Punjab

SAS Nagar Mohali

CC/722/2017

Hanumant Kumar - Complainant(s)

Versus

Yougal Sons Fashions Pvt. Ltd. - Opp.Party(s)

Kulwinder Singh

25 May 2018

ORDER

Consumer Complaint No.722 of 2017

                                                           Date of institution:  11.09.2017                                                         Date of decision  :  25.05.2018

Hanumant Kumar son of Late Shri R.C. Jhingan  resident of K. No.311  Phase-6  Mohali.

 

…….Complainant

Versus

 

Yougal Sons Fashions Pvt. Ltd. Shop No.75  1^st Floor  The North Country Mall  NH 21  Kharar  Mohali through its Proprietor/Incharge/ Manager.

                                                                        ……..Opposite Party

 

Complaint under Section 12 of

the Consumer Protection Act.

 

Quorum:   Shri G.K. Dhir  President

                Shri Amrinder Singh Sidhu

                Mrs. Natasha Chopra  Member.

 

Present:    Shri Kulwinder Singh  counsel for the complainant.

                Shri Harpreet Saini  counsel for the OP.

 

Order by :-  Shri G.K. Dhir  President.

 

ORDER

 

               On 21.08.2017  complainant after visiting outlet of OP  purchased shirt having MRP of Rs.1 749/- inclusive of all taxes. Discount on the product was given and thereafter retail invoice bill for amount of Rs.918/- including Rs.43.74 N.P. as GST @ 5% was issued. This GST could not have been charged  but despite that officials of OP claimed that they are charging the same from every customer. It was disclosed to complainant that in case GST not paid  then he will not be allowed to buy the shirt. Practice of charging GST on the discounted price alleged to be an unfair trade practice and as such this complaint filed for seeking refund of the extra charged amount of Rs.43.74 N.P. with interest. Compensation for mental harassment and agony of Rs.50 000/- alongwith litigation expenses of Rs.33 000/- more claimed.

2.             In reply filed by OP  it is admitted that MRP of the product was Rs.1 749/- inclusive of all taxes and after giving discount of 50%  the discounted price was Rs.874.50 N.P. It is admitted that CGST and SGST of Rs.43.76 N.P. was charged. Section 9 and Section 15 of Central GST Act  2017 provides for levying tax by Central Govt. and the State Govt. on sold goods. As per Section 15 of Central GST Act  2017  the value of supply of goods or services or both  shall be the transaction value which is the price actually paid or payable for said supply of goods or services or both  where supplier and the recipient of the supply are not related. Sales tax to be charged separately by the supplier. Further it is claimed that Section 15 (3) of Central GST Act provides that value of the supply shall not include any discount given before or at the time of its supply  if such discount has been duly recorded in the invoice issued in this respect of such supply. Even this value of supply shall not be included in the discount after the supply has been effected  if such discount is established in terms of agreement entered at or before the time of such supply and specifically linked to relevant invoices. Rather the tax credit attributable to the discount  on the basis of documents issued by the supplier has to be reversed by the recipient of the supply. So GST is charged as per law. No illegality in such charging committed by OP. Moreover the product in question was manufactured prior to implementation of GST Act  which came in force w.e.f. 01.07.2017. Price charged from the customer includes all taxes if it does not exceed MRP of the product sold. Final price charged from the customer did not exceed MRP and as such no unfair trade practice adopted by OP. Besides it is claimed that in view of involvement of complicated questions of law and facts  the matter cannot be decided in summary proceedings. GST @ 5% alleged to be rightly charged.

3.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith documents Ex.C-1 and Ex.C-2 and thereafter his counsel closed evidence. On the other hand  counsel for the OP tendered in evidence affidavit Ex.OP-1/1  of Shri Manoj Sharma authorised representative of the OP and thereafter closed evidence. 

4.             Written arguments not submitted by any of the parties. Oral arguments heard and records gone through.

5.             Admittedly MRP of the product was Rs.1 749/- inclusive of all taxes and the same is also mentioned in copy of the tag Ex.C-2. Admittedly discount @ 50% was offered and the discounted price was Rs.874.50 N.P. However  on this discounted price SGST of amount of Rs.21.86 N.P. and CGST of amount of Rs.21.86 N.P. has been charged  is a fact borne from copy of invoice Ex.C-1 dated 21.08.2017. So virtually GST of amount of Rs.43.72 N.P.has been charged on the discounted price  despite the fact that MRP was inclusive of all taxes. Practice of charging tax on the discounted price having MRP inclusive of all taxes has been deprecated by Hon ble National Consumer Disputes Redressal Commission  New Delhi  in case titled as M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma bearing Revision Petition No.3477 of 2016 decided on 04.01.2017 as well as in case bearing First Appeal No.136 of 2017 titled as M/s Aero Club Vs. Ravinder Singh Dhanju decided on 23.05.2017 by Hon ble State Consumer Disputes Redressal Commission  UT Chandigarh.  Ratio of both these cases fully applicable to the facts of the present case. So certainly OP adopted unfair trade practice in charging GST on the discounted price in this case  resulting in mental agony and harassment of complainant.

6.             It is vehemently contended by counsel for OP that after coming into force of provisions of Central GST Act  2017  the value of supply of goods or services or both to be taken as transaction value  which is the price actually paid or payable for the said supply of goods or services or both and as such GST has to be charged by the supplier from the recipient of goods/services. Even if the provisions of GST enjoins seller to collect GST from the purchaser of the goods  despite that the contract arrived at between consumer and supplier stands on different footings than that of provisions of CGST Act. Provisions of Consumer Protection Act are beneficial for the consumers and benefit of same cannot be denied to the consumer in the garb of any other provisions of law including CGST Act  2017. As OP himself through tag Ex.C 2 offered to sell the product on MRP inclusive of all taxes  and as such virtually the offer to pay tax on the product binds the supplier to pay tax on the discounted price because as and when the discount offer is given on MRP of a product  then offer has to be specific that the taxes will be charged extra. No such intimation of charging extra tax on the discounted price of the product having MRP inclusive of all taxes  ever given by OP to complainant or other customers and as such OP cannot wriggle out of his obligation of selling the product on discounted price inclusive of all taxes. No material in this case produced on record to establish that OP communicated to complainant or other consumer/customers that on the discounted price  GST will be charged extra  even if MRP is inclusive of all taxes of such product. When communication of such intention was never expressed by OP  then OP cannot shift his burden to pay GST on the consumers. So act of charging GST on the discounted price certainly is unfair trade practice as per law laid down in the above cited cases. Therefore  OP bound to refund this amount with interest @ 6% per annum from the date of purchase till payment. Complainant also entitled to reasonable amount of compensation for mental agony and harassment and to litigation expenses also.

7.             As a sequel of above discussion  the complaint allowed with direction to OP to refund excess charged amount of Rs.43.72 N.P. with interest @ 6% per annum w.e.f. 21.08.2017 till payment. Compensation for mental agony and harassment of Rs.2 000/  and litigation expenses of Rs.2 000/  more allowed in favour of complainant and against  OP.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order. Certified copies be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

May 25  2018.

                                                                (G.K. Dhir)

                                                                President

 

                                                      

(Amrinder Singh Sidhu)

Member

 

 

(Mrs. Natasha Chopra)

Member