Chandigarh

DF-II

CC/65/2017

Mrs. Sarita Kumari - Complainant(s)

Versus

Adidas India Marketing Private Limited - Opp.Party(s)

Sahil Dawar Adv.

30 Jun 2017

ORDER

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

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Consumer Complaint  No	:	65 of 2017
Date  of  Institution	:	18.01.2017
Date   of   Decision	:	30.06.2017

 

 

 

 

Sarita Kumari r/o House No.1263, First Floor, Sector 34-C, Chandigarh.  

             …..Complainant

Versus

1]  Adidas India Marketing Private Limited, through its Managing Director/Authorised Signatory, having its Office at 5^th Floor, Unitech Commercial Tower-II, Sector 45, Block-B, Greenwoods City, Gurgaon, Haryana.

2]  Adi Sports (India) Pvt. Ltd., through its Managing Director/Authorised Signatory, having its Office at Plot No.92, Extended Lal Dora, Abadi Village Kapashera, Delhi, Delhi 110037

….. Opposite Parties  

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         MRS.PRITI MALHOTRA             MEMBER

 

 

For complainant(s)      : Sh.Sahil Dawar, Advocate  

 

For Opposite Party(s)   : Sh.Manoj Lakhotia, Advocate

 

 

PER PRITI MALHOTRA, MEMBER

 

 

          As per the case, the complainant in response to the ‘Seasonal Sale’ of Adi Sports offering flat 40% discount on maximum retail price, purchased Team bag with MRP of Rs.2999/-.  However, when the article was delivered to her, she was charged Rs.2024/-.  It is averred that the maximum retail price of the said article/product was Rs.2999/-, which was  inclusive of all taxes (Vat also) and after 40% discount on Rs.2999/- i.e. Rs.1200/-, the amount/cost payable to the OPs by the complainant for the said product was Rs.1799/- but the OPs charged Rs.2024/- which included illegal charge of extra Vat of Rs.225/-, which is arbitrary and unsustainable. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint.

 

2]       The Opposite Party No.1 has filed reply stating that the complainant has neither purchased any goods from the answering Opposite Party nor hired any services for consideration or otherwise from the answering Opposite Party, therefore, the complaint deserves to be dismissed.  It is submitted that the goods in question were not sold at the MRP, rather on the discounted price, and the VAT was rightly levied as per the provisions of the Vat Tax Act of Punjab & Haryana, 2003 per which the Vat is levied on the sale price and the sale price means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed at the time of sale as cash or trade discount according to the practice, normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof.  It is also submitted that at no point of time, it was declared by the OP No.2 that a flat rate of discount will be given on the MRP of the product.  It is further submitted that it is the selling price on which the Vat Tax is to be calculated.  It is stated that the Opposite Party NO.2 has clearly displayed in the terms that Vat would be charged extra over the discounted sale price and thus, in no way, it can be gathered that the charging 12.5% VAT is arbitrary.  Pleading no deficiency in service and denying rest of the allegations, the complainant has prayed for dismissal of the complaint. 

         The Opposite Party No.2 in its reply while admitting the factual matrix of the case, took the same plea as taken by Opposite Party NO.1, hence needs not to be repeated.

 

3]       Parties led evidence in support of their contentions.

 

4]       We have heard the ld.Counsel for the parties and have also perused the entire record.

 

5]       The ld. Counsel for the complainant at the time of arguments submitted that the complainant on 24.12.2016 purchased one Team bag from Opposite Parties, who offered 40%  discount on MRP of Rs.2999/-. It is alleged that the Opposite Parties issued retail invoice for an amount of Rs.2024/- whereby the Opposite Parties illegally charged extra VAT to the tune of Rs.225/- whereas the cost of the product mentioned on the tag is inclusive of all taxes.  The counsel for the complainant further claimed that as the VAT has already been added to the said cost of the product, so the complainant cannot be charged extra tax by doing so. Submitted that the Opposite party had not only indulged into unfair trade practice but also rendered deficient service to the complainant.

