M/s College Shoes, Woodland Shoes V/S Kulwinder Singh - Consumer Court Case

Chandigarh

DF-I

CC/180/2016

Kulwinder Singh - Complainant(s)

Versus

M/s College Shoes, Woodland Shoes - Opp.Party(s)

Gaurav Bhardwaj

20 Sep 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

[1]

Consumer Complaint No.	:	CC/180/2016
Date of Institution	:	15/03/2016
Date of Decision	:	20/09/2016

Kulwinder Singh s/o Lt. Sh. Charanjit Singh r/o K.No.86, Phase 6, SAS Nagar (Mohali.)

…..Complainant

V E R S U S

M/s College Shoes, Woodland Shoes, SCO No.30, Sector 17E, Chandigarh through its Proprietor/Incharge/Manager.

……Opposite Party

[2]

Consumer Complaint No.	:	CC/188/2016
Date of Institution	:	16/03/2016
Date of Decision	:	20/09/2016

Sanjeev Gupta s/o Sh. Ramesh Chander Gupta, Resident of H.No.617, Sector 2, District Panchkula, Haryana.

…..Complainant

V E R S U S

1. Aero Club (Woodland Store), SCO – 803, Kalka Highway, Manimajra, Chandigarh (UT), India, through its Manager.

2. Aero Club (Woodland Store), SCO – 803, Kalka Highway, Manimajra, Chandigarh (UT), India through its Proprietor.

3. Aero Club, Marketing Office at 2168, Gurduwara Road, Karol Bagh, New Delhi – 5, India through its Managing Director/Chairman.

4. Aero Club, 2168, Marketing Office, Gurduwara Road, Karol Bagh, New Delhi – 5, India through its Manager.

5. Woodland India Office, Operating as Aero Club, #2168, Gurduwara Road, Opposite Post Office, New Delhi – 110005, India through its Managing Director/Chairman.

……Opposite Parties

[3]

Consumer Complaint No.	:	CC/200/2016
Date of Institution	:	22/03/2016
Date of Decision	:	20/09/2016

Sh. Raghav Goel s/o Sh. Rajeev Goel r/o #3296, Sector 15-D, Chandigarh.

…..Complainant

V E R S U S

M/s College Shoes, Woodland Store, SCO No.30, Sector 17E, Chandigarh through its Proprietor/Authorised Signatory.

……Opposite Party

[4]

Consumer Complaint No.	:	CC/288/2016
Date of Institution	:	28/04/2016
Date of Decision	:	20/09/2016

Kapil Kundu, House No.2740-B, Sector 42-C, Chandigarh

…..Complainant

V E R S U S

M/s College Shoes (Woodland Store), SCO No.30, Sector 17, Chandigarh through its Manager.

……Opposite Party

[5]

Consumer Complaint No.	:	CC/332/2016
Date of Institution	:	10/05/2016
Date of Decision	:	20/09/2016

Iqbal Singh s/o Bachan Singh r/o H.No.815, Sector 16D, Chandigarh.

…..Complainant

V E R S U S

Woodland, Chandigarh DLF City Centre, Shop No.19, Ground Floor, DLF City Centre, DT Mall, IT Park, Chandigarh, through Managing Director.

……Opposite Party

QUORUM:	DR. MANJIT SINGH	PRESIDENT
	MRS.SURJEET KAUR	MEMBER
	SURESH KUMAR SARDANA	MEMBER

ARGUED BY

Sh. Gaurav Bhardwaj, Counsel for complainant (in CC/180/2016)

Sh. Amit Gupta, Counsel for complainant (in CC/188/2016)

Complainant in person (in CC No.200/2016)

None for complainant (in CC/288/2016)

Sh. Simranjeet Singh, Counsel for complainant (in CC/332/2016)

