Chandigarh

DF-I

CC/496/2015

Shyam Sunder Sharma - Complainant(s)

Versus

Skechers Retail India Ltd - Opp.Party(s)

Gaurav Bhardwaj

08 Apr 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

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Consumer Complaint No.	:	CC/496/2015
Date of Institution	:	04/08/2015
Date of Decision	:	08/04/2016

 

Shyam Sunder Sharma son of Shri L.P. Sharma, resident of H.No.302, E-Block, Shivalik Vihar, Naya Gaon, District SAS Nagar, Mohali.

…..Complainant

V E R S U S

1.     Skechers Retail India Limited, Elante Mall, Plot No.178A, Shop No.18, Phase-I, Industrial Area, Chandigarh through its Proprietor/Manager/Authorised Signatory.

 

2.     Skechers South Asia (P) Limited, A-2/132, Prateek Apartment, Paschim Vihar, New Delhi-110063, through its Manager/Authorised Signatory.

……Opposite Parties

QUORUM:	MRS.SURJEET KAUR	PRESIDING MEMBER
	SURESH KUMAR SARDANA	MEMBER

                                       

                                                                       

ARGUED BY	:	Sh. Gaurav Bhardwaj, Counsel for complainant.
	:	Sh. Sanjeev Trikha, Counsel for OPs.

               

PER SURJEET KAUR, PRESIDING MEMBER

1.         Sh. Shyam Sunder Sharma, complainant has filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against Skechers Retail India Limited and another, Opposite Parties (hereinafter called the OPs), alleging that tempted and appealed by the ‘Sale’ on 26.7.2015, whereby the OP had offered 50% discount on Skechers merchandise, he purchased a pair of Skechers Shoe (Style No. 27876-HPBK) with MRP of Rs.4999/- inclusive of all taxes. The Complainant was offered a discount of 50% on the purchase, and the price tag mentioned that it was inclusive of all taxes. However, when the Complainant was handed over the physical copy of the Invoice (C-1), he was shocked to notice that he was wrongly charged Rs.312.44 as 12% VAT. The Complainant, immediately, pointed out this fact to the OPs that charging 12% VAT on a product with a price tag which advertised MRP as 'inclusive of taxes', amounts to unfair trade practice, and requested to refund the illegally charged amount of Rs.312.44P, forthwith, but they flatly refused to do so. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint.
2.         In their joint written statement, the OPs have denied that they had offered 50% discount on the Skechers merchandise at the said store as alleged. It has been averred that the discounts were offered at different slabs of upto 25%, upto 40%, upto 50% and flat 50% on different products displayed at the said store. It has been contended that OP-1 had published the offer in unequivocal terms at every conceivable point of the store and with sufficient clarity that the sale of every discounted goods would be as per the terms and conditions of such sale and that VAT shall be charged extra after such discount. It has been stated that any seller, retailer is entitled to charge VAT on any sale price so long as the same does not exceed the MRP. It has been averred that the amount of Rs.4,999/- (inclusive of all taxes) was the MRP of the subject goods which was inclusive of all taxes including VAT.  It has been denied that there was any illegal action on the part of the OPs.  Pleading that there is no deficiency in service or unfair trade practice on their part, OPs have prayed for dismissal of the complaint.
3.         The parties led evidence in support of their contentions. 
4.         We have gone through the record, including the written arguments, and heard the arguments addressed by the learned Counsel for the parties.
5.         The case of the Complainant is that he was charged extra VAT @12% for the pair of Shoes with MRP of Rs.4999/- (which was inclusive of all taxes) after giving a discount of 50%.
6.         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?
7.         It has been contended by the Opposite Parties that they had clearly mentioned in the placards displayed in the Store that VAT would be charged extra over the discounted sale price, therefore, no unfair trade practice can be attributable on their part. 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 on the Price Tag (Annexure A-2) as “inclusive of all taxes” from the gullible consumers.  
8.         The Opposite Parties in their defence also pleaded that they charged VAT as per the rules, regulations and provisions of Punjab Value Added Tax 2005. The 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.
9.         The Opposite Parties also claimed that they have not charged anything above MRP of the Shoes and thus can impose VAT. This stand of the Opposite Parties again is not tenable 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 it is mentioned in the price tag of any item/product 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. 
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 much lower than the MRP.
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 if VAT is included in MRP. 
12.         At any rate, if the Opposite Parties have offered discount of 50% for an article purchased by the Complainant/Customer, then they (OPs) are bound to sell the article(s) after discount. Though Opposite Parties had offered 50% discount on the article in question, still they charged 12% extra VAT on discounted price inspite of specific mention on the tag MRP inclusive of all taxes. When, once it is mentioned as MRP with inclusive of all taxes, charging of 12% 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.
13.         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 5% 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. 
14.         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.312.44/-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.3,000/- towards costs of litigation;

 

15.         The above said order shall be complied within 30 days of its receipt by the Opposite Parties; thereafter, they 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.3,000/-. 
16.         Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

	Sd/-	Sd/-
08/04/2016	[Suresh Kumar Sardana]	[Surjeet Kaur]
	Member	Presiding Member
“Dutt”