Chandigarh

StateCommission

A/101/2016

M/s ADI Sports - Complainant(s)

Versus

Shyam Sunder Sharma - Opp.Party(s)

Inderjit Singh

23 May 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Appeal No.	:	101 of 2016
Date of Institution	:	31.03.2016
Date of Decision	:	23.05.2016

 

M/s ADI Sports, Shop No.18, Ground Floor, DT Mall, I.T. Park, Kisangarh, Chandigarh – 160101, through its Authorized Signatory.

……Appellant/Opposite Party No.1

V e r s u s

1. Shyam Sunder Sharma son of Shri L.P. Sharma, resident of House No. 302, E-Block, Shvalik Vihar, Naya Goan, District S.A.S. Nagar, Mohali.

……Respondent no.1/Complainant.

2. M/s Reebok India Company, 7^th Floor, Unitech Commercial Tower-II, Sector 45, Block-B, Greenwood City, Gurgaon – 122001, Haryana, through its Authorized Signatory.

              ....Respondent No.2/Opposite Party No.2

Appeal under Section 15 of the Consumer Protection Act, 1986.

 

BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

                MR. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER

 

Argued by:Sh.Inderjit Singh, Advocate for the appellant.

                Sh.Gaurav Bhardwaj, Advocate for respondent no.1

                Service of respondent no.2 dispensed with vide order                     dated 04.04.2016.

 

PER JUSTICE JASBIR SINGH (RETD.), PRESIDENT

            This appeal is directed against an order dated 14.01.2016, rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which, it accepted a complaint, filed by the complainant (now respondent no.1) and directed Opposite Party No.1 (now appellant), as under:-

“For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Party No.1, and the same is accordingly allowed. The Opposite Party No.1 is directed:-

 [a]     To refund the wrongly charged VAT of Rs.79.47P to the Complainant          

[b]     Pay Rs.15,000/- as compensation on account of deficiency in service and causing mental and physical harassment to the Complainant and certainly for having indulged into unfair trade practice. 

[c]      Pay Rs.5,000/- towards costs of litigation;

The complaint against Opposite Party No.2 fails and is accordingly dismissed with no order as to costs. 

The above said order shall be complied within 30 days of its receipt by the Opposite Party No.1; thereafter, it shall be liable for an interest @18% 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.5,000/-. ”

2.       Before the Forum, it was case of respondent no.1 that he had purchased two T-shirts with a promise from the appellant that flat discount to the tune of 70% will be given on the sale price. It was further stated that Maximum Retail Price (MRP) of both the T-shirts  was mentioned as Rs.2299/- and Rs.2999/-, respectively. After giving benefit of discount, both the T-shirts were sold to respondent no.1, for an amount of Rs.689.70Ps. and Rs.899.70Ps. respectively.  It is averment of respondent no.1 that upon the said amount, Value Added Tax (VAT) @5% was also levied by the appellant. The amount paid in excess was shown as Rs.79.47Ps. By stating that the appellant had adopted unfair trade practice and also that there was deficiency in providing service on its part, consumer complaint bearing no.400 of 2015 was filed by respondent no.1 before the Forum, on 29.07.2015.
3.       Upon notice, the appellant in its written reply, while admitting the factual matrix of the case, stated that as per terms & conditions of the offer, percentage of discount was applicable only on the MRP of the merchandise. VAT was to be charged extra from the customers. Hence, an amount of Rs.79.47Ps. was charged  from respondent no.1. VAT was rightly levied, as per the provisions of the VAT Act of Punjab & Haryana, 2003. It was clearly displayed in the Store that VAT would be charged extra, over the discounted sale price.
4.       Respondent no.2, in its reply, while admitting the factual matrix of the case, pleaded that its products are being retailed through franchisees, on principal-to-principal basis. It was asserted that since the alleged VAT @5% had been charged on a sale, made at the store, operated by the appellant, as such, it (respondent no.2) had no role to play.
5.       The Parties led evidence, in support of their case.
6.       After hearing Counsel for the parties, and on going through the evidence, and record of the case, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order. 
7.       Feeling aggrieved, the instant appeal, has been filed by the appellant/Opposite Party No.1.
8.       Service of respondent no.2 was dispensed with, vide order dated 04.04.2016.
9.       We have heard Counsel for the appellant, and respondent no.1 and, have gone through the evidence, and record of the case, carefully. 
10.       Counsel for the appellant vehemently contended that as per notice put on front window glass of the store, it was specifically stated that VAT will be charged extra on the items, after giving discount. It was further stated that VAT amount has been realized, only to transfer it to the Competent Authority. He prayed that appeal be allowed and order under challenge be set aside.
11.       We are not inclined to do so. The Forum also rejected the similar contention, raised by the appellant, by observing as under:-

