Punjab

SAS Nagar Mohali

CC/735/2017

Monika Babbar - Complainant(s)

Versus

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

Kulwinder Singh

25 May 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,
SAHIBZADA AJIT SINGH NAGAR (MOHALI)

Consumer Complaint No.724 of 2017
Date of institution: 11.09.2017
Date of decision : 25.05.2018

Kulwinder Singh son of Late Sh. Charanjit Singh, resident of K.No.86,
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: Complainant in person.

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 two Men’s Bermuda having MRP of Rs.895/- and Rs.705/-
respectively. Discount on the products was given and thereafter retail
invoice bill for amount of Rs.840/- including Rs.40/- 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

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was disclosed to complainant that in case GST not paid, then he will not
be allowed to buy the Men’s Bermuda. 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.40/- 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 products
was Rs.895/- and Rs.705/- inclusive of all taxes and after giving
discount of 50%, the total discounted price was Rs.800/-. It is admitted
that CGST and SGST of Rs.40/- 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

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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 products was Rs.895/- and Rs.705/-
inclusive of all taxes and the same is also mentioned in copy of the tags

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Ex.C-2. Admittedly discount @ 50% was offered and the discounted
price of the products was Rs.800/-. However, on this discounted price,
SGST of amount of Rs.20/- and CGST of amount of Rs.20/- 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.40/- 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

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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
tags 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

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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.40/- 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