Sh. Rajesh Mahna, Counsel for OP

PER DR. MANJIT SINGH, PRESIDENT

All the consumer complaints, captioned above, involve identical questions of fact and law, as such, the same are being disposed of by this common order.
The facts, for convenience, have been taken from consumer complaint No.180 of 2016-Kulwinder Singh Vs. M/s College Shoes.
Put in brief, the facts of the case are that on 31.10.2015, the complainant visited the outlet of the OP. In order to promote the sale of their products, the OP had offered flat 50% discount on MRP. The complainant purchased a leather jacket from the OP which was having MRP of Rs.14,995/-. The OP demanded an amount of Rs.8,435/- which included Rs.937.22 as VAT @ 12.5%. The complainant raised objection relating to charging of extra VAT as the cost of the jacket was inclusive of all taxes and VAT had already been added to the said cost, but, the officials/employees of the OP did not agree. The complainant has alleged that the OP has adopted unfair trade practice by charging extra VAT from him. Hence, the complainant has brought this complaint with a direction for directing the OP to refund the extra amount of Rs.937.22 with interest, pay Rs.70,000/- towards harassment, mental agony and unfair trade practice and Rs.10,000/- as litigation costs.
The OP resisted the complaint by filing its written reply, inter alia, taking the preliminary objections that the complaint cannot be entertained as the complainant failed to understand the discount duly displayed at the showroom in relation to the charging of the appropriate VAT as extra which was the output liability of the OP on account of the sale of the goods at the discount rates and the same stands deposited with Govt.; that the complaint has been filed with a motive to extract money out of the OP. The complainant failed to understand that the discount on MRP was subject to payment of VAT; MRP under the provisions of standard Weight & Measurement Act is a controlling factor so that the seller does not charge anything or price more than mentioned or displayed. Discount on MRP is only a methodology of calculation of price on which VAT as applicable will be charged at the time of sale. On merits it is admitted that the OP offered discount of 50% of the price, but, the same was subject to payment of VAT on such sales and complainant was notified and displayed the cost of leather jacket is Rs.14,995/- (MRP) but after discount the same was sold at the discount and charged VAT as payable on values of the goods. Hence, the OP prayed for dismissal of the complaint.
Rejoinder was filed by the complainant denying all the averments in the written statement of the OP.
The parties led evidence in support of their contentions.
We have gone through the record, including the written submissions/arguments, and heard the arguments addressed by the learned Counsel for the parties.
Annexure C-1 clearly proves that the complainant purchased one Black S Jacket (Leather). The MRP of the said jacket was Rs.14,995/-. The OP gave discount of 50% to the tune of Rs.7,497/- and on the balance amount VAT of Rs.937.22 @ 12.5% was charged from the complainant. Thus, the total amount charged from the complainant including VAT was Rs.8,435/-. Similar is the position in the other consumer complaints mentioned above.
The learned counsel for the complainant argued that the OP has charged the VAT extra particularly when in the MRP VAT was already included and this amounts to unfair trade practice adopted by the OP.
The learned counsel for the OP, on the other hand, argued that the complainant has not impleaded the Commissioner Value Added Tax (Commercial Taxes) as a party who was a necessary party. He further argued that on this sole ground the complaint is liable to be dismissed. The learned counsel for the OP further argued that in case of sale, MRP loses its significance as the items are sold not on the MRP, but, on the lesser price after giving the discount. He argued that the OP after recovering the VAT on the sale price deposited the same with the concerned department and the complainant has no cause of action. The learned counsel has relied upon the Punjab Value Added Tax, 2005 wherein the definition of sale price has been mentioned as under :-

“(zg) “sale price” means the amount of valuable consideration received or receivable by a person for any sale made including any sum charged on account of freight, storage, demurrage, insurance and any sum charged for anything done by the person in respect of the goods at the time of or before the delivery thereof.”

