving discount of 40%, the same turned to be Rs.3,240/-. OP charged Rs.3401/- including Tax/GST of amount of Rs.161.92 N.P. That charging alleged to be unfair trade practice because MRP was inclusive of all taxes. Prayer, therefore, made for directing OP to refund extra charged Tax/GST amount of Rs.161.92 and pay compensation for mental harassment and agony of Rs.40,000/-, but litigation expenses of Rs.20,000/-.

2.             In reply filed by OP, it is pleaded inter alia as if complaint is false, frivolous and vexatious being filed without any cause of action and is not maintainable due to missing of ingredients of Section 2 (c)  of the Consumer Protection Act.  Perusal of invoice shows that OP had given discount on MRP of the products and has charged only a portion of the applicable tax on the discounted price. Major portion of the tax has been borne by the OP. GST has been charged on the transaction and thereafter the same deposited with the concerned department as per mandate of law. Indirect tax regime has travelled from VAT to GST resulting in increase of said tax from 5% to 12%. However, to keep customers unaffected, tax at the old VAT rate of 5% has been charged, but rest 7% paid by OP from its pocket to the concerned department. Matter in question relates to taxation and as such this Forum alleged to be having no jurisdiction. OP has not charged any GST separately and the total amount collected from the complainant is less than MRP valuation mentioned in the price tag. Admittedly discount of 40% on purchased product was offered. Offer of discount was widely advertised and displayed on the Lifestyle Store for giving notice of charging of tax to the customers. As the tax charged as per rules and as such allegation of deficiency in service denied, but by claiming that sale price defined under Central Sales Tax Act and Punjab VAT Act, 2005 means the amount payable to a dealer as consideration for sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade. OP is entitled to charge and collect GST after deducting discount from the printed MRP and the same to be taken as sale price. On the advertisement of discount offer, it was clearly mentioned “Tax Extra”. Complainant might have missed to notice this fact. In case complainant was not agreeing with the OP for charging tax, then the invoice could have been got cancelled, but complainant choose to raise no concern in that respect and as such complaint alleged to be filed with malafide intention and for unjust enrichment. By denying other allegations of the complaint , prayer made for dismissal of the complaint.

3.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith documents Ex.C-1 and Ex.C-2 and thereafter closed evidence. On the other hand, counsel for the OP tendered in evidence affidavit Ex.OP-1/1 of Shri Baljit Talwar, authorised signatory of the OP alongwith document Ex.OP-1 and thereafter closed evidence. 

4.             Written arguments not submitted by any of the parties. Oral arguments heard and records gone through.

5.             It is admitted case of OP that discount @ 40% was offered and thereafter tax of amount of Rs.161.92 N.P. collected from complainant. That fact is borne from contents of invoice Ex.C-1. Copies of tags Ex.C-2 establishes that MRP was inclusive of all taxes and as such certainly amount of Rs.161.92 N.P. has been collected by OP from complainant on the discounted price.  Even if OP may have to bear 7% of the collected GST amount and complainant had to pay only 5% of the chargeable tax, despite that one thing is clear that actually Rs.161.92 N.P. has been collected by OP from complainant as tax on the discounted price.  Practice of charging tax on the discounted price having MRP inclusive of all taxes has been deprecated 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 bearing Revision Petition No.3477 of 2016 decided on 04.01.2017 as well as in case bearing First Appeal No.136 of 2017 titled as M/s Aero Club Vs. Ravinder Singh Dhanju decided on 23.05.2017 by Hon’ble State Consumer Disputes Redressal Commission, UT Chandigarh.  Ratio of both these cases fully applicable to the facts of the present case. So practice of charging tax on the discounted price of the products having MRP inclusive of all taxes in this case certainly is unfair trade practice.

6.             Even if tax to be charged from the buyer, despite that the terms of such practice can be changed by mutually arrived at contract through which the seller may undertake liability to pay tax on the discounted price of a product having MRP inclusive of all taxes. It was OP itself who professed through tags Ex.C-2 that MRP will be inclusive of all taxes and as such on the discounted price, OP by such undertaking bound to pay taxes. Complainant on representation of OP of discount offer on product having MRP inclusive of all taxes, purchased the product in question from OP and as such now OP estopped by its act and conduct from claiming that tax to be charged extra on the discounted price, especially when law on the subject referred above is to the contrary.

7.             Provisions of Sales Tax Act or VAT Act 2005 stands on different footing than that of beneficial provisions of Consumer Protection Act. Assessment of turnover of a trader for purpose of sales tax to be done under the provisions of taxation provisions for collecting revenue for the State, but under the garb thereof benefit of beneficial provisions of Consumer Protection Act cannot be denied to the consumers. So even if there may be responsibility of OP to collect tax on the sold products, but despite that it is bound by its open offer of not charging tax extra on the products having MRP inclusive of all taxes.

8.             It is also contended by counsel for the OP that GST is indirect tax which is bound to be collected by the vendor from the purchaser for depositing the same in the Govt. Department and as such no unfair trade practice adopted by the OP, particularly when as per display by the OP, the tax to be charged extra on the discounted price. So long as the law laid down by Hon’ble National Commission in case M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma   is not set aside, the same to govern the field qua pending cases or the cases to be decided by the Consumer Forums. Being so, the decision given by Sales Tax Authorities is not to apply to such like consumer complaints. So benefit from the ratio of case Deputy Commissioner of Sales Tax (Law), Ernakulam Vs. Advani Oorlikon (P) Ltd., AIR 1980 SC 609 cannot be gained by counsel for the OP because benefit of ratio of that case available when an assessment of the turnover of the assessee  for the purpose of sales tax collection to be made. In this case before us, provisions of Sales Tax Act have no relevancy because no assessment for computation of assessee’s turnover is to be done. So certainly, the complaint is maintainable and complainant on account of suffered mental agony and harassment entitled for compensation and also to litigation expenses, but to reasonable amount. 

9.             Though it is contended that advertisements like Ex.OP-1 displayed for notice of consumers that tax to be charged extra on the discounted price, but there is nothing on the record to suggest as to at which conspicuous place of OP’s show room, such advertisement was put and as such virtually due notice of the scheme of charging extra tax on discounted price is not given to complainant. It is the claim of complainant put forth in the complaint as well as in the submitted affidavit Ex.CW-1/1 that he raised protest regarding charging of extra tax on the discounted price of the product having MRP inclusive of all taxes and as such it is not a case in which complainant paid tax on the discounted price without protest.

10.            As a sequel of above discussion, complaint is allowed with direction to OP to refund excess charged amount of Rs.161.92 N.P. with interest @ 6% per annum w.e.f. 04.07.2017 till payment. Compensation for mental agony and harassment of Rs.2,000/- and litigation expenses of Rs.2,000/- more allowed in favour of complainant and against  OP.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order. Certified copies be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

January 09, 2019

                                                                (G.K. Dhir)

                                                                President

(Mrs. Natasha Chopra)

Member