Chandigarh

DF-I

CC/819/2016

Satbinder Singh - Complainant(s)

Versus

M/s College Shoes - Opp.Party(s)

Sukaam Gupta

27 Dec 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

 

 

                                       

Consumer Complaint No.	:	CC/819/2016
Date of Institution	:	16/09/2016
Date of Decision	:	27/12/2016

 

Satbinder Singh s/o Sh. Harmohinder Singh r/o #66, Sector 21-A, Chandigarh.

…..Complainant

V E R S U S

1.     M/s College Shoes, S.C.O. No.30, Sector 17, Chandigarh through its Manager.

2.     Woodland India, 2168, Gurudwara Road, Opp. Post Office, New Delhi – 110005, India through its Manager.

……Opposite Parties

QUORUM:	MRS.SURJEET KAUR	PRESIDING MEMBER
	SURESH KUMAR SARDANA	MEMBER

 

                                                                       

ARGUED BY	:	Sh. Sukaam Gupta, Counsel for complainant
	:	Sh. Praveen Kumar, authorised representative of OPs

                       

Per Surjeet Kaur, Presiding Member.

1.          The facts, in brief, are that on 24.6.2016, the complainant went to the store/outlet of OP-1 to purchase goods and the OP, in order to promote sale, was offering various discounts which was 40% on the MRP on 5.3.2016.  The complainant purchased two pair of shoes one for himself and another for his wife for Rs.2,295/- and Rs.3,995/- which was inclusive of all taxes.  The OP issued invoice dated 24.6.2016 for Rs.4,246/- in which it charged extra VAT of Rs.471.76.  The complainant requested the OP to waive off the said amount, but, to no avail.  Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint.
2.         The OPs in their joint written reply admitted that the complainant purchased the goods and that they allowed discount as per the conditions of sale displayed in the showroom as well as the advertisements given for the public. It has also been admitted that the OP made MRP as the basis for calculation of discounted price and charged VAT thereupon. The tax collected as described on the cash memo was deposited with VAT authorities. It has been averred that the complainant misunderstood the display board and advertisement which clearly made public know that 40% to 60% discount was only for allowing the reduction but it was subject to payment of VAT.  It has been denied that the company had charged tax twice. Pleading that there is no deficiency in service or unfair trade practice on their part, OPs prayed for dismissal of the complaint.
3.         The parties led evidence in support of their contentions. 
4.         We have gone through the record, including the written arguments of the OPs, and heard the arguments addressed by the learned Counsel for the complainant and the authorised representative of the OPs.
5.         The case of the Complainant is that he was charged extra VAT of Rs.471.76 by the Opposite Parties for the two products purchased by him having total MRP of Rs.4,246/- (which was inclusive of all taxes) after giving a discount of 40% under a promotional offer.
6.         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?
7.         The Opposite Parties in their defence argued that the VAT was charged 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. Importantly, the Opposite Parties have also not referred to any particular provision which is applicable herein, in order to justify their stand. At any rate, the Opposite Parties have miserably failed to produce on record any cogent, convincing and reliable piece of evidence in the shape of any rules/instructions authorizing them to levy/charge the amount of VAT in question on the MRP, which is mentioned as “inclusive of all taxes” from the gullible consumers.
8.         The Opposite Parties further argued that they have not charged anything above MRP of the product in question and thus can impose VAT. This stand of the Opposite Parties is bereft of any force as the discount so offered is part and parcel of their promotional policy showing hefty discounts in order to attract/ allure the gullible customers; who approach them under the misleading belief of getting hefty discounts declared by them 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 Parties, is offered from their own margins, as per their 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. 
9.         In our opinion, there is a substantial 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.
10.         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. 
11.         At any rate, if the Opposite Parties had offered discount of 40% on the products purchased by the Complainant/Customer, then they are bound to sell the articles/products after discount. Though Opposite Parties had offered 40% discount on the articles in question, still they charged extra VAT of Rs.471.76 @12.5% 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.
12.         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 Parties in charging VAT on discounted product, clearly proves deficiency in service on their part, which certainly caused immense mental and physical harassment to the Complainant. 
13.         For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Parties, and the same is accordingly partly allowed. The Opposite Parties are, jointly and severally, directed:-

[a]    To refund excess charged VAT of Rs.471.76 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;

14.         The above said order shall be complied within 30 days of its receipt by the Opposite Parties; thereafter, they 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. 
15.         The certified copies of this order be sent to the parties free of charge. The file be consigned.

 

	Sd/-	Sd/-
27/12/2016	[Suresh Kumar Sardana]	[Surjeet Kaur]
hg	Member	Presiding Member