 

6]       On the contrary, the OPs have completely denied the allegations of the complainant and submitted that it has rightly charged the tax and under VAT Act and deposited the same with the VAT department.

 

7]       In this backdrop, the core question which survives for determination is whether VAT can be charged on the discounted price when MRP of a product is inclusive all taxes and added in bill?

 

8]       It has been contended by the Opposite Party that it had clearly told the complainant before the purchase that VAT would be charged extra over the discounted sale price, therefore, no unfair trade practice can be attributable on its part. The Opposite Parties have miserably failed to produce on record any cogent, convincing and reliable piece of evidence in the shape of any rules/instructions authorizing them to levy/charge the amount of VAT on the product/item sold at discounted price which carried the price tag displaying the maximum retail price of the product/item in question, as inclusive of all taxes. Instead of placing on record copy of any rules/regulations/laws/bye-laws to justify the charging of VAT on the product/item sold at discounted price the Opposite Party tried to shift the burden on the complainant by asking the complainant to show how she is liable to pay VAT. In our opinion the complainant is liable to explain her position only when it is proved that charging of VAT on the disputed price of the product carrying price tag of maximum retail price inclusive of all taxes is genuine and protected under any of the rules/regulations/ notification of the department concerned.

        

9]       The claim of the Opposite Party that it has not charged anything above MRP of the product  and sold the product on discounted price and thus can impose VAT is not tenable in the eyes of law. As the discount so offered by the OP is part and parcel of their promotional policy offering hefty discounts in order to attract/allure the gullible customers; who approach them under the misleading belief of getting hefty discounts declared by them which comes out to be an illusion when they are forced to pay a good amount of VAT illegally imposed on the discounted price.  We are of the opinion that the discount so offered by the OP is offered from their own margins as per their own choice and are not pressurized to do so and ones it is mentioned in the price tag of any item/product 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. 

 

10]      In our opinion, there is a 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. It is not the case of the Opposite Party that it charged VAT on the actual price of the item in question. 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.

   

11]      Though Opposite Party had offered 40% discount on the article in question, still they charged extra VAT on discounted price in spite of the specific mention of the maximum retail price inclusive of all taxes, as is evident vide Annexure C-1. Since it is an offence to sell at a price higher than the marked price, so it is also not legal to charge any tax on the product/item carrying tag of maximum retail price inclusive of all taxes.     

 

12]      In these set of circumstances, we are of the concerted view that the customer/complainant is liable to pay extra amount of the VAT imposed by the Opposite Party only if the article is labelled as MRP “exclusive of all taxes”.  But it is quite clear vide Annexure C-1 that MRP of the product/item in question is ‘inclusive of all taxes’, so the charging of extra VAT is clearly unfair trade practice resorted to by the Opposite Parties. Thus the Opposite Parties are liable to compensate the complainant for their deficient act and for their indulgence into unfair trade practice.

 

13]      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. A similar question arose for determination before our 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 where MRP includes all taxes including VAT/other taxes.

 

14]      The ratio of the afore-cited 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 having indulged into unfair trade practice on their part, which certainly had caused immense mental and physical harassment to the Complainant. 

 

15]      For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Parties not only for resorting to unfair trade practice but also for the deficiency in service towards the complainant and the same is accordingly allowed. The Opposite Party is directed as under:-

 

a]  To refund Rs.225/- i.e. the amount charged extra VAT on the discounted product having MRP inclusive of all taxes.  

 

b]  To pay a consolidated amount of Rs.2000/- to the complainant towards compensation as well as litigation cost, on account of unfair trade practice and deficiency in service on the part of OPs;

 

         This order shall be complied with by the Opposite parties within a period of 30 days from the date of receipt of its copy, failing which they shall be liable to pay interest @9% per annum on amount as mentioned at sub-para (a) & (b) above from the date of this order till it is paid.

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

Announced

30^th June, 2017                                                                                                                                                                      Sd/-

 (RAJAN DEWAN)

PRESIDENT

 

         

Sd/-

          (PRITI MALHOTRA)

MEMBER