Chandigarh

DF-II

CC/19/2015

Vikas Kuthiala - Complainant(s)

Versus

Yo China Restaurant - Opp.Party(s)

Sh. Sunil Narang Adv.

29 Sep 2015

ORDER

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

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Consumer Complaint  No	:	19 of 2015
Date  of  Institution	:	09.1.2015
Date   of   Decision	:	29.09.2015

 

 

 

 

 

Vikas Kuthiala S/o Sh. Kuldip Kuthiala R/o H. No. 105, Sector 27-A, Chandigarh.

 

             …..Complainant

Versus

 

1. Yo China Restaurant at SCO No. 4&5, Sector 9-D, Madhya Marg, Chandigarh through its Manager.
2. UJ’s being franchise of Yo China Restaurant at SCO No.4&5, Sector 9-D, Madhya Marg, Chandigarh through its Manager/Director.
3. Chandigarh Administration, U.T., Secretariat Sector-9, Chandigarh through its Excise & Taxation Commissioner.

….. Opposite Parties

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         SH.JASWINDER SINGH SIDHU       MEMBER

         MRS.PRITI MALHOTRA             MEMBER

 

 

For complainant(s)      :     Complainant in person, Advocate          

For OP No.1&2           :     Sh Sumit Sharma,Advocate

For OP No.3             :     Sh. Jatinder Singh, GP

 

 

PER JASWINDER SINGH SIDHU, MEMBER

 

 

            The facts, in brief, are that the complainant alongwith his family visited OP No.1 on 11.6.2014 at around 8.30 pm. for having refreshment and dinner. The beverages, refreshment and dinner were served to the complainant by the waiters of OP No.1. After the complainant and his family finished their dining they were handed over bill Annexure C-1 by OP No.1  wherein OP No.1 charged arbitrary illegal and unjust amount of Rs.72.94 towards services charge (being 5% of the total billed amount of Rs.1042/-).  Apart from this OP No.1 had also charged an amount of Rs.115.38 towards VAT being 12.50% of the total bill amount.  OP No.1 also charged an amount of Rs.55.08 towards service tax being 4.94 of he total billed amount. As such OP No.1 charged a total amount of Rs.1285.00 from the complainant. The complainant protested the illegal charges by OP No.1 but to no effect. It has been stated that charging of amount of service tax of Rs.55.08 @4.94 on the total billed amount is illegal and impermissible in law. The Chandigarh Administration vide its order dated 31.10.2014 Annexure C-3 specifically held the levy of service charge had no sanction of any law, as  the levy of any amount of money by the Hotels and Restaurant in Chandigarh towards the service charge, which is voluntary and on the wish and desire of the customer subject to his satisfaction, is illegal and unjustified. Thus levy of service charge by OP No.1 for the beverages, refreshment and meals ordered by the complainant was illegal and impressible in law. It has further been stated that the aforesaid acts of the Opposite Parties No.1&2 amounted to deficiency in rendering service and indulgence into unfair trade practice. When the grievance of the complainant was not redressed left with no alternative the instant complaint was filed.

 

2]        Opposite Parties No.1&2 while admitting the factual matrix of the case stated that UJ’s had taken franchisee of Yo China restaurants and the service charge was clearly mentioned in the Menu Card on the bottom and is only for the services availed by the complainant and the complainant placed his order only after looking at the Menu Card where it is specifically written that Local Taxes Extra as applicable.  Answering OPs levy 7% service charge.  It has further been stated that Service charges are charged for the services availed by the customers at the restaurant. There is no law in the country which provides that the service should be provided free to the customers.  It has further been stated that the service charge levied by OP No.2 was for the quality of service provided by it.  It has further been stated that VAT @12.50% and Service Tax @4.94% are levied by the government which the restaurants had to pay. It has further been stated that the order of dated 31.10.2014 of Excise and Taxation Commissioner has no relevance as the same was passed after the cause of action arose to the complainant on 11.6.2014. Pleading no deficiency in service and denying rest of the allegations, it is prayed that the complaint be dismissed.

          OP No.3 in its reply stated that the complainant unnecessarily arrayed it as party though no allegation of deficiency in service was leveled against OP No.3 and as such the complaint is not maintainable against Op No.3. OP No.3 admitted issuance of order dated 31.10.2014 but the same was challenged in writ Petition No.23369 of 2014 wherein order Annexure R-1 was passed. Thereafter in super-session of letter dated 31.10.2014 letter dated 24.2.2015 was issued wherein it was again clarified that the service charges S.C. or S. Charge is not a government levy but still it is collected by the restaurants ranging between 5% to 10% over and above the bill for food etc. it was further clarified that as per definition of the sale price under section 2(zg) of the Punjab Value Added Tax Act, 2005 as extended to an applicable to U.T., Chandigarh any sum charged for anything done by the person in respect of goods at the time of or before the delivery thereof constitutes a part of sale price. But no service tax is being paid by the restaurant owners on the service charges being levied, nor the said amount is included in the gross turnover. The said amount of services charges had to be included in the gross turnover of dealers as per the sale price given in Section 2(zg) of the PVAT Act ibid and is liable to be subjected to levy of tax as well as payment of interest and penalty as applicable in accordance with the provision of Act. Accordingly all concerned dealers doing the business of restaurants/eateries were directed to show cause as to why the service charges levied and collected by them from the consumers  over and above the bill for food etc. be not included in the gross turnover and taxes and penalized accordingly as per the provisions of the Act ibid and the Rules made there under. However, the matter is under process. It was further stated that there was no deficiency on the part of OP No.3. It has been prayed that the complaint be dismissed with cost.

