Chandigarh

DF-II

CC/90/2017

Jasbir Kaur - Complainant(s)

Versus

Shop Manager, Reebok Basic Clothing Pvt. Ltd., - Opp.Party(s)

Gaurajit Singh Adv.

02 Aug 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

U.T. CHANDIGARH

Consumer Complaint  No	:	90/2017
Date  of  Institution	:	27.12.2016
Date   of   Decision	:	02.08.2017

 

 

 

 

 

Jasbir Kaur w/o Sh.Apinder Singh r/o H.No.446, Sector 20, Chandigarh

                   …..Complainant

Versus

 

Shop Manager, Reebok Basic Clothing Pvt. Ltd., Shop No.101, First Floor Elante Mall, Chandigarh

….. Opposite Party

 

BEFORE:     SHRI RAJAN DEWAN, PRESIDENT

SMT.PRITI MALHOTRA, MEMBER

SH.RAVINDER SINGH, MEMBER

 

Present:     Sh.Simranjeet Singh, Adv. for the complainant.

                   Sh.Manoj Lakhotia, Adv. for the OP.

 

PER RAJAN DEWAN, PRESIDENT

                In brief, the facts of the case are that the complainant purchased a pair of slippers of the MRP of Rs.999/-  on discount vide invoice dated 22.12.2016 for Rs.674/- including Rs.74.92P charged as VAT @ 12.5% on the discounted price. It has been averred that the MRP is always inclusive of all the taxes including VAT. The complainant has alleged that the Opposite Party has adopted unfair trade practice by charging extra VAT on the discounted price. Hence, alleging the aforesaid act & conduct of the Opposite Party as deficiency in service and unfair trade practice, the complainant has filed the present complaint.

2.           In its written statement, Opposite Party took the preliminary objections inter alia that the complainant was fully aware of the terms and conditions displayed by the OP before purchasing the product in issue and after knowing about the discount offer and after being fully aware of the terms and conditions on which the discount offer could be availed, the complainant after due application of mind accepted the terms and condition by paying the consideration amount without any protest whatsoever.  It has further been pleaded that since the issue charging VAT on the discounted price is already sub judice before the Hon’ble Supreme Court in SLP No.8868 of 2017 titled as M/s Aero Club (Woodland) Vs. Rakesh Sharma and the Hon’ble Apex Court was pleased to admit the SLP and grant leave vide order dated 31.03.2017 and, therefore, the complaint is required to be adjourned sine die. Pleading that there is no deficiency in service on its part, a prayer for dismissal of the complaint has been made.
3.           We have heard the Counsel for the parties and have also gone through the evidence on record.
4.           The Counsel for the OP has argued that since the SLP No.8868 of 2017 titled as M/s Aero Club (Woodland) Vs. Rakesh Sharma is subjudice before the Hon’ble Apex Court and, therefore, the proceedings in the instant case be adjourned as sine die. However, he has not been able to place on record any stay order and as such the objection of the Counsel for the OP, in this regard, cannot be accepted and the same is rejected accordingly.
5.           The core question which survives for determination is whether VAT can be charged on the discounted price when MRP of a product is inclusive of all taxes? The answer to this question is in the negative.
6.           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. When once it is displayed that the MRP is inclusive of all taxes, then in no circumstances the VAT can be added to it afterwards.
7.           In the present complaint, the Opposite Party had charged 12.5% extra VAT in spite of the specific mentioning of the maximum retail price (inclusive of all taxes). Since it is an offence to sell at a price higher than the marked price, so it is also not legal to charge any tax on the product/item carrying tag of maximum retail price inclusive of all taxes.
8.           After giving our thoughtful consideration, we are of the considered opinion that no one can charge any tax on the product where MRP is mentioned as inclusive of all taxes including VAT/other taxes etc. When MRP of the goods is inclusive of all taxes then VAT/other taxes cannot be charged separately; which establish that MRP includes VAT also and after discount no VAT can be charged, so on discounted product also VAT cannot be charged.  But as in the present complaint, it is quite clear vide Annexure C-1 that MRP of the item in question is ‘inclusive of all taxes’, so the charging of VAT @12.5% separately on the discounted price is clearly unfair trade practice resorted to by the Opposite Party.
9.           A similar question arose for determination before our 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 inclusive of all taxes, then VAT/Other taxes cannot be charged separately.  In the 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 5% VAT or tax, is certainly against the trade practice.
10.           The ratio of the afore-cited judicial pronouncements are squarely applicable to the present lis. Therefore, the act of the Opposite Party in charging VAT on discounted article in question, clearly proves deficiency in service having indulged into unfair trade practice on its part, which certainly had caused immense mental and physical harassment to the complainant.
11.           For the reasons recorded above, the present complaint is allowed qua the OP. The Opposite Party is directed as under:-

a]      To refund the excess amount charged as 12.5% VAT i.e. Rs.75/- from the complainant.

b]      To pay an amount of Rs.1,000/- to the complainant as compensation for mental agony & physical harassment;

c]      To pay Rs.1,100/- as litigation expenses.

12.           This order shall be complied with by the Opposite Party within a period of 30 days from the date of receipt of its copy, failing which it shall be liable to pay interest @9% per annum on amount as mentioned at sub-para (a) & (b) above from the date of this order till it is paid, apart from paying litigation expenses.
13.           The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

02.08.2017                                                        

Sd/-

(RAJAN DEWAN)

PRESIDENT

 

Sd/-

(PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER