Chandigarh

DF-I

CC/622/2016

Priya Mehta - Complainant(s)

Versus

M/s A to Z Fashion Pvt Ltd (Woodland) - Opp.Party(s)

Harpreet Saini

02 Nov 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

============

Consumer Complaint  No	:	CC/622/2016
Date  of  Institution	:	08/08/2016
Date   of   Decision	:	02/11/2016

 

 

 

 

 

Priya Mehta D/o Sh. Surinder Mehta, R/o H.No.1147/A, Sector 37-B, Chandigarh.

……… Complainant.

 

Versus

 

M/s A to Z Fashion Pvt. Limited [Woodland], SCO 80-81, Sector 17-D, Opposite Fountain, Chandigarh, through its Manager or Authorized Representative.

 

……. Opposite Party

 

 

BEFORE:   SMT.SURJEET KAUR             PRESIDING MEMBER

          SH. SURESH KUMAR SARDANA     MEMBER

 

 

For Complainant	:	Sh. Harpreet Saini, Advocate.
For Opposite Party	:	Sh. Praveen Kumar, Authorized Representative.

 

PER SURJEET KAUR, PRESIDING MEMBER

 

 

          Put in brief, the facts of the case are that on 20.07.2016, the complainant visited the outlet of the Opposite Party. In order to promote the sale of their products, the Opposite Party had offered flat 50% discount on MRP. The complainant purchased two merchandise (one pair of ladies Shoes and one Men Shirt) from the Opposite Party which was having MRP of Rs.3495/- and Rs.1995/- respectively. The Opposite Party demanded an amount of Rs.3022/- which included Rs.268/- as VAT @ 12.5% and 5% respectively, besides Rs.10/- towards donation to the UNICEF. The complainant raised objection relating to charging of donation to UNICEF and extra VAT as the cost of the merchandise was inclusive of all taxes and VAT had already been added to the said cost, but, the officials/employees of the Opposite Party did not agree. The complainant has alleged that the Opposite Party has adopted unfair trade practice by charging extra VAT from her. Hence, alleging the aforesaid act & conduct of the Opposite Party as deficiency in service and unfair trade practice, the Complainant has filed the present Complaint.

             

2.      Notice of the complaint was sent to Opposite Party seeking its version of the case.

 

3.      Opposite Party resisted the complaint by filing its written reply, inter alia, taking the preliminary objections that the complaint cannot be entertained as the complainant failed to understand the discount duly displayed at the showroom in relation to the charging of the appropriate VAT as extra which was the output liability of the Opposite Party on account of the sale of the goods at the discount rates and the same stands deposited with Govt.; that the complaint has been filed with a motive to extract money out of the Opposite Party. Discount on MRP is only a methodology of calculation of price on which VAT as applicable will be charged at the time of sale. On merits, it is admitted that the Opposite Party offered discount of 50% of the price, but, the same was subject to payment of VAT on such sales and complainant was notified and displayed the cost of the merchandise he purchased. It is pleaded that donation was purely voluntary and the Opposite Party never forced the Complainant for any such payment.  Hence, the Opposite Party prayed for dismissal of the complaint.

 

4.      Parties were permitted to place their respective evidence on record in support of their contentions.

 

5.      We have heard the learned counsel for the Complainant and Sh. Praveen Kumar, Authorized Representative of Opposite Party and have also perused the record.

 

6.      The case of the Complainant is that she was charged 12.5% and 5% extra VAT of Rs.268/- by the Opposite Party for the two merchandise purchased by her with MRP of Rs.3495/- and Rs.1995/- respectively (which was inclusive of all taxes) after giving a discount of 50% under a promotional offer. The Complainant has also alleged that the Opposite Party also included donation of Rs.10/- to the UNICEF without her consent.

 

7.      In this backdrop, the core question which falls for determination is whether the MRP includes all taxes including VAT and whether after discount VAT can be charged or not? Whether the Opposite Party can charge donations to UNICEF arbitrarily?

 

8.      The Opposite Party in its defence argued that it charged VAT as per the rules, regulations and provisions of Punjab Value Added Tax 2005. A bare perusal of the provisions of the Act referred, nowhere permits the imposition of tax on the goods which have already been tagged as ‘inclusive of all taxes’. In our opinion the MRP of any product tagged as ‘inclusive of all taxes’ establish that no more tax is required to be levied. The Opposite Party has also not referred to any particular provision which is applicable herein, in order to justify its stand. At any rate, the Opposite Party has miserably failed to produce on record any cogent, convincing and reliable piece of evidence in the shape of any rules/ instructions authorizing it to levy/ charge the amount of VAT in question on the MRP, which is mentioned as “inclusive of all taxes” from the gullible consumers.     