Reliance has also been placed on the judgment of Hon’ble Karnataka State Commission G.N. Shivakumar Vs. Municipal Commissioner, City Municipal Corporation, Mysore, 1992 (1) CPR 495 where it was held that no doubt the motor vehicle tax has been held to be a compensatory tax levied by the Govt. for the user of roads. But that by itself will not make it a fee for the maintenance of any road. It is a compulsory levy on all owners of motor vehicles and the receipts go into the general revenue of the State Government. It was also held that taxes which on a compulsory levy under the authority of law cannot be consideration for a particular service, as consideration to be valid must be out of ones own free will. Reliance has also been placed on the judgment of the Hon’ble National Commission Signet Corporation Vs. Commissioner, M.C.D. New Delhi and Ors., Revision Petition Nos.704 and 704A of 1995 decided on 19.5.1997 wherein it was held that there was no arrangement of hiring of service for consideration as between the complainant and the Municipal Corporation of Delhi in regard to maintenance of public drains passing in front of the petitioner’s premises.

In the present case, as mentioned above, MRP of the jacket was Rs.14,995/-. 50% discount to the tune of Rs.7,497/-was offered to the complainant. On the balance price of Rs.7,497.78, VAT @ 12.5% i.e. Rs.937.22 was charged by the OP and after adding the same a total amount of Rs.8,435/- was charged from the complainant. It is important to note that the balance amount of Rs.7,497/- already included the 50% of the VAT. Thus, the OP had no right to charge the VAT again on the balance amount which already included the VAT. By charging the VAT again after giving discount, the complainant was kept in dark by the OP as the OP charged the VAT twice which amounts to unfair trade practice.
There is no dispute regarding the definition of sale price or the sale given in the Punjab Value Added Tax Act, 2005, but, since the OP has charged the VAT twice, so it cannot be said that the VAT has been charged on the sale price only. The judgments referred by the learned counsel for the OP are not applicable to the facts and circumstances of the present case because in those judgments there was no dispute regarding the charging of VAT. The argument of the learned counsel for the OP that the Commissioner, Value Added Tax is a necessary party is also devoid of merit because the complainant has no dispute with regard to the deposit of VAT received by the OP. The dispute is only with regard to the charging of VAT twice and in this dispute the Commissioner Value Added Tax is not a necessary party.
In all the consumer complaints captioned above, the VAT has been charged by the OP from the complainant. No doubt it is argued by the OP that VAT is to be deposited by it, but, the VAT was to be deposited on the price of the product that could be charged. The OP cannot be allowed to collect the VAT on the price of the product twice and say that it has to deposit the VAT. It was the duty of the OP to clearly state to the complainant or display on the product or in the shop as under :-
1. Maximum retail price, including VAT
2. Price of the product, excluding VAT
3. Percentage of discount
4. Price after discount excluding VAT
5. VAT to be charged; and
6. The total amount to be charged.

Otherwise also, merely mentioning that VAT was to be charged extra amounts to keeping the customers in dark and putting itself in a beneficial position to charge VAT twice. So, it is proved that a sum of Rs.937.22 has been charged extra by the OP from the complainant which amounts to unfair trade practice. The complainant has to approach the Forum, and face harassment and mental agony. Hence, the complainant besides the refund of the amount of extra VAT charged is also entitled to the amount of compensation.

Now coming to the compensation, the same is to be awarded taking into consideration the facts of each case, the harassment suffered by the complainant as well as mental agony faced by him. In the present case, the complainant has only to pay the extra VAT because of the act and conduct of the OP, but, no financial loss or hardship has been suffered by the complainant. So, taking into consideration the fact that only VAT has been charged twice, adequate compensation is to be awarded.
Taking into consideration all the facts and circumstances narrated above, we have no hesitation to hold that there is deficiency in service on the part of the OP. Hence, all the consumer complaints deserve to succeed. The same are accordingly partly allowed. The OP/OPs is/are directed as under:-

CC/180/2016-Kulwinder Singh Vs. M/s College Shoes

(i) To refund the amount of Rs.937.22 (say Rs.938/-) to the complainant alongwith interest @ 9% per annum from the date of filing of this complaint, till realization.