Chandigarh

DF-I

CC/179/2016

Navdeep Singh Nayyar - Complainant(s)

Versus

Ram Lal & Sons - Opp.Party(s)

In person

24 Aug 2016

ORDER

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

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

Consumer Complaint  No	:	CC/179/2016
Date  of  Institution	:	15/03/2016
Date   of   Decision	:	24/08/2016

 

 

 

 

 

Navdeep Singh Nayyar S/o Paramjit Singh, R/o H.No.601/5, Manvata Nagar, Hoshiarpur.

…............. Complainant.

Vs

 

[1]  Ram Lal & Sons, Louis Philippe, SCO 45, Sec.17-E, Chandigarh, through its Prop.

 

[2]  Aditya Birla Nuvo Ltd., Indian Rayon Compound, Veraval, Gujarat – 362266, through its Managing Director.

 

…........... Opposite Parties

 

BEFORE:   DR. MANJIT SINGH             PRESIDENT

          SMT.SURJEET KAUR             MEMBER

          SH. SURESH KUMAR SARDANA     MEMBER

 

Argued by: Complainant in person.

                   Sh. J.S. Thind, Counsel for Opposite Parties.

 

PER SURJEET KAUR, MEMBER

 

          Succinctly put, the Complainant had purchased one Louis Philippe Shirt from the Opposite Party No.1, under a promotional offer of 20% off. It has been averred that the MRP of the aforesaid Shirt was Rs.2799/- which was inclusive of all taxes. It has been alleged that after giving 20% discount, the Opposite Party No.1 had charged Rs.2239.20P from the Complainant and had also charged Rs.111.96P as 5% VAT (totaling Rs.2351/-) which was already inclusive of all taxes (Invoice at Pg.7 of the paper book). The Complainant accordingly raised the issue with the Opposite Party No.1, but to no avail. Hence, alleging the aforesaid act & conduct of the Opposite Parties as deficiency in service and unfair trade practice, the Complainant has filed the present Complaint.

 

2.      Notice of the complaint was sent to Opposite Parties seeking their version of the case.

 

3.      Opposite Parties in their joint reply, while admitting the factual aspects of the case, have pleaded that all the taxes including VAT on the product are charged by the Government. No money from these taxes goes to the Opposite Parties. Also the Opposite Parties are not beneficiary in any way for the VAT charges. Secondly, discount on the product is the policy of the Company (OP No.2) but the charges of taxes are not covered under the Policy of the company; whereas, the same relates to Government. Pleading that there is no deficiency in service or unfair trade practice on their part, Opposite Parties have prayed for dismissal of the complaint.

 

4.      The Complainant also filed rejoinder wherein the averments as contained in the complaint have been reiterated and those as alleged in the written statement by the Opposite Parties have been controverted.

 

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

 

6.      We have heard the Complainant in person and learned counsel for the Opposite Parties and have also perused the record.

 

7.      The case of the Complainant is that he was charged 5% extra VAT of Rs.111.96P by the Opposite Parties for the Shirt purchased by him with MRP of Rs.2799/- (which was inclusive of all taxes) after giving a discount of 20% under a promotional offer.

 

8.      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?

 

9.      The Opposite Parties in their defence argued that they 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 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.  

 

10.      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 ones 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. 

 

11.      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.
12.      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.  

 

13.      At any rate, if the Opposite Parties had offered discount of 20% on the article purchased by the Complainant/Customer, then they (OPs) are bound to sell the article after discount. Though Opposite Parties had offered 20% discount on the article in question, still they charged extra VAT @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.

 

14.      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. 

 

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

 

[a]  To refund excess charged VAT of Rs.111.96/- to the Complainant  

 

[b]  Pay Rs.3,000/- as compensation on account of deficiency in service and causing mental and physical harassment to the Complainant; 

 

[c] Pay Rs.2,500/- towards costs of litigation;

 

16.      The above said order shall be complied within 30 days of its receipt by the Opposite Parties; thereafter, Opposite Parties 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 of Rs.2,500/-. 

 

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

Announced

24^th August,2016                                           

 

 

(DR.MANJIT SINGH)

PRESIDENT

 

 

(SURJEET KAUR)

   MEMBER

 

 

(SURESH KUMAR SARDANA)                                                                                                      MEMBER