Chandigarh

DF-I

CC/185/2017

Ranjodh Singh Dhillon - Complainant(s)

Versus

United Colors of Benetton/Adi Sports - Opp.Party(s)

Shiti Jain

27 Apr 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

 

                               

Consumer Complaint No.	:	CC/185/2017
Date of Institution	:	01/03/2017
Date of Decision	:	27/04/2017

 

Ranjodh Singh Dhillon s/o Surjit Singh, resident of House No.259-E, Shivalik Vihar, Naya Gaon, Punjab.

…..Complainant

V E R S U S

1.     United Colors of Benetton/Adi Sports, Shop No.38A, Ground Floor, Elante Mall, Industrial Area, Phase I, Chandigarh-160002 through its proprietor/Manager/ Authorised signatory.

2.     Asstt. Manager Loyalty Programs, Benetton India Pvt. Ltd., B-25, Sector-34, Infocity, Gurgaon-122001, Haryana through its Proprietor/Manager/Authorised Signatory

……Opposite Parties

 

CORAM :	S.S. PANESAR	PRESIDENT
	MRS.SURJEET KAUR	MEMBER
	SURESH KUMAR SARDANA	MEMBER

                                                       

               

Argued by	:	Ms. Shiti Jain, Counsel for complainant
	:	Sh. Krishan M. Vohra, Proxy counsel for Sh. Sumeet Goel, Counsel for OPs

 

Per S.S. Panesar, President

1.         The facts of the consumer complaint, in brief, are that in the month of January 2017, OP-1 had given advertisement of sale and offered 50% discount on all merchandise of Benetton. After going through such advertisement, the complainant went to the showroom of OP-1 on 31.1.2017 and purchased one shirt with MRP of Rs.2,199/- (inclusive of all taxes). When the complainant was handed over physical copy of the retail invoice, OP-1 had charged VAT of Rs.54.98 in addition to the discounted price of Rs.1,099.50.  The complainant raised objection, but, OP-1 compelled him to pay the amount.  Alleging that the aforesaid act amounts to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint.  
2.         OPs in their written statement have not disputed the facts with regard to purchase made by the complainant. It has been averred that the sale of products during the offer season was subject to the terms and conditions applicable to the discount offer which were duly displayed at the conspicuous places alongwith the offer advertisement at the outlet, including the billing counter. It has been stated that a discounted price does not become a new MRP that ought to be inclusive of all taxes as is being alleged by the complainant. MRP is a threshold price inclusive of all taxes as per the Metrology Rules and the same is a requirement aimed at ensuring that the consumer is made aware of the price, beyond which a particular product cannot be sold. As long as the product is sold under the MRP, the Metrology Rules stand complied with and the seller is free to determine the valuable consideration of the article for sale. It has been contended that MRP is merely a sale consideration between the two parties and cannot, under any circumstances, imply the collection of tax from the consumer. Pleading that there is no deficiency in service or unfair trade practice on their part, OPs prayed for dismissal of the complaint.
3.         The parties led evidence in support of their contentions. 
4.         We have gone through the record and heard the arguments addressed by the learned Counsel for the parties.
5.         It has been argued on behalf of OPs that the product was not sold to the complainant on MRP; rather it was sold in a discounted scheme. It was specifically intimated to the customer that VAT would be payable on the discounted price. When the product was not sold on MRP, question of inclusion of VAT in the discounted price does not arise at all. OPs have not indulged in any malpractice or unfair trade practice and it is vehemently canvassed before us that the complaint is nothing, but, an abuse of the process of law and, therefore, the same may be dismissed.
6.         From a perusal of the record, it becomes evident that the complainant did purchase a shirt from OP-1 having MRP of Rs.2,199/-, inclusive of all taxes, as is evident from the tag of the product (Annexure C-2). After giving 50% discount, the total price of the product came to be Rs.1,099.50 only, but, however, OP-1 charged an amount of Rs.1,154.47 and thereby overcharged an amount of Rs.54.98 from the complainant. The contention of the OPs that since the product has been sold at a discounted price, therefore, OP-1 was within its right to charge VAT on the discounted price is not acceptable. The OPs have also failed to substantiate their view point either through some Govt. notification or some case law. When MRP included all the taxes, charging of VAT on the discounted price would amount to indulging in unfair trade practice on the part of the OPs.
7.         The simple question for determination in the present case is whether MRP includes all taxes, including VAT, and whether, after discount, VAT can be charged or not? A similar question arose for determination before the Hon’ble State Consumer Commission, U.T. Chandigarh in First Appeal No.210 of 2015, decided on 1.9.2015 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 another 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 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 extra VAT or tax, is certainly against the trade practice. The Hon’ble State Consumer Commission, UT, Chandigarh in yet another case titled M/s Adi sports Vs. Shyam Sunder Sharma & Anr., Appeal No.101 of 2016 decided on 23.5.2016 held that “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.”
8.         The ratio of above stated pronouncements is squarely applicable to the present case. Hence, the act of the OPs in charging VAT on the discounted price clearly proves deficiency in service on their part.  As such, the OPs are liable to refund the excess amount of VAT besides compensation for mental agony, physical pain and litigation expenses to the complainant.
9.         In view of the above discussion, the present consumer complaint deserves to succeed and the same is accordingly partly allowed.  The OPs are directed as under:-

 (i)    To refund to the complainant Rs.54.98 (say Rs.55/-) being the amount of VAT wrongly charged from him;

(ii)    To pay to the complainant Rs.2,000/- as compensation for mental agony and harassment caused to him;

(iii)   To pay to the complainant Rs.1,000/- as costs of litigation.

10.         This order be complied with by the OPs within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 9% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
11.         The certified copies of this order be sent to the parties free of charge. The file be consigned.

27/04/2017	[Suresh Kumar Sardana]	[Surjeet Kaur]	[S.S. Panesar]
hg	Member	Member	President