9. It has been contended by the Opposite Party No.1 that it had clearly displayed in the Store that VAT would be charged extra over the discounted sale price, therefore, no unfair trade practice can be attributable on its part. However, we are not impressed with this for the sole reason that it is not the case of the Opposite Party No.1 that the amount of VAT charged has been deposited with the respective taxation authorities. At any rate, there is nothing on record to show that the VAT charged from the customers is deposited with the respective taxation authorities. Furthermore, the Opposite Party No.1 has miserably failed to produce on record any cogent, convincing and reliable piece of evidence in the shape of any rules/instructions authorizing it to levy/charge the amount of VAT in question on the MRP, which is mentioned on the Price Tag (Annexure C-2) as “inclusive of all taxes” from the gullible consumers.

10.           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 about 10 to 15 percent lower than the MRP. Sometimes, the printed MRP is so high that the difference between the selling price and the MRP can be as much as 30 to 50 percent. As 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 MRP when it is specifically mentioned that “inclusive of all taxes”.       

11. 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..  

12.           Though Opposite Party No.1 had offered 70% discount on the articles in question, still it charged 5% extra VAT on discounted price inspite of specific mention on the tag MRP inclusive of all taxes as is evident vide Annexure C-2. When, once it is mentioned as MRP with inclusive of all taxes, charging of 5% VAT or tax, is certainly 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.”

12.       We are satisfied that once it is mentioned on a label put on the T-shirts that MRP includes the taxes imposed, then after giving discount, it was not open to the appellant to tax the goods again. For adopting the said procedure, nothing has been brought on record by the appellant, to say that levy was justified. Probably double taxation is not permissible. The appellant, thus, adopted unfair trade practice, on that count. The amount of Rs.79.47Ps., was charged in excess by the appellant, from respondent no.1. When granting relief to respondent no.1, an amount of Rs.15,000/- was allowed, on account of unfair trade practice, having been adopted by the appellant. We have seen no document on record, proving the case of the appellant and, as such, no interference is required to be made, in the order under challenge, on this count.
13.       However, at the time of arguments, it was realized that compensation awarded to the tune of Rs.15,000/-, was on the higher side. There is nothing on record to show that respondent no.1, had suffered mental agony and physical harassment, on account of excess charging of above said paltry amount towards VAT. Before the Forum and also this Commission, respondent no.1 continued to appear through his Counsel. It is settled principle of law, that compensation should neither be excessive nor too meagre. It must commensurate with the facts and circumstances of the case. In Surendra Kumar Tyagi Vs. Jagat Nursing Home and Hospital and Another, IV (2010) CPJ 199 (N.C.), it was held by the National Consumer Disputes Redressal Commission, New Delhi, that the compensation should be commensurate with loss and injury, suffered by the complainant. The Consumer Foras are not meant to enrich the consumers, at the hands of the service providers, by awarding excessive compensation. In these circumstances, we feel that compensation awarded is on the higher side and it is reduced to Rs.5,000/- from Rs.15,000/-.
14.       No other point, was urged, by Counsel for the parties concerned.
15.       For the reasons recorded above, the appeal is partly accepted, with no order as to costs. The order of the Forum is modified, and the appellant is directed as under:
    1. To pay compensation to the tune of Rs.5,000/-, on account of deficiency in providing service; adoption of unfair practice and causing mental agony and physical harassment to respondent  no.1, instead of Rs.15,000/- granted by the Forum.
    2. The reliefs qua refund of amount of Rs.79.47Ps. and also Rs.5,000/- towards litigation expenses, granted by the Forum, shall remain intact.
    3. This order shall be complied with, by the appellant, within a period of 45 days, from the date of receipt of a certified copy of the same, failing which, the amounts mentioned above shall carry interest @9% p.a. from the date of filing the consumer complaint, till realization.
16.       Certified copies of this order, be sent to the parties, free of charge.
17.       The file be consigned to Record Room, after completion.

Pronounced.

23.05.2016

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

(PADMA PANDEY)

      MEMBER

 

 

Rg