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Shoppers Stop v. Jashan Preet Singh Gill
Summary of Opinion: State Consumer Disputes Redressal Commission, UT, Chandigarh — First Appeal No. 210 of 2015
Factual and Procedural Background
The complainant, Jashan Preet Singh Gill, was a holder of a "First Citizen" membership card issued by Opposite Parties No.1 to 3 (Shoppers Stop entities and a manager), for which Rs.300/- was charged. On 03.07.2014 the complainant purchased a pair of Red Tape shoes (model RTS6422C) whose MRP was shown as Rs.3,295/-. The complainant alleged that after a 40% discount the price should have been Rs.1,977/-, but the bill (Annexure C-6) recorded an amount charged of Rs.2,075/- in one place of the record and Rs.2,076/- in another place of the record, reflecting an additional charge identified as VAT; the complainant also produced evidence that the same product was available at a lower price at other outlets (Annexures C-7 and C-8).
The complainant filed a consumer complaint under the Consumer Protection Act, 1986 against Opposite Parties No.1 to 3 (and proforma respondents No.4 and 5). Opposite Parties No.4 and 5 did not appear and were proceeded against ex parte. The District Consumer Disputes Redressal Forum-I, UT, Chandigarh partly allowed the complaint and directed Opposite Parties No.1 to 3, jointly and severally, to: (a) pay Rs.10,000/- as compensation for deficiency in service and causing mental and physical harassment; and (b) pay Rs.7,000/- towards litigation costs. The Forum ordered compliance within 30 days and provided that thereafter interest at 12% p.a. would apply to the amount in sub-para (a) from the date of institution of the complaint until paid, in addition to the costs awarded.
Opposite Parties No.1 to 3 (Shoppers Stop entities) filed the present first appeal challenging the District Forum's order. The Commission heard preliminary submissions and reviewed the record and evidence before dismissing the appeal at the preliminary stage and upholding the District Forum's order.
Legal Issues Presented
- Whether, after giving a discount, the seller (appellants/Opposite Parties No.1 to 3) can charge VAT (or any tax) in addition to the discounted price when the MRP tag indicates the MRP is inclusive of all taxes.
Arguments of the Parties
Appellants' (Opposite Parties No.1 to 3) Arguments
- The appellants submitted that VAT is an indirect tax payable to the Government exchequer and not retained by the appellants.
- They contended that the complainant was aware, or there was notice in the store, that VAT would be charged extra on discounted items.
- They maintained that VAT was rightly calculated and charged on the sale of the item, and that they took due care to ensure that the final retail price (discounted price plus VAT) did not exceed the MRP shown on the product, in compliance with provisions of Legal Metrology.
- They denied any deficiency in service or engagement in unfair trade practice and therefore sought setting aside of the District Forum's order.
Complainant's Arguments
- The complainant asserted that after a flat 40% discount the price should have been Rs.1,977/-, but the bill showed an amount around Rs.2,075–2,076, indicating that VAT was charged extra without proper disclosure.
- He alleged that the same product was available at a lower price at other outlets (supported by Annexures C-7 and C-8).
- The complainant contended that commodities must be sold on the MRP and, if a discount is offered, there should be no hidden charges; he accused the Opposite Parties of deficiency in service and unfair trade practice for separately charging VAT when the MRP tag indicated taxes were included.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Commission's analysis proceeded as follows, reflecting the evidence and findings recorded in the opinion:
- Documentary evidence was examined: Annexure C-5 (price tag) showed the MRP of the shoes as Rs.3,295/-. Annexure C-6 (the bill dated 03.07.2014) was relied upon to establish the transaction and the amount charged to the complainant; parts of the record reference Rs.2,075/- and elsewhere Rs.2,076/- as the amount charged after discount, while the complainant calculated that after 40% discount the price should have been Rs.1,977/-. The Commission noted these evidentiary facts from the record.
- The appellants argued VAT was properly calculated and deposited with taxation authorities and that the final price (discount + VAT) did not exceed the MRP. The Commission considered that contention.
