Chandigarh

DF-I

CC/583/2015

Vikas Goel - Complainant(s)

Versus

Swagath Restaurant and Bar - Opp.Party(s)

Atul Goyal

19 Feb 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

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Consumer Complaint No.	:	CC/583/2015
Date of Institution	:	31/08/2015
Date of Decision	:	19/02/2016

 

Vikas Goel s/o Sh. Mohan Lal r/o House No.387, Sector
32-A, Chandigarh.

…..Complainant

V E R S U S

Swagath Restaurant and Bar, SCO 7, Sector 26, Madhya Marg, Chandigarh through its Managing Director.

……Opposite Party

 

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

                                       

                                                                       

ARGUED BY	:	Sh. Rajat Nakra, Counsel for complainant
	:	Sh. V.K. Sachdeva, Counsel for OP

                       

                 

PER SURJEET KAUR, PRESIDING MEMBER

1.         Sh. Vikas Goel, complainant has filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against Swagath Restaurant and Bar, Opposite Party (hereinafter called the OP), alleging that he alongwith his friends and relatives visited the restaurant/bar of OP on 4.7.2015 and ordered various items.  At the time of payment, the OP raised a bill amounting to Rs.4,552/- inclusive of service charge @ 10%, VAT and service Tax in blatant violation of law. The complainant protested with the OP, but, it did not budge and he had to pay the amount of the bill. Thereafter the complainant sent a legal notice dated 10.8.2015 to the OP claiming refund of the exorbitant amount charged by it, but, to no avail. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OP, the complainant has filed the instant complaint.
2.         In its written reply, OP has admitted the factual matrix of the case. It has been averred that on every page of the menu it was clearly mentioned in capital letters that “10% service charges, taxes/VAT extra as applicable.”  It has been contended that there was no wrongful charging of service charge and that the VAT and service tax were charged by the OP as per laws framed by the State Government and Central Government.  The receipt of legal notice from the complainant has been denied. Pleading that there is no deficiency in service or unfair trade practice on its part, OP has prayed for dismissal of the complaint. 
3.         In his rejoinder, the complainant has controverted the stand of the OP and has reiterated his own.
4.         The parties led evidence in support of their contentions. 
5.         We have gone through the record and heard the arguments addressed by the learned Counsel for the parties.
6.         So far as the question of wrongly charged service charge of Rs.350.40 is concerned, it is important to note that a similar complaint filed by one Sh. Gurinder Singh s/o Sh. Balbinder Singh against Nando’s Sukhmani Enterprises was allowed by this Forum. However, Nando’s Sukhmani Enterprises went in appeal and the Hon’ble State Commission, UT, Chandigarh in First Appeal No.166 of 2015 decided on 14.8.2015, after taking into consideration the memo dated 24.2.2015 and the law settled by the Hon’ble Delhi High Court, held that the restaurants/eateries can levy service charges from the consumers and the order passed by this Forum was set aside. The said order of the Hon’ble State Commission, UT, Chandigarh has not been set aside in appeal/revision by the Hon’ble National Commission or the Hon’ble Supreme Court, therefore, the same is binding on this Forum. The Govt. has not issued any such notification that levy of such service charge by restaurants/eateries is illegal.  Accordingly, on the basis of the above said judgment of the Hon’ble State Commission, UT, Chandigarh, we hold that the restaurants/eateries can levy service charge on the consumers.
7.         Now we need to consider about the other allegations of wrong calculation of the service tax in the bill (Annexure C-1).  We have considered the defence pleaded on behalf of the OP who claim to charge service tax @ 12.36% on the invoice price, but, the same is charged on the amount inclusive of service charge levied by the OP.  Before coming to the conclusion, we need to check whether the OP charged the service tax as per the provisions governing the same.  It is quite clear from Ex.R-1/2 annexed at page 62 of the written statement of the OP that as per Section 2C of the Service Tax (Determination of value) Rules 2006, service providers are authorised to charge service tax on 40% of the bill amount only and 60% in case of outdoor catering. The quoted section 2C has been inserted by Service Tax (Determination of Value) Second Amendment Rules, 2012 vide notification No.24/2012-ST dated 6.6.2012 w.e.f 1.7.2012. The said provision is reproduced as under :-

“2C   Determination of value of service portion involved in supply of food or any other article of human consumption or any drink in a restaurant or as outdoor catering.-

Subject to the provisions of Section 67, the value of service portion in an activity wherein goods being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity at a restaurant or as outdoor catering, shall be the specified percentage of the total amount charged for such supply, in terms of the following Table, namely :-

Sl. No.	Description	Percentage of the total amount
(1)	(2)	(3)
1.	Service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity, at a restaurant.	40
2.	Service portion in outdoor catering wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of such outdoor catering.	60

 

Therefore, if we go through the aforesaid table, it is clear that the OP is entitled only to charge service tax on 40% of the bill amount and not on the whole invoice price as is illegally charged in the present case.  Moreover, as per its own contention with regard to the service tax applicable on the entire amount, including the sum of service charge, and not only on the amount of food is concerned, the OP itself has not produced any cogent, convincing and reliable document to explain the reason for the same.  Thus, it is clear-cut defiance of the provisions and rules mentioned above.  Who knows how many innocent customers are forced to pay extra service tax illegally in this manner? So, the act of OP in overcharging the service tax amounts to unfair trade practice which resulted in mental agony and harassment to the complainant.

8.         In view of the above discussion, the present complaint deserves to succeed and the same is partly allowed. OP is directed :-

(i)     To refund the excess amount of service tax illegally charged from the complainant.

(ii)    To pay Rs.10,000/- as compensation to the complainant for the harassment caused to him.

(iii)   To also pay a sum of Rs.7,000/- to the complainant as litigation expenses.

9.         This order be complied with by the OP within one month from the date of receipt of its certified copy, failing which it shall make the payment of the amount mentioned at Sr.No.(ii) above, with interest @ 12% per annum from the date of filing of the present complaint till realization, apart from compliance of directions at Sr.No.(i) & (iii) above.
10.         The certified copies of this order be sent to the parties free of charge. The file be consigned.

	Sd/-	Sd/-
19/02/2016	[Suresh Kumar Sardana]	[Surjeet Kaur]
hg	Member	Presiding Member