Chandigarh

StateCommission

A/61/2016

Benetton India Private Ltd., - Complainant(s)

Versus

Ravinderjit Singh - Opp.Party(s)

Sorabh Sharma Adv.

18 Feb 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

 

Appeal No.	61 of 2016
Date of Institution	16.02.2016
Date of Decision	18.02.2016

 

Benetton India Private Ltd. (Also known as : UNITED COLORS OF BENETTON) Agent : Adi Sports (Elante Mall), 178-178A, Industrial Area, Phase I, Chandigarh – 160002, through its Manager.

 

                           …..Appellant/Opposite Party.

                           Versus

Ravinderjit Singh, r/o N-001, Parkwood Glade, Sector 116, Landran Kharar Road, Mohali – 140307.

 

.…..Respondent/Complainant.

BEFORE:    JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                SH. DEV RAJ, MEMBER

                MRS. PADMA PANDEY, MEMBER

 

Argued by:

 

Sh.Sorabh Sharma, Advocate for the appellant/Opposite Party.

                               

PER PADMA PANDEY, MEMBER

                This appeal is directed against an order dated 31.12.2015, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (in short ‘the Forum’ only), vide which, it allowed a complaint filed by the complainant (now respondent) and directed the Opposite Party (now appellant) as under :-

“12.     For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Party, and the same is allowed. The Opposite Party is directed:-

 

[a]  To refund excess charged VAT of Rs.69.98P to the Complainant  

 [b]  Pay Rs.10,000/- as compensation on account of deficiency in service and causing mental and physical harassment to the Complainant; 

                        [c] Pay Rs.7,500/- towards costs of                                  litigation;

13.      The above said order shall be complied within 30 days of its receipt by the Opposite Party; thereafter, it shall be liable for an interest @12% per annum on the amounts mentioned in sub-paras [a] & [b] above from the date of institution of this Complaint, till it is paid, apart from costs of litigation of Rs.7,500/-.”

2.           The facts, in brief, are that the complainant purchased a shirt from the Opposite Party under flat 50% sale offer and the MRP of the said shirt was Rs.2799/-which was inclusive of all taxes. It was stated that after giving 50% discount, the Opposite Party charged an amount of Rs.1399.50 from the complainant and also charged Rs.68.98 as VAT on Rs.1399.50, which was already inclusive of all taxes. It was further stated that the Opposite Party was deficient, in rendering service, as also, indulged into unfair trade practice.  When the grievance of the complainant was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (in short the “Act” only), was filed.

3.           In its written reply, the Opposite Party, admitted regarding the purchase of shirt from it and pleaded that as per terms and conditions of the offer, the percentage of discount was applicable only on the MRP (Maximum Retail Price) of the merchandise and VAT on the same was to be charged extra from the customer. As such, the same was charged on the discounted selling price of the merchandise sold i.e. at Rs.1399.50/- (50% of Rs.2799/-). It was further stated that the replying Opposite Party, was neither deficient, in rendering service nor indulged into unfair trade practice.       

4.           The complainant, filed rejoinder to the reply of the Opposite Party, wherein he reiterated all the averments, contained in the complaint, and refuted those, contained in the written version of the Opposite Party. 

5.           The parties led evidence, in support of their case.

6.           After hearing the complainant in person, Counsel for the Opposite Party, and, on going through the evidence and record of the case, the Forum, allowed the complaint, as stated above. 

7.           Feeling aggrieved, the instant appeal, has been filed by the appellant/Opposite Party.

8.           We have heard the Counsel for the appellant and have gone through the evidence and record of the case, carefully. 

9.           After giving our thoughtful consideration, to the evidence, on record, we are of the considered opinion, that the appeal is liable to be dismissed, at the preliminary stage, for the reasons to be recorded, hereinafter.

10.         The core question, that falls, for consideration, before us, is as to whether the Forum has rightly passed the impugned order. The answer, to this, question, is in the affirmative. According to the Counsel for the appellant/Opposite Party, the Forum failed to take into consideration that the appellant is an authorized agent, duly registered with the VAT authorities in accordance with the provisions of the VAT Act and is, therefore, entitled to collect VAT from the customers. He further submitted that the appellant was offering an end of season sale/discounted scheme (EOSS) to its customers and the VAT was charged at the discounted selling price i.e. the taxable value of the product in accordance with the terms and conditions of the EOSS. He further submitted that the Forum committed a grave error by not appreciating the fact that the VAT charged from the customers is deposited by the appellant with the tax authorities and it does not result in any financial gain to the appellant. Admittedly, the complainant purchased a shirt from the Opposite Party for a sum of Rs.2799/- and after giving 50% discount, the Opposite Party charged an amount of Rs.1469.48 (Rs.1399.50 (50% discount) + 69.98 VAT) from the complainant, which is clearly stipulated from the invoice (at page No.5 of the Forum file). It is also clear from the invoice/bill that MRP was Rs.2799/- (Inc of All Taxes). So, it is clear that when MRP is inclusive of all taxes, VAT/other taxes cannot be charged separately over and above MRP, meaning thereby that MRP includes VAT and after discount, no VAT can be charged. Therefore, on discounted product also, VAT cannot be charged if VAT is included in MRP. At the time of arguments, when the Bench asked the question from the Counsel for the appellant that under what terms and conditions, the VAT was charged by the appellant at the discounted price, rather it was clearly written on the tag that MRP is inclusive of all the taxes, he failed to put on record any terms and conditions under which it could be proved that VAT was rightly charged by the appellant. So, we are of the view that the Forum rightly held that if the Opposite Party offered discount of 50% for an article purchased by the complainant, then it is bound to sell the article(s) after discount. The Forum further rightly held that though Opposite Party had offered 50% discount on the article, in question, still it charged 5% extra VAT on discounted price inspite of specific mention on the tag that MRP is inclusive of all taxes. If it is clearly mentioned as MRP inclusive of all taxes, we are of the view that charging of 5% VAT or tax, is certainly against the trade practice. The Forum rightly relied upon the judgment earlier passed by this Commission in First Appeal No.210 of 2015, decided on 01.09.2015 titled as “Shoppers Stop and others Vs. Jashan Preet Singh Gill and others”, wherein, it was held that no one can charge more than the MRP and MRP includes all taxes including VAT/other taxes. When MRP is including all taxes then VAT/other taxes cannot be charged separately. Therefore, the order of the Forum, being legal and valid, is liable to be upheld.

11.            Keeping in view the facts and circumstances of the case, the Forum was right, in allowing the complaint against the Opposite Party, as stated above. Hence, the order passed by the Forum, being based on the correct appreciation of evidence and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.

12.            For the reasons recorded above, the appeal, filed by the appellant/Opposite Party, being devoid of merit, must fail, and the same is dismissed, at the preliminary stage, with no order as to costs. The order of the Forum is upheld.

13.         Certified Copies of this order be sent to the parties, free of charge.

14.         The file be consigned to Record Room, after completion.

Pronounced.

18.02.2016                                                                   

 [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

(DEV RAJ)

MEMBER

 

 

 (PADMA PANDEY)

        MEMBER