- The Commission observed that the complainant had purchased the same item from another outlet of the same company at the same flat 40% discount without a separately charged VAT, and that the bill from that outlet indicated the VAT element was included within the discounted price.
- The Commission scrutinized the bill produced by the appellants and found that the typed copy of the bill did not mention the charging of VAT nor specify the percentage of VAT charged. The Commission emphasized the shopkeeper's duty to mention every detail in the bill (price, percentage of discount, and other taxes when charged), and noted that the appellants' bill lacked any mention of VAT.
- The Commission further relied on the fact that the price tag indicated MRP inclusive of all taxes. Given that MRP was shown as inclusive of taxes, the Commission concluded that charging an additional 5% VAT (or any separate tax) on top of the discounted price was contrary to accepted trade practice when MRP is represented as inclusive of taxes.
- On that basis, the Commission found no force in the appellants' contention and agreed with the District Forum's conclusion that one cannot charge more than the MRP and that MRP includes all taxes; therefore VAT/other taxes could not be charged separately when MRP is inclusive of taxes.
- Having found the District Forum's assessment of evidence and law correct on the point, the Commission concluded the District Forum's order was legal and valid and did not suffer from illegality or perversity warranting interference.
Holding and Implications
Core Holding: The appeal is dismissed and the order of the District Consumer Forum is upheld.
Direct implications for the parties (as ordered by the District Forum and upheld by the Commission):
- Opposite Parties No.1 to 3 are directed, jointly and severally, to pay Rs.10,000/- as compensation for deficiency in service and causing mental and physical harassment to the complainant (sub-para [a]).
- Opposite Parties No.1 to 3 are directed to pay Rs.7,000/- towards the costs of litigation (sub-para [b]).
- The orders were to be complied with within 30 days of receipt; thereafter Opposite Parties No.1 to 3 would be liable to pay interest at 12% per annum on the amount mentioned in sub-para [a] (Rs.10,000/-) from the date of institution of the complaint until payment, in addition to the costs awarded.
- The appeal was dismissed at the preliminary stage and no order as to costs was made by the Commission in respect of the appeal.
Broader legal implication noted by the Commission:
The opinion affirms the principle applied in this dispute that when an MRP tag expressly states that the MRP is inclusive of all taxes, a seller cannot separately charge VAT (or other taxes) on top of a discounted price such that the buyer is made to pay more than the MRP; the Commission treated this as an application of trade practice and Legal Metrology considerations in the particular factual context. The decision in this matter was limited to the facts on record and the Commission did not record the creation of a new precedent beyond upholding the District Forum's legal and factual conclusions.
Administrative notes from the order:
- Certified copies of the Commission's order were to be sent to the parties free of charge.
- The file was directed to be consigned to the Record Room after completion.
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UNION TERRITORY, CHANDIGARH First Appeal No. 210 of 2015 Date of Institution 31.08.2015 Date of Decision 01.09.2015
1. Shoppers Stop through its Chief Executive Officer, Shoppers Stop Eureka Towers, 9th Floor, B-Wing, Mindspace, Link Road Malad (W), Mumbai 400064.
2. Shoppers Stop through its Chief Branch Manager, Plot No. 178-178A, Elante Mall, Industrial Area, Phase-I, Chandigarh.
3. Mr. Manish, Manager, Plot No. 178-178A, Elante Mall, Industrial Area, Phase-I, Chandigarh. .Appellants/Opposite Parties No.1 to 3. Versus Jashan Preet Singh Gill son of Late S. Lachhman Singh, resident of House No.880, Sector 70, Mohali. .Respondent No.1/Complainant Red Tape through its General Manager at Registered and Head Office: 14/6, Civil Lines, Kanpur-208001.
