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

Consumer Complaint No.456 of 2017

                                             Date of institution:  03.07.2017                                         Date of decision   :  02.02.2018

Mandeep Singh Saini son of Late Sh. Manmohan Singh Saini, resident of House No.1736, Sector 34-D, Chandigarh.

…….Complainant

Vs

Reebok, Adisports India Pvt. Ltd., GF 001, FF-40,41,42,43,44, Cosmo Plaza, NH-22, Mohali, Zirakpur through its Proprietor/Manager/Authorised signatory.

……..Opposite Party

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:   Shri G.K. Dhir, President,

                Shri Amrinder Singh Sidhu, Member

                Mrs. Natasha Chopra, Member.

Present:    Ms. Vandana, counsel for the complainant.

                Shri Manoj Lakhotia, counsel for the OP.

Order by :-  Shri G.K. Dhir, President.

Order

               Complainant purchased Reebok Sports Pant by paying Rs.827/- to the OP. 40% discount was offered on MRP of the product of Rs.1,299/- and after discount the price payable was Rs.779.40 N.P. However, OP charged extra amount of Rs.47.15 N.P. by including 6.05% as tax on the discounted price. That practice of charging tax on discounted price is against rules and regulations and decision of Hon’ble National Commission and Hon’ble State Commission and as such by pleading deficiency in service on the part of the OP, prayer made for directing it to refund extra charged tax amount of Rs.47.15 N.P. and compensation for physical and mental harassment of Rs.50,000/-, but litigation expenses of Rs.20,000/- more claimed.

2.             In reply, it is claimed that jurisdiction of this Forum erroneously invoked and complaint being based on vague and baseless assumptions merit dismissal. Complaint also alleged to be not disclosing any cause of action. Issue of charging VAT on discounted price is already sub judice before Hon’ble Supreme Court of India in Special Leave Petition 8868 of 2017 titled as M/s. Aero Club (Woodland) Vs. Rakesh Sharma. Special Leave Petition in that respect has been admitted by Hon’ble Supreme Court vide order dated 31.03.2017 and as such prayer made for adjourning the proceedings of this complaint sine die. Admittedly, OP is carrying on business of sale, distribution and marketing of Reebok brand sports and lifestyle goods for which it has acquired reputation.  Complainant alleged to have approached this Forum with unclean hands by suppressing material facts. Complainant failed to disclose the facts regarding invitation of offer of discount alongwith terms and conditions, on which the discount offered can be availed. No unfair trade practice adopted by OP and nor it violated provisions of any law in charging VAT as extra on the discounted price. Complainant himself accepted the terms and conditions of OP while paying sale consideration amount without protest. Complainant was made well aware regarding terms and conditions of applying VAT extra on the discounted price and as such now complainant estopped  by his act and conduct from filing this complaint. Present complaint contains afterthought versions and the same is filed with intention of harassing OP. Other allegations of complaint regarding charging of extra VAT tax amount of Rs.47.15 N.P. denied but by admitting that discount of 40% on MRP was offered. VAT alleged to be levied as per rules and regulations.

3.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith original tag and bill Ex.C-1 and thereafter closed evidence.  On the other hand, counsel for the OP tendered in evidence affidavit Ex.OP-1/1 of Shri Gurpreet Mann alongwith document Ex.OP-1 and Mark-A and thereafter closed evidence.

