The State Consumer Disputes Redressal Commission, Chennai, has ruled that a proposed seller, after receiving the entire cost for a product, fails to make delivery and raises a plea of non-payment of tax or any other unsustainable defence, then they are guilty of unfair trade practice under the Consumer Protection Act.
The judgment came in a case relating to the non-delivery of an automatic paper cup making machine.
As per court proceedings, Rafa M. Amala had ordered the machine from Manjulakshmi, Proprietrix, M/s. Maruthi Tech, Sivakasi, in 2011 at an agreed cost of ₹5.90 lakh. The buyer had paid the amount and alleged the seller had not delivered the product while the seller said the buyer had not paid the VAT and Service Tax.
Ms. Amala had moved the District Consumer Disputes Redressal Forum in Virudhunagar which ruled in her favour in 2015 and directed Ms. Manjulakshmi to refund the amount with an interest of 9% and also pay ₹20,000 as compensation, along with a legal cost of ₹5000 for deficiency of service.
Later, a Judicial Member of the Circuit Bench Madurai ruled in favour of the seller, setting aside the order of the District Consumer Disputes Redressal Forum while the non-Judicial Member upheld the order.
The matter was placed before Justice S. Tamilvanan, president, State Consumer Disputes Redressal Commission, Chennai, who ruled that the seller was adopting unfair methods. He noted that it was well settled that tax had to be collected only during the time of sale, which was at the time of product delivery.
The Commission upheld the order of the Virudhunagar forum with an added ₹20,000 as litigation cost. The entire amount should be paid within six weeks, failing which, the amount would carry an interest of 12% per annum, it said.
