DISTRICT   CONSUMER   DISPUTES   REDRESSAL  FORUM,  PATIALA.

                                                Consumer Complaint No.11 of  08/01/2018  

                                                               Decided on:   19/06/2019       

Paramjit Singh Walia s/o Sh. Raghbir Singh, # 19 A-1, Ranbir Marg, Model Town. Patiala.                                                                                                                  

Complainant

                                                Versus

Ram  Chander  &  Sons, (Color Plus ),  SCO-2,  Rani Indra   Kumari Market, 

Bhupendra  Road, 22 No. Phatak, Patiala, through its Prop./Sales Manager.

                                                                                                              Opposite Party

                                                Complaint under Section 12 of the

                                                Consumer Protection Act, 1986.

QUORUM

                                                Smt. Inderjeet Kaur, Member

                                                Sh. B. S. Dhaliwal, Member                                            

ARGUED BY:

                                    Sh. Paramjit Singh Walia Adv.: Complainant.             

                                    Opposite party :   Ex-parte.

 ORDER

                                   B. S. DHALIWAL, MEMBER

1.                    The Complainant Paramjit Singh Walia (here-in-after referred to as complainant) has filed  the complaint U/S 12 of the Consumer Protection Act 1986 ( here-in-after referred as Act) against Ram Chander and Sons (here-in-after referred as Opposite party).

2.                    Briefly stated the case of the complainant is that the goods  manufactured under the International Brand name of “Color Plus” are being sold in the open market by OP being Retail Brand Store. The OP in order to promote the sale of the products manufactured under the brand name of Color plus offered 50% discount on MRP on 17/07/2017. Complainant purchased two T-Shirts from OP vide Bill No.CD9S 17/307. The MRP of T-Shirts was Rs.2099/- and Rs.1899/- (Inclusive of all taxes) respectively.  The seller can not charge any tax what so ever over and above the MRP. The OP issued bill of the said items dt.17/07/2017 for Rs.2172/-. The payment was made through credit card.

3.                    It is further alleged that it came to the notice of the complainant that OP has charged extra GST on the item purchased by the complainant  despite the fact that MRP included all the taxes including GST. The Gross bill amount of the said item, after 50 % discount comes to Rs.1999/- while OP has charged Rs.173/- as GST extra illegally on the sale price after discount i.e. total Rs.2172/- including GST. It is made clear GST has replaced VAT which used to be charged earlier on the discounted amount illegally. The OP has charged tax on tax which is not only illegal but it amounts to an unfair trade practice and OP has thus indulged into an unfair trade practice coupled with deficiency in service.

4.                    It is also alleged that the complainant brought the matter in dispute to the notice of Sale Manager but he told that GST is extra as per T & C and more over GST is being charged as per directions and instructions given by the manufacturer.

5.                    By this complaint, the complainant has prayed that OP be directed to pay compensatory costs for mental agony and harassment and litigation expenses as well as damages to the tune of Rs.50,000/- and the complaint be allowed.

6.                    Upon notice the Opposite party appeared and contested the complaint by filing written reply.

 7.                   In the reply it is contended in the  preliminary objections that as per the discount policy, opposite party has explicitly mentioned the fact that GST would be charged over and above the discounted price. The said fact is also communicated to all the customer before the purchase  is made by them and is also mentioned on all the hoardings/ promotions material used to communicate discount scheme to the customers. The GST charged by the opposite party is well within the preview of law and no illegality has been committed by the  opposite party as alleged by the complainant. GST was charged on selling price, after due intimation to the customer, hence it does not amount to unfair trade practice or deficiency in service. There is no restriction on the computation of tax on net discount value. In nutshell it is contended that as per GST rules and regulations a company can charge GST over and above MRP i.e. if the company offer any discount, it is at liberty to charge GST over such amount/ derived upon discount. It is also contended that it was made clear to all the customers through various mode of communications that GST will be chargeable on  discounted value of goods and as such opposite party has not violated any law, thereby, neither there was any unfair trade practice nor there is any deficiency in service on the part of the OP.

8.                    On merits it is admitted that the complainant has purchased  two T-Shirts on 17/07/2017 for discounted price of Rs.1999/- and they have charged Rs.173/- as GST i.e. total Rs.2172/-. Further the OP has reiterated the facts already narrated in the preliminary objections and prayed for dismissal of the complaint.

