G.C. MATHUR vs ALL INDIA ORGN OF CHEMISTS & DRUGGISTS (AIOCD) & ORS

Shri G.C. Mathur, Convener-Trustee Treasurer, Binty (a voluntary consumer association) has filed the instant consumer complaint against eight opposite parties, namely, Shri Dilip A. Mehta, President, All India Organization of Chemists & Druggists, (AIOCD), Shri Sandeep Nangia, Vice President of AIOCD and President of Retailers & Distributors Chemists Association of NCT of Delhi, the individual chemists, namely, M/s Gulati Medicos, M/s B.L. & Co. (Regd.) Chemists, M/s All India Medicos, M/s Gera Medical Store, Gurgaon and Shri Rahul Khullar, the then Commissioner, Sales Tax, Government of NCT of Delhi and Dr. L.L. Aggarwal, the then Controller of Drugs, Government of NCT of Delhi.

After the filing, the complainant has amended the complaint thrice. The facts culled out from the last amended complaint are that the complainant claims himself to be a consumer activist being Convener-Trustee Treasurer of Binty (a voluntary consumer organization) registered as a trust. It is alleged that opposite parties No. 3 to 6 are engaged in the business of selling medicines and they have been made party to the case as sample representatives of the chemists throughout the country. According to the complainant the chemists throughout the country are over charging the customers, over and above the maximum retail price (MRP) in the garb of "local taxes extra " which amounts to unfair trade practice particularly when the retail chemists and druggists do not deposit the taxes and duties so collected from the consumer with the concerned authority. It is alleged in the complaint that in the process the chemists and druggists having collected the price for medicines over and above MRP in the name of local tax extra have unduly enriched themselves at the cost of poor consumer to a huge extent. The complainant has thus prayed as under: - 30. It is prayed for and on behalf of fellow consumers in India and myself being consumer of goods sold by the retailers of pharmaceutical and other related products, like, chemicals and equipment:

31.1 That this complaint may kindly be admitted as one of public interest lodged by a voluntary consumer association registered as a trust.

31.2 That complaints listed in paragraphs 10-20 herein above, viz, non-disclosure of the price and the rate at which consumer pays the Excise Duty, the first point sales/purchase, by the retailer, which shall constitute the part of MRP be declared an unfair trade practice and consumers in India provided relief on this count by imposing adequate penalty on the trade.

31.3 Consumers may kindly be got refunded the amount so collected in the name of "Local Taxes Extra " estimated to be not less than 200 crores (rupees two hundreds crores only) as requested in paragraph 14 & 14.1 herein above, to consumers and deposited in the Consumer Welfare Fund instituted by the Government of India.

31.4 Necessary directions of the Government of India in the Ministry of Consumer Affairs, Ministry of Chemical & Fertilizers in the Department of Chemicals and Petrochemicals, Drug Controller, National Pharmaceuticals Pricing Authority, the State Governments, manufacturers and importers of pharmaceutical products, related chemicals, and equipment, and chemists and druggist association/federations in the country, may kindly be given to indicate Maximum Retail Price inclusive of all taxes and duties along with batch number, date of manufacture and expiry in the light of the causes of this complaint listed herein above. "

Opposite parties No. 1 & 2 in their joint written statement raised an objection that the complainant has raised an individual grievance which cannot be agitated as a public interest litigation as such going by the transactions allegedly entered into by the complainant and the value of the same, the National Commission does not have pecuniary jurisdiction to entertain the complaint. Opposite parties No.1 & 2 have further taken a plea that the complainant has sought refund of large amount from chemists throughout the country by impleading only four individual chemists as such the plea of seeking refund is not maintainable in absence of individual chemists. It is also alleged that opposite parties No.1 & 2 are the President and Vice-President of All India Organization of Chemists & Druggists. Complainant did not purchase any medicine from opposite parties No. 1 & 2 as such there is no relationship of consumer and goods seller between the parties and the case against opposite parties No. 1 & 2 is not maintainable. On merits it is pleaded that the allegation regarding over charging is not true and the chemists and druggists were not under obligation to show the amount of sales tax separately. It was further pleaded that sales tax is an indirect tax payable at the first point of sale and under law liability in this regard can be passed on to the ultimate consumer. As such there is no error or illegality on the part of the chemists or druggists in passing on the sales tax liability to the ultimate consumer. Opposite parties No. 1 & 2 have thus pleaded for dismissal of complaint.

Opposite parties No. 3 to 6 in their written statement have raised the issue regarding the pecuniary jurisdiction of the National Commission. On merits they have pleaded that they did not over charge the complainant for the medicines sold to him.

Opposite party No.7 in his written statement has pleaded that the complaint against him is not admissible. Opposite party No.7 is neither a necessary party nor proper party particularly when opposite party No.7 has neither charged any consideration for any services rendered nor goods sold to the complainant. Opposite party No.7 has levied sales tax on behalf of the state and there is no element of fee or consideration. Therefore, the complainant is not a consumer qua him. It is alleged by opposite party No.7 that under the Sales Tax regime applicable at the relevant time, the local sales tax in the Delhi was leviable at the first point of sale and the sales tax being an indirect tax the retailor has a right to pass on the tax liability to the ultimate consumer. It was also alleged that the chemists under the law were not required to show local taxes separately in the cash memo while selling the medicines in case the goods have suffered the incidence of sales tax at the first point.

Opposite party No.8 has also resisted the complaint on merits. It is pleaded that the complainant is not a consumer as opposite party No.8 is only a statutory authority. It is also argued that complaint is not maintainable because opposite party No.8 is neither necessary nor proper party.

We have considered the rival contentions and the evidence adduced by the parties. Following are our findings.