 

9.      The Opposite Party further argued that it has not charged anything above MRP of the product in question and thus can impose VAT. This stand of the Opposite Party is bereft of any force as the discount so offered is part and parcel of its promotional policy showing hefty discounts in order to attract/ allure the gullible customers; who approach it under the misleading belief of getting hefty discounts declared by it which comes out to be an illusion when they are forced to pay a good amount of VAT illegally imposed.  We are of the opinion that the discount so offered by the Opposite Party is offered from its own margins as per its own choice and are not pressurized to do so and once the price of the product is mentioned as ‘inclusive of all taxes’ then none can add even a single penny on account of any tax. It can only be done in regards to the goods/ products where its price does not include all taxes. 

 

10.      In our opinion, there is a difference between the remarks “Retail Price” and “Actual Price” of the goods. The MRP is inclusive of all taxes and a retailer can sell at a price below the MRP (Maximum Retail Price) because MRP is the maximum retail price allowed for that commodity and not the actual price. A retailer can well reduce his margin built into MRP, while on the other hand, the actual price can be much lower than the MRP.

 

11.      After giving our thoughtful consideration, we are of the considered opinion that no one can charge more than the MRP and MRP includes all taxes including VAT/other taxes. When MRP is including all taxes then VAT/other taxes cannot be charged separately. Meaning thereby that MRP includes VAT and after discount no VAT can be charged, so on discounted product also VAT cannot be charged if VAT is included in MRP. 

 

12.      At any rate, if the Opposite Party had offered discount of 50% on the article purchased by the Complainant/Customer, then it (OP) is bound to sell the article after discount. Though Opposite Party had offered 50% discount on the article in question, still it charged extra VAT @12.5% and 5% respectively on discounted price. Once MRP is inclusive of all taxes, charging of extra VAT or tax, to our mind, is against the trade practice. Here we are fortified by the similar view taken by the Hon’ble State Consumer Disputes Redressal Commission, Bangalore, in Appeal No. 3723 of 2011, titled as “The Branch Manager, M/s Shirt Palace Branch, Black Bird Showroom Vs. Chandru H.C.”, decided on 16.01.2014.

 

13.      A similar question arose for determination before the Hon’ble State Consumer Disputes Redressal Commission, U.T. Chandigarh in First Appeal No.210 of 2015, decided on 01.09.2015 in case titled as “Shoppers Stop and others Versus Jashan Preet Singh Gill and Others”, wherein it has been held that no one can charge more than the MRP and MRP includes all taxes including VAT/other taxes. When MRP is including all taxes then VAT/other taxes cannot be charged separately. In a recent decision in Appeal No.61 of 2016, decided on 18.02.2016, in case titled as “Benetton India Private Limited Vs. Ravinderjit Singh”, the Hon’ble State Consumer Disputes Redressal Commission, U.T. Chandigarh, while dismissing the appeal filed by the Appellant (Benetton India Pvt. Limited) has held that if it is clearly mentioned as MRP inclusive of all taxes, charging of extra VAT or tax, is certainly against the trade practice. The ratio of the aforecited judicial pronouncements are squarely applicable to the present lis. Therefore, the act of the Opposite Party in charging VAT on discounted product, clearly proves deficiency in service on its part, which certainly caused immense mental and physical harassment to the Complainant.

 

14.      The amount of Rs.10/- received by the Opposite Party from the Complainant is by way of UNICEF donation, which is purely for charitable purpose, and hence is a donation, which is not covered under the ambit of Consumer Protection Act, 1986. Moreover, the Complainant has not raised any objection to this amount at the time of taking the invoice from the Opposite Party, which means that it carries her consent. Therefore, the prayer made by the Complainant with regard to refund of Rs.10/- is rejected.

 

15.      For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Party, and the same is partly allowed. The Opposite Party is directed:-

 

[a]  To refund excess charged VAT of Rs.268/- to the Complainant.

 

[b]  Pay Rs.2,000/- as compensation on account of deficiency in service and causing mental and physical harassment to the Complainant; 

 

[c] Pay Rs.1,000/- towards costs of litigation;

 

16.      The above said order shall be complied within 30 days of its receipt by the Opposite Party; thereafter, Opposite Party shall be liable for an interest @12% per annum on the amounts mentioned in sub-paras [a] & [b] above from the date of institution of this Complaint, till it is paid, apart from costs of litigation mentioned in sub-para [c] above. 

 

17.      Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

02^nd November,2016                                            Sd/-

(SURJEET KAUR)

       PRESIDING MEMBER

 

Sd/-

(SURESH KUMAR SARDANA)                                                                                                      MEMBER

“Dutt”