Case Law Details
Once it has come on record that the MRP of the product includes all taxes, it was not open for the trader to impose VAT again on the discounted price.
Since the MRP includes the VAT, so one could easily understand that the VAT was already paid. One cannot reach at the conclusion that VAT extra was also to be given on 40% off price or 60% of the price.
Having seen the word “FLAT” in the advertisement, a consumer would be tempted to buy the goods under a bonafide belief that he would get a flat 40% off on the MRP. In our opinion, therefore, the defence of the Petitioners that they had charged VAT as per law is of no avail in so far as the issue at hand, viz. misleading advertisement, resulting in unfair trade practice, is concerned. We are in complete agreement with the Fora below that any discount falling short of “Flat 40%” on the MRP would amount to unfair trade practice, as defined in the Act.
Relevant Extract of the Judgment
4. On 26.01.2016, the Complainant purchased a ‘GMT Men Jacket’ from Petitioner’s The MRP shown on the sticker was ₹3,995/-. After deducing ₹1,598/- as discount @40% and adding to the discounted price, VAT @ 5%, amounting to ₹1 19.85, the Complainant was asked to pay ₹2,517/- as cost for the said Jacket. Since the amount, so demanded, resulted in a discount less than “Flat” 40% of the stated MRP, the Complainant protested. His complaint was rejected by the Petitioner on the ground that as per the terms and conditions (T & C) of the SALE, VAT had been charged extra as per the instructions of the parent company. Realizing that by advertising at large that the items in the store were being offered at a “FLAT” 40% discount, which in the final analysis was much less, the Consumers were being duped by the Petitioner by adopting such unfair trade practice, alleging deficiency in service on its part, the Complainant filed the Complaint before the District Forum. The Complainant had prayed for a direction to the Retailer to refund to him the aforesaid sum of ₹119.85, illegally charged as VAT, besides paying a further sum of ₹5,000/- towards mental agony and harassment.
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