First question which arises for consideration is whether the instant complaint has been filed by Shri G.C. Mathur in his personal capacity or on behalf of Voluntary Consumer Organization, Binty as its Convener-Trustee Treasurer. In this regard, it may be noted that the complainant has not shown any resolution of the aforesaid consumer organization authorizing the complainant G.C. Mathur to file a consumer complaint on behalf of the said organization. Therefore, it is obvious that Shri G.C. Mathur has filed this complaint in his personal capacity.

In para-3 of the complaint Shri G.C. Mathur has alleged that he has filed the complaint on his own behalf as also on behalf of the fellow consumers of medicines/drugs etc. distributed by the retailors in the country. From this it appears that the complainant has tried to maintain this complaint as PIL. Section 12 (1) (c) (i) of the Consumer Protection Act, 1096 deals with the manner in which the complaint shall be filed. The section provides that one or more consumers where there are numerous consumers having the same interest can maintain a consumer complaint for the benefit of all consumers so interest with the permission of the District Forum. Section 22 of the Consumer Protection Act, 1986 provides that the provisions of Section 12, 13 & 14 of the Act shall apply to the consumer complaints filed before the National Commission. Thus, it is obvious that in order to maintain the consumer complaint in the nature of PIL on behalf of other fellow consumers, the permission under Section 12 (1) (c) from the Commission was necessary. On perusal of the record we find that no such permission was either granted to or sought by the complainant. Therefore, he cannot maintain the consumer complaint in the nature of PIL and this complaint is to be treated as the consumer complaint filed by the complainant on his own behalf.

From the pleadings the stand of the complainant is that opposite parties No. 3 to 6 who are the retail chemists, sold medicines to the complainant on a price higher than the actual price in the garb of local taxes extra. Onus of proving this allegation lies heavily on the complainant. In support of this contention the complainant has referred to photocopies of cash memos P-12 to P-15 purportedly issued by the opposite parties M/s Gera Medical Store, M/s Gulati Medicos, M/s B.L. & Co. (Regd.) and All India Medicos. The cash memo issued by M/s Gera Medical Store is dated 7 th December, 2001 for sale of four medicines worth Rs.37/-; the cash memo issued by Gulati Medicos is dated 5 th January, 2002 for purchase of medicines worth Rs.686.95P; the cash memo issued by B.L. & Co. (Regd.) is dated 9 th April, 2002 for purchase of medicines worth Rs.130.41P and the cash memo issued by All India Medicos is dated 2 nd March, 2002 for purchase of medicines worth Rs.560.46P. In the cash memo of Gera Medical Store and Gulati Medicos it is printed that the price "inclusive of all taxes and other levies " and in the cash memo issued by B.L. & Co. (Regd.) and All India Medicos it is recorded "taxes paid " which means that all the four companies charged price of the medicines from the consumer inclusive of all taxes. Merely because the prices have been shown inclusive of taxes, it cannot be said that the aforesaid chemists have charged the complainant in excess of the MRP of the medicine. In order to prove that the complainant has been charged in excess of the actual price, the complainant was supposed to lead evident to the effect that either the actual prices of the medicines mentioned in the cash memo were less than the prices fixed by the authority or that he has been charged over and above the MRP. No such evidence has been adduced by the complainant. Therefore, we find it difficult to hold that the aforesaid four opposite parties have charged the complainant in excess of the actual price. The complainant has also placed on record photocopies of various other cash memos issued by the retailors other than the above-noted opposite parties. The aforesaid cash memos also do not show that the complainant has been charged a price more than the actual MRP of the medicines. Thus, in our view the complainant has failed to prove that he has been over charged by the opposite parties No. 3 to 6 or any other chemist.

The complainant in order to bring home his point has submitted that at the relevant time under the Sales Tax regime the sale tax was chargeable at the first point of sale which obviously was paid by the distributor who purchased the medicines from the manufacturer. Therefore, the a. opposite parties No. 3 to 6 as also other chemists by charging the price inclusive of sales tax have obviously charged the consumer at a rate higher than the actual price of the medicines they were supposed to charge. We do not find merit in this contention. Section 4 (2) (a) (i) of the Delhi Sales Tax Act, 1973 provides as under: - SECTION 4 (2) (A) (I): For the purpose of this Act, "taxable turnover " means that part of a dealer ''s turnover during the prescribed period of any year which remains after deducting therefrom- His turnover during that period on-

On reading of the above, it is clear that since the medicines and drugs at the relevant time were notified to be taxable at the first point under Section 5 of the Delhi Sales Tax Act, 1973, the subsequent sales of those goods by the retailers were exempt from payment of tax under Section 4 (2) (a) (i). Thus, it is clear that the retailers selling the medicines after purchasing the same from the distributors have not committed any wrong by issuing sale invoices mentioning the price of the medicines that the goods are "tax paid " or price "inclusive of all taxes and other levies "

Another contention of the complainant is that opposite parties No.3 to 6 have violated the right of the consumer by not giving the split of actual price of medicines and the amount of respective taxes. We do not find merit in this contention for the reason that the complainant has failed to show us any law or rule which at the relevant time made it obligatory on the part of the retailor chemists to issue cash memos giving the clear details of the price of medicines and the respective taxes levied.

In view of the discussion above, we are of the opinion that the complainant is miserably failed to establish that the opposite parties No. 3 to 6 have charged him in excess of the price of the medicines sold. Therefore, the complaint against opposite parties No. 3 to 6 is liable to be dismissed.

So far as opposite parties No. 1 and 2 are concerned, there is no allegation of their having any direct dealing with the complainant, as such, the complaint against them is not maintainable.

As regards opposite parties No. 7 and 8, they are statutory authorities. The complainant is not a consumer qua them. Therefore, the complaint against them is not maintainable.

In view of the discussion above, we do not find merit in the consumer complaint. It is accordingly dismissed.