1. Red Tape through its Manager, Mirza International Limited, Corporate & Marketing Office: A-7, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi 110076. .Proforma Respondents/Opposite Parties No.4 and 5. BEFORE: SH. DEV RAJ, PRESIDING MEMBER MRS. PADMA PANDEY, MEMBER Argued by: Sh.Pankaj Jain, Advocate for the appellants. PER PADMA PANDEY, MEMBER This appeal is directed against the order dated 27.07.2015, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only), vide which, it partly allowed the Consumer Complaint bearing No.721 of 2014, filed by the complainant, against Opposite Parties No.1 to 3 only, with the following directions:-
13. For the reasons recorded above, the present complaint of the Complainant deserves to succeed against the Opposite Parties No.1 to 3, and the same is partly allowed. The Opposite Parties No.1 to 3 are directed, jointly and severally, to:-
[a] Pay Rs.10,000/- as compensation on account of deficiency in service and causing mental and physical harassment to the Complainant;
[b] Pay Rs.7,000/- towards costs of litigation;
14. The above said order shall be complied within 30 days of its receipt by the Opposite Parties No. 1 to 3; thereafter, they shall be liable for an interest @12% per annum on the amount mentioned in sub-para [a] above from the date of institution of this Complaint, till it is paid, apart from costs of litigation of Rs.7,000/-.
2. The facts, in brief, are that the complainant got enrolled himself as a First Citizen Member of Opposite Parties No.1 to 3 and for the said membership card, they (Opposite Parties No.1 to 3) charged an amount of Rs.300/- for availing various special schemes, discounts and season sales etc. Copies of the First Citizen Card and computer generated receipt of Rs.300/- are Annexure C-1 and C-2. It was stated that on 03.07.2014, during a sale at the store of Opposite Parties No.1 to 3, the complainant purchased a pair of Red Tape shoes (Model No.RTS6422C), the MRP of which was Rs.3295/- and after giving flat 40% discount on the MRP, the value of the shoes had to be Rs.1977/- but he (complainant) was shocked to see the bill, where, he was charged Rs.2075/- instead of Rs.1977/-vide bill Annexure C-6, wherein, there was no mention about the tax/extra charges, which were being imposed. It was further stated that the same product, which the complainant purchased, was available on a lesser price in the other shops and stores (Annexure C-7 and C-8). It was further stated that the commodities have to be sold on the MRP and, if any discount offered, then there should be no hidden charges. It was further stated that the Opposite Parties were 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 the Consumer Protection Act, 1986 (hereinafter to be called as the Act" only), was filed.
3. Notice of the complaint was sent to the Opposite Parties but despite service, none appeared on behalf of Opposite Parties No.4 and 5, as such, they were proceeded against exparte vide order dated 18.12.2014.
4. In their written statement, Opposite Parties No.1 to 3, admitted regarding the First Citizen membership of the complainant and for availing the services, he paid an amount of Rs.300/-. It was admitted that the pair of Red Tape Shoes bought by the complainant had an MRP of Rs.3295/- and were offered for sale on 40% discount. It was stated that the complainant was charged Rs.1977/- (price of the shoes after discount) plus VAT, hence totaling to Rs.2075/-. It was further stated that VAT was calculated and charged on final sale amount, and as per the provisions of Legal Metrology the product should not be sold on price more than MRP. It was further stated that while selling on discount, all due care was taken that final retail price after discount and the VAT together should not be more than MRP (Maximum Retail Price), indicated on the product and appropriate discount provided to the customer. It was further stated that the bill issued by the replying Opposite Parties clearly depicted about the price of the goods and the taxes levied thereon. It was further stated that there were no hidden charges, as alleged, and the amount of VAT charged, deposited with the respective Taxation Authorities and hence not gone into the pockets of Opposite Parties No.1 to 3. It was further stated that the replying Opposite Parties were neither deficient, in rendering service nor indulged into unfair trade practice.
5. The complainant, filed replication to the written reply of Opposite Parties No.1 to 3, wherein he reiterated all the averments, contained in the complaint, and refuted those, contained in the written version of Opposite Parties No.1 to 3.
6. The parties led evidence, in support of their case.
7. After hearing the complainant in person and the Counsel for Opposite Parties No.1 to 3, and, on going through the evidence, and record of the case, the District Forum, partly allowed the complaint, as stated above.
8. Feeling aggrieved, the instant appeal, has been filed by the appellants/Opposite Parties No.1 to 3.
9. We have heard the Counsel for the appellants/Opposite Parties No.1 to 3, at the preliminary stage, and have gone through the evidence and record of the case, carefully.
