Chandigarh

DF-I

CC/649/2016

Navneet Jindal - Complainant(s)

Versus

United Colors of Bentton - Opp.Party(s)

In person

06 Apr 2017

ORDER

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

============

Consumer Complaint  No	:	CC/649/2016
Date  of  Institution	:	16/08/2016
Date   of   Decision	:	06/04/2017

 

 

 

 

 

Navneet Jindal S/o Sh. Ram Lal Jindal, resident of House No.1195, Sector 42-B, Chandigarh.

 Complainant.

Vs

 

[1]  United Colors of Benetton, ADI Sports (DT Chandigarh), DT Mall, Shop No. 121-122, IT Park, Chandigarh, through its Manager/ Authorized Person/ Owner.

 

[2]  Benetton India Pvt. Ltd., B-25, Sector 34, Infocity, Gurgaon – 122001, Haryana, India, through its Manager/ Authorized Person/ Owner.

 Opposite Parties

 

BEFORE:   SH. S.S. PANESAR             PRESIDENT

SMT.SURJEET KAUR             MEMBER

          SH. SURESH KUMAR SARDANA     MEMBER

 

Argued by: Complainant in person.

            Opposite Party No.1 Ex-parte.

                   Sh. Krishan M. Vohra, Counsel for OP No.2.

 

PER SURJEET KAUR, MEMBER

 

          Succinctly put, the Complainant had purchased a Trouser from the Opposite Party No.1 on 13.08.2016, under a promotional offer of 70% off. It has been averred that the MRP of the said Trouser was Rs.1099/- which was inclusive of all taxes. It has been alleged that after giving 70% discount, the Opposite Party No.1 had charged Rs.329.70/- from the Complainant and had also charged Rs.16.49/- as 5% VAT (totaling Rs.346.19/-) which was already inclusive of all taxes (Invoice at Pg.8 of the paper book). The Complainant accordingly raised the issue with the Opposite Party No.1, but to no avail. Hence, alleging the aforesaid act & conduct of the Opposite Parties as deficiency in service and unfair trade practice, the Complainant has filed the present Complaint.

 

2.      Notice of the complaint was sent to Opposite Parties seeking their version of the case. However, nobody appeared on behalf of Opposite Party No.1 despite service, therefore, it was proceeded ex-parte.

 

3.      Opposite Party No.2 in its reply, while admitting the factual aspects of the case, has pleaded that MRP does not amount to collection of tax from consumers, and that it is labelled as inclusive of all taxes merely to satisfy the requirements of Metrology Rules. It has been urged that advertisement terms & conditions qua the same was also displayed at the show room. The Complainant accepted the Scheme and happily paid the price. Thus, it cannot be said that at the time of purchase, the Complainant was not aware of the terms & conditions, applicable to the said discount scheme. Pleading that there is no deficiency in service or unfair trade practice on its part, Opposite Party No.2 has prayed for dismissal of the complaint.

 

4.      The Complainant also filed replication to the written statement filed by the Opposite Party No.2, wherein the averments as contained in the complaint have been reiterated and those as alleged in the written statement by the Opposite Party No.2 has been controverted.

 

5.      Parties were permitted to place their respective evidence on record in support of their contentions.

 

6.      We have heard the Complainant in person and learned Counsel for the Opposite Party No.2 and have also perused the record.

 

7.      The case of the Complainant is that he was charged 5% extra VAT of Rs.16.49P by the Opposite Parties for the Trouser purchased by him with MRP of Rs.1099/- (which was inclusive of all taxes) after giving a discount of 70% under a promotional offer.

 

8.      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?

 

9.      Pertinently, the Opposite Party No.1 chose not to appear before this Forum and was proceeded exparte vide order dated 22.12.2016. Therefore, the evidence produced by the complainant has gone unrebutted against it.

 

10.      The Opposite Party No.2 in its defence argued that the VAT was charged as per the rules, regulations and provisions of Punjab Value Added Tax 2005. A 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. Importantly, the Opposite Party No.2 has also not referred to any particular provision which is applicable herein, in order to justify its stand. At any rate, the Opposite Party No.2 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 as “inclusive of all taxes” from the susceptible consumers.

 

11.      It has been contended by the Opposite Party No.2 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. The Opposite Party No.2 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 A-2) as “inclusive of all taxes” from the gullible consumers.   

 

12.      The Opposite Party No.2 further argued that it has not charged anything above MRP of the product in question and thus can impose VAT. This stand of the Opposite Party No.2 is bereft of any force as the discount so offered is part and parcel of its promotional policy showing hefty discounts in order to attract/ allure the gullible customers; who approach it under the misleading belief of getting hefty discounts declared by it 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 Party No.2, is offered from its own margins, as per its own choice, and is not pressurized to do so, and once the price of the product is mentioned 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. 

 

13.      In our opinion, there is a substantial 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.

 

14.      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. 

 

15.      At any rate, if the Opposite Parties had offered discount of 70% on the article purchased by the Complainant/Customer, then they are bound to sell the article after discount. Though Opposite Party No.1 had offered 70% discount on the article in question, still it charged extra VAT @5% on discounted price. Once MRP is inclusive of all taxes, charging of extra VAT or tax, to our mind, is 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.

 

16.      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 extra VAT or tax, is certainly against the trade practice.

 

17.      In Revision Petition No. 3477 of 2016 titled as “M/s Aero Club (Woodland) Versus Rakesh Sharma”, decided on 04.01.2017, along with other connected Revision Petitions No.3479 to 3483 of 2016, the Hon'ble National Consumer Disputes Redressal Commission, has held that any discount falling short of “Flat 40%” on the MRP would amount to unfair trade practice, as defined in the Act.  

 

18.      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. 

 

19.      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.16.49P/- to the Complainant  

 

[b]  Pay Rs.2,000/- as compensation on account of deficiency in service and causing mental and physical harassment to the Complainant; 

 

[c] Pay Rs.1,000/- towards costs of litigation;

 

20.      The above said order shall be complied within 30 days of its receipt by the Opposite Parties; thereafter, Opposite Parties 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 mentioned in sub-para [c] above. 

 

21.      Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

06^th April,2017                                                Sd/-

(S.S. PANESAR)

   PRESIDENT

 

Sd/-

(SURJEET KAUR)

   MEMBER

 

Sd/-

(SURESH KUMAR SARDANA)                                                                                                      MEMBER