Chandigarh

DF-II

CC/550/2016

Dr. Neetu Gupta - Complainant(s)

Versus

Shree Ram Apparels - Opp.Party(s)

Varun Chawla Adv.

04 Nov 2016

ORDER

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

Consumer Complaint  No	:	550 of 2016
Date  of  Institution	:	03.08.2016
Date   of   Decision	:	04.11.2016

 

 

 

 

Dr.Neetu Gutpa w/oSh.Tarun Gupta r/o H.No.570, Sector 6, Panchkula.

                   …..Complainant

Versus

 

Shree Ram Apparels, SH No.27, City Centre Mall, Plot No.2,Near Kishan, Chandigarh

….. Opposite Party

 

 

BEFORE:   SH.RAJAN DEWAN                             PRESIDENT

                SMT.PRITI MALHOTRA                      MEMBER

                SH.RAVINDER SINGH                        MEMBER

 

 

ARGUED BY:     

Sh.Varun Chawla, Adv. for the complainant

                   OP exparte.

 

 

PER RAJAN DEWAN, PRESIDENT

                   In brief, the case of the complainant is that the OP, in order to promote the sale of its products under the brand name of “W”, offered discount @ 40% on the M.R.P. and she purchased a kurta of the MRP of Rs.1,699/- for Rs.1070/- vide invoice dated 28.01.2016 out of which a sum of Rs.50.95 was charged towards VAT @ 5% on the discounted price.  It has been averred that the MRP of the article was already inclusive of all taxes. She also objected to the charging of 5% VAT at the MRP of the article but to no effect.  Alleging deficiency in service for the above act & conduct of the Opposite Party and also for the unfair trade practice resorted to by the OP, this complaint has been filed by the complainant.   

2.           Despite due service through registered post, none appeared on behalf of the OP and as such it was ordered to be proceeded against exparte vide order dated 04.10.2016.
3.           The complainant led evidence in support of her contentions.
4.           We have heard the ld.Counsel for the complainant and have also perused the record.
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, though Opposite Party had offered 40% discount on the article in question, still it charged 5% extra VAT on discounted price 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 that MRP of the product/item in question is ‘inclusive of all taxes’, so the charging of VAT @5% separately is clearly unfair trade practice resorted to by the Opposite Party.
9.           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.
10.           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.
11.           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. 
12.           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 product, 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.
13.           For the reasons recorded above, the present complaint is allowed and the Opposite Party is directed as under:-

a]       To refund the excess amount charged as 5% VAT i.e. Rs.50.95 (say Rs.51/-)  to the complainant.

b]      To pay an amount of Rs.2,000/- to the complainant towards compensation for mental & physical harassment.

c]       To pay Rs.1,000/- as litigation expenses.

14.           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,  besides litigation expenses.
15.           The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

04.11.2016

Sd/-

 (RAJAN DEWAN)

PRESIDENT

 

Sd/-

(PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER