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

                                      Consumer Complaint No.480 of 2016                                                   Date of institution: 11.08.2016                                                      Date of decision   :  09.03.2017

Gursharan Singh Kang son of Joginder Singh Kang, resident of H.No.49, Phase-IV, SAS Nagar (Mohali) Punjab 160059.

                                     ……..Complainant

                                        Versus

1.     M/s. Central (A Division of Future Lifestyle Fashions Limited),  North Country Mall, North Country Mall, National Highway  21, Mohali, Kharar Road, Mohali 160118 through its Branch Manager.

2.     M/s. Future Lifestyle Fashions Limited, Knowledge House, Shyam Nagar, off. Jogeshwari Vikhroli Link Road, Jogeshwari (East), Mumbai 400060 through its Managing Director/Chief Executive Officer/Authorised Signatory.

                                                               ………. Opposite Parties

Complaint under Sections 12 of

Consumer Protection Act, 1986.

Quorum

Shri Ajit Pal Singh Rajput, President                    

Ms. Natasha Chopra, Member

Present:     Complainant in person.

                Shri Ishant Negi, counsel for the OPs.

ORDER

By Ajit Pal Singh Rajput, President

                Complainant Gursharan Singh Kang has filed this complaint against the Opposite Parties (hereinafter referred to as the OPs) under Section 12 of the Consumer Protection Act. The brief facts of the complaint are as under:

2.             The complainant purchased 11 products i.e. 8 shirts, 2 trousers and 1 paper bag from the OP.  All the products were having different amount of discounts.  The Maximum Retail Price of all the products  after discount was Rs.10,372.14.  However, the OPs while issuing sale invoice dated 24.07.2016 charged Rs. 627.52 as VAT @ 6.05% on the discounted price. The complainant requested OP No.1 not to charge any tax including VAT since the MRP includes all taxes including VAT but OP No.1 did not pay any heed to the request of the complainant.   Having no choice, the complainant purchased these products from the OPs by paying VAT on the discounted price.  Hence this complaint for giving directions to the OPs to refund him extra amount of VAT charged to the tune of Rs.627.52/-; to pay him Rs.50,000/- for physical harassment and mental agony and litigation cost of Rs.15,000/- alongwith interest @ 18% per annum.

3.             The OPs filed joint written statement in which they have taken preliminary objections that the complainant has not placed on record a single document to show that the OPs had charged tax on tax from the complainant. The complainant has also failed to point out any rules/regulations/law/bye law which entitle him to get discount on the VAT.  On merits, it is pleaded that the MRP of the product is inclusive on all taxes including VAT and whenever the company comes out with any scheme viz. promotional sales or discount offering, then MRP of each product as offered for sale under the scheme stands reduced to the Final Sales Value (FSV). FSV means selling price to the customer shall be the transaction value plus the applicable sales tax (including VAT/CST) instead of MRP. Therefore, the sale pricing purposes, all products to be sold under the scheme during such promotional sales or discount offering, the FSV supersedes MRP. While levying VAT, CST on the transaction value, FSV to the customer does not exceed MRP to ensure protection of customers rights.  In the present case the OPs offered to sell the products by offering discount. The price so offered was sale price/discounted price which has been admitted by the complainant. While offering discount, the company reduces its profit margin. The OPs offered to sell the product at a price lower from MRP. The VAT so collected is deposited with the concerned authorities.  The OPs had clearly displayed in the store that VAT would be charged extra over the discounted sale price. Therefore, there was no unfair trade practice on their part.  Thus, denying any unfair trade practice and deficiency in service on their part,  the  OPs have sought dismissal of the complaint.

4.             In order to prove the case, the complainant tendered in evidence his affidavit Ex. CW-1/1; copies of invoice Ex.C-1; bill Ex.C-2 and price tags Ex.C-3 to 12.  In rebuttal, the OPs tendered in evidence affidavit Gagan Walia, their Admn. Manager Ex.OP-1/1 and pamphlet Ex.OP-1.

5.             The learned counsel for the complainant has argued that the tags Ex.C-3 to 12 show that the prices of the products were inclusive of all taxes. However, the OPs at the time of issuance of sale invoice Ex.C-1 again charged VAT @ 6.05% on the discounted price and this act on the part of the OPs amounts to unfair trade practice and deficiency in service.  

6.             On the other hand learned counsel for the Ops has argued that it MRP of the product is inclusive on all taxes including VAT and they have rightly charged VAT from the complainant and there is no unfair trade practice and deficiency in service on their part.

7.             After hearing the learned counsel for the parties and going through the pleadings, evidence and the written as well as oral submissions, it is established from the material placed on record i.e. tags Ex.C-3 to C-12 that the prices of the products were inclusive of all taxes. However, the OPs again charged VAT @ 6.05% while issuing invoice Ex.C-1.  In our view when MRP is inclusive of all taxes then VAT/other taxes cannot be charged separately. 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. A similar question arose for determination before the Hon’ble State Consumer Disputes Redressal Commission, UT Chandigarh in First Appeal No.210 of 2015 decided on 01.09.2015 in case titled as Shoppers Stop and others Vs. Jashan Preet Singh Gill and others.

8.             Accordingly, in view of our aforesaid discussion and the afore stated case law, we find that charging of VAT on the discounted price by the OPs is unfair trade practice and deficiency in service.   Hence we direct the OP to refund to the complainant Rs.627.52/- (Rs. Six hundred twenty seven and paise fifty two only) i.e. excess charges of VAT and to pay him a lump sum amount of Rs.10,000/- (Rs. Ten Thousand only) for mental agony, harassment and costs of litigation. The present complaint stands allowed accordingly.

                The OPs are further directed to comply with the order of this Forum within 45 days from the date of receipt of this order failing which the amount of compensation shall carry interest @ 9% per annum from the date of decision till actual payment.

                The arguments on the complaint were heard on 28.02.2017 and the order was reserved. Now the order be communicated to the parties. Copy of the order be sent to the parties free of cost and thereafter the file be consigned to the record room.

Pronounced

Dated: 09.03.2017

                                              (A.P.S.Rajput)                                                           President

(Mrs. Natasha Chopra)

Member