DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)
Consumer Complaint No.123 of 2017
Date of institution: 14.02.2017 Date of decision : 04.04.2018
Sarbjeet Singh son of Shri Naurata Singh, resident of House No.2462B, Sector 39-C, Chandigarh.
…….Complainant
Vs
Lifestyle International Pvt. Ltd., The North Country Mall, NH 21, Mohali Kharar Road, SAS Nagar (Mohali) through its Proprietor/Incharge/Manager.
……..Opposite Party
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 two ladies jeans purchased by complainant was Rs.1,899/- (inclusive of taxes) each and after giving discount of 15%, the same turned to be Rs.3,228.30 N.P. OP charged Rs.195.32 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.195.32 N.P. and pay compensation for mental harassment and agony of Rs.50,000/-, but litigation expenses of Rs.35,000/-.
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.3,425.62 N.P. was issued and MRP per jean was Rs.1,899/-. OP offered discount of 15% on ladies jeans 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 his case tendered in evidence his affidavit Ex.CW-1/1 alongwith document Ex.C-1 and thereafter his 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 products in question having MRP of Rs.1,899/- each were purchased by complainant from OP on offer of discount @ 15%, by paying VAT @ 6.05% of amount of Rs.195.32 N.P. Copy of the invoice Ex.C-1 in this respect is produced on record. It is specifically pleaded in Para No.3 of the complaint that MRP of Rs.1,899/- of each product was inclusive of taxes, but no specific denial of the same made in the reply and as such complainant able to establish as if the 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. Discount in this case is of 15% as per admitted case of the parties, but advertisement material, copies of which produced on record by OP shows as if the said pertains to discount offer of 20% or 30%. So virtually the advertisement material produced as Ex.OP-1 on record do not pertain to transaction of sale of products in question by OP to complainant at discount of 15%.
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 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.195.32 N.P. with interest @ 6% per annum w.e.f. 04.02.2017 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
