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

Consumer Complaint No.838 of 2017

                                                  Date of institution:  06.10.2017                                                  Date of decision   :  04.10.2018

Rohit Malik son of Shri Shadi Lal Kapoor, resident of House No.318, Sector 91, J.L.P.L. SAS Nagar, District Mohali 160062 Punjab.

…….Complainant

Versus

Lifestyle International Pvt. Ltd., The North Country Mall,  NH 21, Mohali- 140307 Kharar Road,  SAS Nagar, Punjab (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,

                Shri Amrinder Singh Sidhu, Member.

                Mrs. Natasha Chopra, Member.

Present:     Complainant in person.

                Shri Saurabh Gulia, counsel for the OP.

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

Order

               Complainant purchased 4 pieces of men’s readymade garments i.e. two trousers and two shirts, all of international men’s readymade garments brand namely Louis Philippe from OP under promotional scheme because 40% flat discount was offered at the end of season’s sale. Payment of Rs.4975.48 N.P. was made through debit card by complainant to OP. Invoice in that respect was issued. Following table will show the amount of MRP, offer of discount, recovered sale price and the amount of tax collected:

                Total tax value was Rs.532.98 N.P. MRP mentioned above is inclusive of all taxes and same fact is reflected on the tags. Total MRP of the products was Rs.7896/- and the discounted price was Rs.4975.48 N.P., but tax of Rs.236.88 N.P. charged on the discounted price in illegal way and by adopting unfair trade practice and that is why this complaint filed for seeking refund of the extra paid amount of Rs.236.88 N.P. with interest @ 12%. Compensation for mental agony and harassment 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 being filed to malign the reputation of OP for unjust enrichment of complainant, but without any cause of action accruing in favour of complainant. Complainant has not mentioned about charging of GST in the entire complaint. Only portion of applicable tax on the discounted price @ 5% has been charged, but balance GST amount of 7% paid by OP from its pocket. Dispute in question pertains to taxation matter and as such this Forum has no jurisdiction. Amount charged is less than MRP mentioned on the price tags and as such OP has not adopted any unfair trade practice at all. Total chargeable GST is @ 12%, but 5% of that amount of Rs.236.88 N.P. alone charged from complainant. Admittedly after 40% of discount offer, charged price was Rs.4975.48 N.P. OP has widely advertised and displayed on the Lifestyle Store regarding charging of “Tax Extra” on the discounted price. Moreover, as per provisions of Central Sales Tax and Punjab VAT Act 2005, sale price 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. Other averments of the complaint denied.

3.             Complainant to prove his case tendered in evidence his affidavits Ex.CW-1/1 and Ex.CW-1/2 alongwith documents Ex.C-1 to Ex.C-8, newspaper cuttings Mark-A and Mark-B 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 documents Ex.OP-1 and Ex.OP-2 and thereafter closed evidence. 

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

5.             After going through complaint, reply and submitted affidavits, it is made out that OP himself has admitted about charging of Rs.236.88 N.P. from complainant as tax (GST), out of the total chargeable GST amount of Rs.532.98 N.P.  Even if OP charged part of GST amount from complainant, despite that one thing remains clear from the pleadings of the parties as well as contents of invoice Ex.C-1 that atleast Rs.236.88 N.P. collected from complainant as GST on the discounted price. Admittedly discount of 40% was offered on the products purchased by complainant. So Rs.236.88 N.P. has been charged from complainant as part of GST by OP on the discounted price of the products having MRP inclusive of all taxes. Price tags Ex.C-2 to Ex.C-5 are produced for establishing that mentioned MRPs of Rs.1,799/-; Rs.2,049/-; Rs.2,049/- and Rs.1,999/- are inclusive of all taxes. Payment of Rs.4975.48 N.P. made by complainant to OP through debit card is a fact borne from transaction slip Ex.C-7.   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 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 products 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. Reliance on Ex.OP-1 and Ex.OP-2 is placed to show that on the discounted price, tax to be charged extra as per display given by OP in its advertisement. 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 (supra)   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 and Ex.OP-2 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 products 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, the complaint is allowed with direction to OP to refund excess charged amount of Rs.236.88 N.P. with interest @ 6% per annum w.e.f. 19.07.2017 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

October 04, 2018.

                                                                (G.K. Dhir)

                                                                President

(Amrinder Singh Sidhu)

Member

(Mrs. Natasha Chopra)

Member