9.                    Parties were afforded opportunity to  produce their evidence.

10.                  In support of his case, complainant tendered in to evidence his affidavit Ex.CA and documents Original Invoice Ex.C-1, Original Tags Ex.C-2 & Ex.C-3 and closed his evidence.

11.                  In order to rebut this evidence, Opposite party tendered into evidence the affidavit of Anuj Sundra, authorized representative of opposite party as  Ex.OPA and closed the evidence.

12.                  During the pendency of the proceedings of the complaint, the counsel for the OP abstained as such the OP was ordered to be proceeded ex-parte.

13.                  We have heard the complainant and have gone through the record of the case carefully.

14.                  Ld. Counsel reiterated the contentions as has already been taken in complaint to support his case. To support his contentions, complainant has relied upon the judgement of Hon’ble State Consumer Disputes Redressal Commission, Punjab in “First Appeal No.759 of 2017 titled as Lifestyle International Pvt. Ltd. Versus Aasthaa Negi decided on 15/06/2018 and First appeal No.27 of 2018 titled as Paramjit Singh Walia Versus Levi’s Retail Square decided on 12/09/2018”. It may be stated that as per section 2(d) of the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act, 2014, no extra amount over and above the M.R.P., printed on the goods could be charged, even the same has been sold on discount, as M.R.P. has already been included  all taxes levied on the goods. State Consumer Disputes Redressal Commission, Bangalore in “The Branch Manager M/s Shirt Palace Branch Black Bird Showroom Vs. Chandru H.C.” Appeal no.3723 of 2011, decided on 16.01.2014 held that charging of VAT on the discounted price is unfair trade practice. Similar view has been adopted by State Consumer Disputes Redressal Commission, U.T. Chandigarh in First Appeal No.210 of 2015, decided on 01.09.2015, titled as “Shoppers Stop and others Vs. Jashan Preet Singh Gill and others” wherein it was held that OP cannot charge VAT on the discounted price. The matter has also been settled by the Hon’ble National Commission in case titled as “Aero Club Vs. Ravinder Singh Dhanju” 2018 Law Suit(CO)22 wherein it was held that advertisement in the above form is nothing, but an allurement to gullible consumers to buy the advertise merchandise at a cheaper bargain price, which itself was not intended to be the real bargaining price. Therefore, it tantamounts to unfair trade practice. The National Commission has held that charging of VAT extra after reducing the MRP of product by the percentage of discount is unfair trade practice. This Commission has also held a similar view in First Appeal No.759 of 2017 decided on 15.06.2018 titled as “Lifestyle International Pvt. Ltd vs. Aasthaaa Negi”.

15.                  It is admitted fact that the complainant has purchased  two  T-shirts. The perusal  of  tag Ex.C-2 reveals that the MRP of one T-shirt is Rs.2099/- (inclusive  of all taxes) and similarly tag Ex.C-3 states that the MRP of another T-Shirt is Rs.1899/- (inclusive of all taxes). From the Invoice Ex.C-1 it is established that after 50% discount of the said  items/ goods the payable amount of T-Shirts comes to Rs.1999/- but the OP after having added Rs.173/- on account of CGST and SGST raised the bill for an amount of Rs.2172/- which was paid by the complainant to the opposite party.

16.                  Since the OP has charged VAT on the discounted price of the product, from the complainant, in violation of Section 2(d) of the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act, 2014, therefore, it   has not only committed deficiency in service but also indulged in to unfair trade practice. The OP is thus liable to refund the amount charged on account of VAT and also liable to compensate the complainant for causing  mental agony and physical harassment. It is also liable to pay litigation expenses.

17.                  For the foregoing discussions, net conclusion is that the opposite party has charged CGST & SGST over the discounted amount and failure on the part of the OP to redress the genuine grievances of the complainant  resulted into filing the present complaint.

18.                  Thus allowing the complaint we direct the opposite party as under:

i.          To refund Rs.173/- charged on account of CGST & SGST along with interest @ 9% per annum from the date of purchase till payment  to the  complainant.

ii          To pay Rs.5000/-as compensation for causing mental agony and

physical harassment including cost of litigation. .

19.                  The Opposite party is directed to comply with this order within a period of 45 days from its receipt.

20.                  The case could not be decided within the statutory period due to heavy pendency of cases.

21.                  Certified copy of this order be sent to the parties free of costs under the rules. Thereafter file be indexed and consigned to the Record Room.         

ANNOUNCED

DATED:  19/06/2019   

B. S. DHALIWAL                 INDERJEET KAUR

 MEMBER                                      MEMBER