4.             Written arguments not submitted by any of the parties. Oral arguments heard and records gone through.

5.             From the pleadings of the parties and the submitted evidence as well as contents of invoice Ex.C-1 alongwith tag, it is made out that MRP of the purchased product was Rs.1,299/- inclusive of all taxes. After giving discount of Rs.519.60 N.P., an amount of Rs.779.40 N.P. was the discounted price, but VAT amount of Rs.47.15 N.P. @ 6.05%, was additionally charged. ROD of 0.45 even was charged. Total paid amount by complainant through invoice Ex.C-1 was Rs.827/- . So from this, it is obvious that complainant despite getting discount offer, had to pay the VAT amount in addition to the discounted price amount. This is despite the fact that MRP of Rs.1,299/- includes all taxes. That certainly is an unfair trade practice as per law laid down by Hon’ble National Commission and Hon’ble State Commission. In holding this view, we are fortified by law laid down by Hon’ble National Commission in case titled as M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma bearing Revision Petition No.3477 of 2016 decided on 04.01.2017. Similar view also taken by Hon’ble State Consumer Disputes Redressal Commission, UT Chandigarh in its judgment dated 23.05.2017 titled as M/s Aero Club Vs. Ravinder Singh Dhanju bearing First Appeal No.136 of 2017. After going through ratio of these cases, it is made out that when MRP includes all taxes, then VAT/other taxes cannot be charged separately, meaning thereby that after discount, no VAT can be charged. Ratio of both these cases lays that on discounted price of the product, VAT cannot be charged and as such certainly practice of charging VAT on discounted price, is unfair trade practice.  The same practice followed by OP in this case by charging VAT on the discounted price and as such certainly complainant entitled to refund of excess charged amount of Rs.47.15 N.P. with interest @ 6% per annum w.e.f. the date of  purchase namely 21.05.2017 till realisation. On account of above said act of charging VAT illegally, complainant suffered mental agony and harassment and was dragged in litigation and as such he is entitled to compensation as well as litigation expenses.

6.             Learned counsel for the OP vehemently contends that as order dated 04.01.2017 passed by the Hon’ble National Commission in case of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra)  has been challenged before the Hon’ble Supreme Court and as the Hon’ble Supreme Court has admitted the Special Leave Petition, as disclosed by contents of Mark-A, and as such benefit from ratio of cases  of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra) and M/s Aero Club Vs. Ravinder Singh Dhanju (supra)  referred above, cannot be got by the complainant. That submission of counsel for OP has no force because it is well settled that bare filing of Special Leave Petition or admission thereof, will not tantamount to staying of operation of orders of Hon’ble National Commission. The ratio of above quoted case of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra) of Hon’ble National Commission is binding on this Forum and as such the same has to be followed, in abeyance to the orders passed by any other District Forum or Hon’ble State Commission. Provisions of Order 41 Rule 5 of CPC also provide that mere filing of appeal does not amount to stay of operation of orders under challenge in appeal. Upon the same analogy, it has to be held that even if Special Leave Petition through Mark-A may have been admitted by Hon’ble Supreme Court, despite that inference of stay of operation of law laid down by Hon’ble National Commission in case of M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma (supra) cannot be drawn.

7.             Learned counsel for the complainant vehemently contends that exemplary costs of more than Rs.10,000/- should be allowed, so that such practice may not be followed in future by OP. However, law prohibits unjust enrichment. After going through Para No.4 of case titled as M/s Aero Club Vs. Ravinder Singh Dhanju (supra) it is made out that in  the reported case also, District Forum allowed compensation for physical and mental harassment of Rs.2,000/- but litigation expenses of Rs.1,000/-.  Those amounts not enhanced in appeal even. VAT charged in the case before us is not too much and as such allowing of compensation for mental harassment and agony of Rs.2,000/- and litigation expenses of Rs.2,000/- more against OP only is justified because these amounts are reasonable by keeping in view monetary sufferings of the complainant, more so when interest @ 6% per annum also allowed on the excess charged amount.

8.             As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.47.15 N.P. with interest @ 6% per annum w.e.f. 21.05.2017 till payment. Compensation for mental agony and harassment of Rs.2,000/- and litigation expenses of Rs.2,000/- more allowed in favour of complainant and against  OP.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order. Certified copies of the order be supplied to the parties free of cost and thereafter the file be indexed and consigned to the record room.           

Announced

February 02, 2018.

                                                                (G.K. Dhir)

                                                                President

                                                     (Amrinder Singh Sidhu)                                                                       Member

(Mrs. Natasha Chopra)

Member