10. The Counsel for the appellants/Opposite Parties No.1 to 3, submitted that the District Forum failed to appreciate that VAT is an indirect tax levied on sale of goods and services and the same is paid to the Government exchequer and is not pocketed by the appellants. He further submitted that it is not the case of the consumer that he was not aware or that there was no notice in the store regarding VAT to be paid extra. He further submitted that on each and every product, which was offered for sale alongwith discount, it was specifically put to notice that VAT should be extra. He further submitted that there was no deficiency, in service, on the part of the appellants and prayed for setting aside the impugned order and allowing the appeal.
11. After giving our thoughtful consideration, to the submissions, raised by the Counsel for the appellants, and 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.
12. The core question, that falls for consideration, is, as to whether, after giving discount, VAT extra can be charged by the appellants from the complainant. The answer, to this question, is in the negative. It is an admitted fact the complainant is the holder of First Citizen membership card, for which, Opposite Parties No.1 to 3 charged an amount of Rs.300/- (Annexure C-1 and C-2). Annexure C-5 is a copy of the price tag. From this document, it is proved that MRP (Maximum Retail Price) of the Red Tape shoes, model No.RTS6422C was Rs.3295/-. Annexure C-6 is a copy of the bill dated 03.07.2014. From this document, it is proved that the complainant purchased Red Tape shoes from Opposite Parties No.1 to 3 on 03.07.2014, the original price of the said shoes was mentioned as Rs.3295/- and after giving discount, they (Opposite Parties No.1 to 3) charged an amount of Rs.2076/- for the said shoes. According to the complainant, the MRP of the shoes was Rs.3295/- and after giving 40% flat off, the value of the shoes had to be Rs.1977/- but Opposite Parties No.1 to 3 charged an amount of Rs.2076/- instead of Rs.1977/- and, as such, they charged VAT extra. The complainant further stated in his complaint that the same product, which he purchased, was available at a lesser price in the other shops and stores (Annexure C-7 and C-8). On the other hand, as per the appellants/Opposite Parties No.1 to 3, VAT was rightly calculated and charged by them on the sale of the item because as per the provisions of Legal Metrology, they have not sold the product on the price more than the MRP and taken a due care that the final retail price, after discount and VAT together should not be more than MRP, indicated on the product. As per the appellants/Opposite Parties No.1 to 3, the amount of VAT charged deposited with the Taxation Authorities and hence, not gone into their pockets. We find no force in the contention of the appellants/Opposite Parties No.1 to 3 because the complainant purchased another item from other outlet of the same Company red tape where the product on the same discounted price of 40%, was offered and the said Company did not charge additional amount of VAT and the bill clearly showed that the element of VAT included in the MRP discounted price, as well. A bare perusal of the typed copy of bill (at page No.23 of the District Forum file) clearly shows that there was nowhere mentioned regarding the charging of VAT and what percentage of VAT was charged. It is the duty of the shopkeeper to mention every detail in the bill regarding the price of the item/product, percentage of discount and other taxes, when charged but not even a single word regarding charging of VAT was mentioned in the bill by Opposite Parties No.1 to 3. Opposite Parties No.1 to 3 had offered 40% discount on the article, in question, still they charged 5% extra VAT on discounted price, inspite of specific mention on the tag MRP inclusive of all taxes and when once it was mentioned as MRP inclusive of all taxes, charging of 5% VAT or tax, certainly was against the trade practice. So, we are of the considered opinion that the District Forum rightly 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 District Forum, being legal and valid, is liable to be upheld.
13. Keeping in view the facts and circumstances of the case, the District Forum was right, in partly allowing the complaint against Opposite Parties No.1 to 3, as stated above. Hence, the order passed by the District 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.
14. For the reasons recorded above, the appeal, filed by the appellants/Opposite Parties No.1 to 3, 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 District Forum is upheld.
15. Certified Copies of this order be sent to the parties, free of charge.
16. The file, be consigned to Record Room, after completion. Pronounced. 01.09.2015 Sd/- (DEV RAJ) PRESIDING MEMBER Sd/- (PADMA PANDEY) MEMBER
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