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

Consumer Complaint No.587 of 2017

                                                Date of institution:  04.08.2017                                                  Date of decision   :  30.01.2019

Ritu Kapoor wife of Rohit Malik Kapoor, resident of House No.318, Sector 91, J.L.P.L. SAS Nagar, District Mohali 160062.

…….Complainant

Versus

Lifestyle International Pvt. Ltd. The North Country Mall, NH 21, Mohali-Kharar Road, SAS Nagar, Punjab – 140307 (Address No.1) through its Showroom Manager/Owner.

                                                                 ……..Opposite Party

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Mrs. Natasha Chopra, Member.

Present:     Shri Rohit Kumar, counsel for complainant.

Ms. Roza Agnihotri, Junior Advocate for Shri Saurabh Gulia, counsel for the OP.

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

Order

                  Shorn off unnecessary details, case of complainant is that she purchased 6 Coffee Mugs and Girls Floral Sandals from OP under promotional scheme, on which discount of 50% and 20% respectively was offered. Payment of Rs.419.95 N.P. and Rs.367.98 N.P. respectively was made for purchase of these items through bills dated 23.06.2017. MRP of Girls Floral Sandals was Rs. 499/- inclusive of all taxes and after discount of 20% thereon, payable price was Rs.399/-. However, amount of Rs.419.95 in all was charged. Likewise on the second product discount of 50% was offered and chargeable price was Rs.349.50 N.P., but Rs.367.98 N.P. in fact was charged. So, VAT @ 14.3% of amounts of Rs.19.95 and Rs.17.48 N.P. was charged extra on the discounted price of these products. This is alleged to be unfair trade practice and that is why this complaint filed for seeking refund of Rs.36.43 N.P. with interest @ 12%. Compensation for mental harassment and agony of Rs.40,000/- and litigation expenses of Rs.10,000/- more claimed.

2.             In reply filed by OP, it is pleaded inter alia as if complaint is false, frivolous and vexatious due to which same is not maintainable. Besides it is claimed that no cause of action has accrued to complainant for filing this complaint. Moreover, this Forum has no jurisdiction to entertain and decide the issue pertaining to taxes. OP clearly mentioned words “Taxes/VAT Extra”, in all of its advertisements and marketing material. Copies of in-store displays and advertisements on the discount offer were displayed at various places inside the Lifestyle Store. Even complainant was informed about the discount offer. OP as per standard policy has displayed declaration for charging VAT/Taxes on the selling price. VAT is a statutory liability on OP. Charged VAT amount has to be mandatorily deposited with the Govt. exchequer. Total cash collected from complainant is less than MRP value mentioned on the price tag and as such OP has not charged any amount in excess of MRP. VAT to be charged by seller from buyer and thereafter the same has to be deposited in the concerned Govt. department. It is also admitted that discount was offered on the purchased products. Complainant was explained about the scheme and she purchased the products without raising any protest. Other averments of the complaint denied. It is claimed that sale price is defined in the Sales Tax Act and Punjab VAT Act, 2005 as the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade. Sales price enters into computation of assessee’s turnover for the purpose of assessment under Sales Tax Act.  Other averments of the complaint denied.

3.             Complainant to prove her case tendered in evidence her affidavits Ex.CW-1/1 and Ex.CW-1/2 alongwith documents Ex.C-1 to Ex.C-5 and Mark-A and thereafter closed evidence.  No evidence led by OP.

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

5.             Before adverting to the discussion, it is essential to mention that unnecessary lengthy complaint running into 20 pages has been filed, despite the fact that proceedings under the Consumer Protection Act are summary in nature. So, virtually lengthy complaint has been filed not only for wasting time of this Forum, but even stationery. Such practice must be avoided because Consumer Protection Act brought into existence for delivering speedy justice in summary proceedings.

6.             Ex.C-1 and Ex.C-2 are produced on record to show that MRP of one of the product was Rs.699/- on which discount of 50% was allowed and chargeable price was Rs.349.50 N.P., but by adding Rs.17.48 N.P. as VAT on this discounted price, amount of Rs.367.98 N.P. charged. This in fact is borne from contents of Ex.C-1. However, after going through invoice Ex.C-2 alongwith tag Ex.C-3, it is made out that MRP of the Girls Floral Sandals was Rs.499/- (inclusive of all taxes), but after giving discount of 20%, payable price was Rs.399/-, but by adding VAT of Rs.19.95 N.P. on the discounted price, an amount of Rs.419.95 N.P. has been charged. So certainly this material produced on record establishes that VAT on the discounted price charged, despite the fact that MRP is inclusive of all taxes. Section 8-C (2) of Punjab VAT (second amendment) Act, 2013 provides that on notification by State Govt. on the value of maximum retail price (MRP), it is to be taken as if MRP would be inclusive of all taxes. In view of this clause also, it is obvious that VAT on the discounted price of a product having MRP could not have been charged extra. That has been done in this case and as such certainly violation of provisions of Section 8-C (2) of Punjab VAT (second amendment) Act, 2013 even committed by OP in this case. Practice of charging VAT 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 VAT on the discounted price of the product having MRP inclusive of all taxes in this case certainly is unfair trade practice.

6.             Even if VAT to be charged from the buyer, despite that the terms of such practice can be changed by mutually arrived at contract through which the buyer may undertake liability to pay VAT on the discounted price of a product having MRP inclusive of all taxes. It was OP itself who professed that MRP will be inclusive of all taxes and as such on the discounted price, OP by such undertaking bound to pay VAT or other taxes. Complainant on representation of OP of discount offer on product having MRP inclusive of all taxes, purchased the products in question from OP and as such now OP estopped by its act and conduct from claiming that VAT 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 VAT on the sold products, but despite that it is bound by its open offer of not charging VAT extra on the products having MRP inclusive of all taxes.

9.             As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.36.43 N.P. with interest @ 6% per annum w.e.f. 23.06.2017 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 30,2019.

                                                                (G.K. Dhir)

                                                                President

(Mrs. Natasha Chopra)

Member