3]        The Complainant also filed rejoinder thereby reiterating the averments as made in complaint and controverting that of the Opposite Parties made in the reply.

4]        Parties led evidence in support of their contentions.

5]        We have heard the complainant in person, ld. Counsel for Opposite Parties and have also perused the record.

6]        The complainant has preferred this complaint against the OPs on ground of demand of service charges at the rate of 7% amounting to Rs.72.94 from the complainant by the Opposite Parties on 11.6.2014, when he had visited the premises of Opposite Party NO.1 along with his family.  The complainant has alleged that the demand of service charges along with VAT as well as Service Tax is illegal and uncalled for, for the reason that there is no basis or logic to charge such an amount as the same is not under any law, statute or govt. instructions.  The complainant has even mentioned that the OPs while calculating the service charges at the rate of 7% went to the extent of charging the same on the amount, which included the VAT quotient at the rate of 12.5%.  Thus claiming deficiency in service on their part, sought the quoted relief. 

7]        The complainant has placed on record Ann.C-3, which is a notification by Chandigarh Administration issued under the signatures of Excise & Taxation Commissioner, U.T., Chandigarh. The date of this notification is 31.10.2014.

8]        The Opposite Parties have contested the present complaint of the complainant claiming that the Opposite Parties while charging the VAT as well as the service tax are doing so as per the govt. instructions and also to the extent as made applicable from time to time.  With regard to the service charges, the OPs have placed on record the copy of the circular dated 24.2.2015 claiming that the same has been issued by Excise & Taxation Commissioner, UT, Chandigarh in this context.

9]        We have perused the documents placed on record by the parties and are of the opinion that the complainant, who had visited the premises of the OPs on 11.6.2014 had no doubt availed the services of the OPs, while having his meals along with his family and making a payment of Rs.1285/-, which included the sub-total of Rs.1,042/-, VAT @12.5% amounting to Rs.115.38, Service Tax @4.94% amounting to Rs.55.08 and Service Charges at the rate of 7% amounting to Rs.72.94.

10]       The complainant has claimed that the demand of service charges by the OPs is unjust and illegal as the notification by the Chandigarh Administration clearly holds the same to be arbitrary and illegal.  Therefore, the OPs should be held liable for rendering deficient services and also unfair trade practice. 

11]       The complainant has placed on record the copy of notification dated 31.10.2014 meaning thereby that the same came into force after the date of its notification dated 31.10.2014.  It is the settled preposition of law that any govt. notification comes into force from the date of its publication and becomes post-effective and cannot be made applicable retrospectively.  The complainant has tried to take the shield of the notification dated 31.10.2014, however, his cause of action against the OPs with regard to the claim of service charges is dated 11.6.2014, meaning thereby that the contents of notification dated 31.10.2014 cannot be made applicable to the case of the complainant to hold the OPs deficient in rendering proper service to him.

12]       Our such views are fortified from the judgment of Hon’ble S.C.D.R.C., UT, Chandigarh in FA No.166 of 2015 titled Nando’s Sukhmani Enterprises Vs. Gurinder Singh & Anr., decided on 14.8.2015, wherein in Para No.16, it has been held that :-

“…..that Chandigarh Administration vide instructions dated 31.10.2014 declared service charge as illegal. It may be stated here, that the transaction, in question, in which, the appellant charged service charges, took place on 27.10.2014, when Chandigarh Administration’s instructions dated 31.10.2014, had not come into existence ………….” 

        

13]      In view of the above discussion and settled law, we are of the opinion that the complaint deserves to be dismissed.  Accordingly, the complaint is dismissed with no order as to costs.

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

29.09.2015          

                                                                                       Sd/-

 (RAJAN DEWAN)

PRESIDENT

 

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER

 

 

Sd/-

(PRITI MALHOTRA)

MEMBER

Om                                                                                                                        

 

 

DISTRICT FORUM – II

CONSUMER COMPLAINT NO.19 OF 2015

PRESENT:   None   Dated the 29th day of September, 2015

O R D E R                        Vide our detailed order of even date, recorded separately, the complaint has been dismissed against Opposite Parties.                    After compliance, file be consigned to record room.

 

(Priti Malhotra)	(Rajan Dewan)	(Jaswinder Singh Sidhu)
Member	President	Member