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

Consumer Complaint No.247 of 2017

                                                 Date of institution:  24.03.2017                                                      Date of decision   :  04.04.2018

Jagjit Kaur wife of Amrit Pal Singh, resident of House No.913, Phase-7, Mohali.

…….Complainant

Vs

1.     Lifestyle International Pvt. Ltd. through its Branch Manager,  North Country Mall, NH 21, Kharar, SAS Nagar, Punjab 140307.

2.     Lifestyle International Pvt. Ltd. through its Managing Director, Land Mark Group, 77 Town Centre, Building No.3, West Wing, Off HAL Airport Road, Yamlur, P.O. Bangalore 560 037.

                                                        ……..Opposite Parties.

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Mrs. Natasha Chopra, Member.

Present:     Shri Karamveer Singh, counsel for the complainant.

                Shri Saurabh Gulia, counsel for the OP.

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

Order

               MRP of shirt purchased by complainant was Rs.2,399/- and after giving discount of 30%, the same turned to be Rs.1,679.30 N.P. OP No.1 charged Rs.101.60 N.P. as VAT amount @ 6.05%. 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 VAT amount of Rs.101.60 N.P. and pay compensation of Rs.20,000/-, but litigation expenses of Rs.15,000/-.

2.             OP filed written statement by pleading inter alia as if the complaint is false and vexatious, filed with an attempt to malign the reputation of OP; complainant has no cause of action; this Forum has no jurisdiction to entertain and decide the issue pertaining to taxes; payment of VAT is statutory liability of OP because the collected amount has to be deposited with the Govt. exchequer. Besides, it is claimed that OP has clearly mentioned words “VAT extra” in all their advertisements and marketing material. Even advertisements regarding discount offer are displayed at various places inside the Lifestyle Store. So complainant was made aware of the discount offer. In view of this it is claimed that complainant has not approached this Forum with clean hands. Final sale value of the goods was below MRP. VAT was charged extra on the same price according to the statutory liability of OP under the tax regime. Total cash amount collected from complainant was less than the MRP. Percentage of discount communicated by OP was only for the purpose of calculating the value of discount on MRP displayed on the product. Admittedly bill/invoice of amount of Rs.1,780.90 N.P. was issued. OP offered discount of 30% on the shirts at the relevant time. In view of charging of VAT/tax, as per provisions of Central Sales Tax Act and Punjab VAT Act, 2005, no extra amount alleged to be charged. Other averments of the complaint denied and prayer for dismissal of the complaint made.

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

4.             Written arguments submitted by the complainant only. Oral arguments heard and records gone through.

5.             Undisputedly the product in question having MRP of Rs.2,399/- was purchased by complainant from OP No.1 on offer of discount @ 30%, by paying VAT @ 6.05% of amount of Rs.101.60 N.P. Copy of the invoice Ex.C-1 alongwith tag Ex.C-2 in this respect are produced on record. On the produced tag, MRP of the purchased product is mentioned as Rs.2,399/- (inclusive of all taxes). So the material produced by complainant itself establishes that MRP was inclusive of all taxes. Being so,  on the discounted price, extra VAT could not have been charged by OP because as per law laid down 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, if on the sold product mention made regarding MRP inclusive of all taxes, then extra tax (VAT/GST etc.)  cannot be charged on the discounted price and in case it is done, then the same will amount to unfair trade practice. So, virtually charging of VAT amount extra is an act of unfair trade practice, which had been deprecated by the Hon’ble National Commission in above cited case.

6.             Even if the charged VAT amount liable to be credited to the accounts of the Govt. after collecting the same from customers by OP, despite that the agreement of not charging extra VAT or taxes on MRP stands on independent footing than that of the liability of the OP to collect VAT. Complainant purchased the product in question from OP under an agreement after knowing that MRP of the purchased products is inclusive of all taxes and as such it was the duty of OP to pay VAT/taxes at its own without charging the same on the discounted price because on discounted price, VAT not chargeable extra, when MRP is inclusive of all taxes as held above by keeping in view the law laid down by Hon’ble National Commission. So the OP cannot shift its own liability on complainant, after giving open offer of MRP inclusive of all taxes.

7.             Counsel for OP vehemently contends that display was put forth on the counters as well as around the show room and on the website that VAT will be charged extra on the discounted price and terms and conditions will apply and as such in view of acceptance of that offer by complainant, now complainant cannot claim that VAT on the discounted price could not be charged.  Even if in the copy of alleged notice put up around the show room mention made “20% and 30% off and VAT extra”, despite that no material produced on record to show as to at which conspicuous place of the show room original of Ex.OP-1 was put. Until and unless place on which Ex.OP-1 displayed is shown to be conspicuous place, it cannot be held that contents of Ex.OP-1 were made known to each and every customer visiting the show room in question, from where the product in question purchased by complainant.  Date of display of Ex.OP-1 or place of display of same not specifically mentioned in the reply or in the affidavit Ex.OP-1/1 of Shri Baljit Talwar, authorised signatory/ representative of OP and as such it cannot at all be held that actually this Ex.OP-1 was displayed for providing due information to the customers. Being so, just on the strength of Ex.OP-1 it cannot be held that complainant was made aware of the terms and conditions of the discount offer. If complainant was not made aware of those terms and conditions, then how OP can charge extra VAT amount on the discounted price in violation of the law laid down by Hon’ble National Commission in case of M/s. Aero Club (Woodland) Vs. Rakesh Sharma (supra) qua that no plausible explanation at all is offered. So act of charging of VAT on the discounted price certainly is unfair trade practice in view of facts and circumstances of this case. Being so, complainant entitled for compensation for mental agony and harassment and also to litigation expenses, but of reasonable amount only.

8.             Counsel for OP has placed reliance on case titled as Kirandeep Kaur Vs. Life Style International Private Limited bearing Consumer Complaint No.397 of 2017 decided on 05.01.2018 by Ld. District Consumer Disputes Redressal Forum, Amritsar for arguing that OP entitled to charge VAT on the sale price in view of statutory requirements laid in provisions of Sales Tax Act. It is well settled that judgment of Forum exercising similar jurisdiction of the one exercisable by this Forum is not binding on it. Rather the law laid down by Hon’ble National Commission is binding on this Forum and as such in view of case of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra) act of charging extra VAT on the discounted price certainly is an unfair trade practice. Moreover it may be mentioned here that provisions of Sales Tax Act not applicable to the proceedings before this Forum because matters regarding collection of tax from traders by authorities of the State Govt. stand on independent footing than that of the consumer disputes to be decided by this Forum. Object of collecting sale tax under provisions of Sales Tax Act is of collecting revenue for the State. Object of Consumer Protection Act is to ensure the welfare of consumers. Consumer Protection Act is a beneficiary legislation, but the Sales Tax Act legislated for collection of revenue on sales by traders. So in view of this also, reliance on the orders dated 05.01.2018 passed in CC No.397 of 2017 by Ld. DCF, Amritsar cannot be placed for deciding this complaint

9.             As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.101.60 N.P. with interest @ 6% per annum w.e.f. 06.01.2017 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

April 04, 2018.

                                                                (G.K. Dhir)

                                                                President

(Mrs. Natasha Chopra)

Member