National Consumer Disputes Redressal
Pushpa Tyagi & Anr. vs Merino Shelters Pvt. Ltd. on 4 November, 2022
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI EXECUTION APPLICATION NO. 150 OF 2021 IN CC/1232/2017 1. PUSHPA TYAGI & ANR. ...........Appellants(s) Versus 1. MERINO SHELTERS PVT. LTD. Man House, 101, S. V. Road, Vile Parle (W), Mumbai - 400056 Maharashtra 2. Mr. Nikhil R. Mansukhani Director / Authorised Signatory, Merino Shelters Pvt. Ltd. Man House, 101, S. V. Road, Vile Parle (W), Mumbai � 400056 Maharashtra ...........Respondent(s)
BEFORE: HON'BLE MR. DINESH SINGH,PRESIDING MEMBER HON'BLE MR. JUSTICE KARUNA NAND BAJPAYEE,MEMBER For the Appellant : For the Complainants / decree holders : Mr. Lokesh Bhola, Advocate For the Respondent : For the Opposite Party / judgment debtor : Mr. Kunal Tandon, Advocate with Ms. Swati Sinha, Advocate Ms. Niti Jain, Advocate Ms. Aanchal Tandon, Advocate Dated : 04 Nov 2022 ORDER E.A. No. 150 of 2021 in C.C. No. 1232 of 2017 Heard.
1. C.C. No.1232 of 2017 was disposed of vide this Commission's Order dated 11.03.2021 in terms of its Order dated 27.08.2019 in C.C.s No. 1377-1380 of 2015 Jayanti Mitra & Ors. vs. Merino Shelters Pvt. Ltd.
The operative portion of the Order of 11.03.2021 is reproduced below for reference:
The Complaint stands disposed of with the direction that the Opposite Party shall refund the deposited amount of Rs. 61,00,000/- along with interest @ 10% p. a. from the date of respective deposits till the date of payment. The Opposite Party shall also pay to the Complainant litigation costs of Rs. 20,000/-. The Opposite Party is directed to comply with this direction within 10 weeks from today.
2. Learned counsel for the judgment debtor submits on instructions that in compliance of the Order dated 11.03.2021 the awarded amount i.e. the deposited amount along with the interest thereon as well as the cost of litigation have been made good to the decree holders vide a cheque dated 31.08.2022. Submission is that the decree stands satisfied.
Learned counsel for the decree holders confirms on instructions that a cheque dated 31.08.2022 in respect of the awarded amount has been received by the decree holders.
3. Learned counsel for the decree holders however also submits that TDS has been made by the judgment debtor on the compensation paid by way of interest. Submission is that even though the same has been deposited in the decree holders' account with the Income Tax Department, tax should not have been deducted by the judgment debtor in the first place.
Learned counsel for the judgment debtor submits that the TDS made has been deposited in the decree holders' account with the Income Tax Department and the necessary form(s) / certificate(s) have been provided to the decree holders. Submission is that nothing more is required to be paid.
4. This Commission vide its Order dated 02.03.2022 in E.A. No. 122 of 2019 in C.C. No. 2123 of 2016 Rita Bakshi Vs. M3M India Limited & Ors. had earlier examined a similar matter. Paras 9 to 17 of the said Order are reproduced below for reference:
9. As has already been said, in cases pertaining to the 'service' of 'housing construction' also, it has to be seen that if, in similar facts, in one case an order is passed by a consumer protection forum for refund of the deposited amount along with compensation in lumpsum without involving the term "interest" in computing the compensation, and, in another case, an order is passed (by the same or different forum) for refund of the deposited amount along with compensation in which the term "interest" has been alluded to, it does not imply that in the one case where the term "interest" has not been used tax will not be deducted at source and in the other case where the term "interest" has been used or referred to tax will be deducted at source.
10. Where compensation is quantified or computed "by way of interest" on the deposited amount, i.e. when the term "interest" is involved in the formula or yardstick for arriving at a (just and equitable) compensation under section 14(1)(d) of the Consumer Protection Act, the context and meaning of the term "interest" is distinctly different from the context and meaning of the said term as used in section 194A of the Income Tax Act. And it can in no way be treated as "interest on compensation or on enhanced compensation" as contained in section 56(2)(viii) of the Income Tax Act.
11. The award of compensation under section 14(1)(d) of the Consumer Protection Act is in relation to both 'goods' and 'services' as well as in relation to all the different types of 'services' under the purview of the Act including the 'service' of 'housing construction'. It may or may not be computed by using "interest" as the formula or yardstick for computation. Just because in a particular case or in relation to a particular 'service' "interest" is used in a formula or yardstick to compute the compensation it does not imply that the very use of allusion to the term "interest" will cause the provisions of section 194A of the Income Tax Act to be attracted. Also, in so far as the provisions of section 56(2)(viii) of the Income Tax Act are concerned, this is not at all a case of "income by way of interest received on compensation or on enhance compensation" but is too obviously a case of "compensation" per se.
12. We may clarify that we are neither adding to or subtracting from the Income Tax Act. If a person is responsible to pay income-tax on any revenue or capital receipt under the said Act, he will be so liable.
13. We have amply clarified already hereinabove that the "compensation" awarded under the Consumer Protection Act is for the "loss or injury suffered" and is universally applicable to both 'goods' and 'services' inclusive of the 'service' relating to 'housing construction'. Thus in the 'service' of 'housing construction', if, in a particular case, "compensation" is computed "by way of interest" on the deposited amount it shall not be differently treated than the other cases in which the term "interest" may not at all be used in computing the compensation. The context and meaning of the term "interest" if used in the mode of calculation or a formula or yardstick adopted for computing compensation under section 2(1)(d) of the Consumer Protection Act is identifiably different from the context and meaning as used in section 194A of the Income Tax Act.
14. As such there was no justification for deducting tax at source in the instant case.
15. We also observe that the tax deducted at source on the compensation appears to be is a mistake with no malafide and even though the tax ought not to have been deducted it is also seen that the same has not been retained by the judgment debtors and has been deposited in the account of the decree holder in the Income Tax Department.
16. In the present facts and circumstances, though we explicitly and unambiguously make it clear that tax ought not to have been deducted at source on compensation awarded under the Consumer Protection Act even if it was computed "by way of interest" on the deposited amount, but in the instant case, noting the submissions of the learned counsel for the judgment debtors, the ends of justice will be met with if the decree holder takes the necessary steps to get the tax deducted at source duly adjusted / refunded from the Income Tax Department as per its rules and procedures, and information as required from the end of the judgment debtors is provided by them. The learned counsel for the decree holder agrees.
17. With observations as above, the matter is closed. The execution application no. 122 of 2019 stands disposed accordingly.
As such we agree with the learned counsel for the decree holders that tax should not have been deducted by the judgment debtor in the first place.
However in the instant case we do not notice any malafide on the part of the judgment debtor and even though tax should not have been deducted it is also seen that the same has not been retained by the judgment debtor but has been deposited in the account of the decree holders with the Income Tax Department.
We again make it explicit that tax should not be deducted at source on compensation awarded under The Consumer Protection Act, 1986 / 2019 even if the same is computed by way of interest on the deposited amount.
But in the present case the ends of justice will be met with if the decree holders takes the necessary steps to get the tax deducted at source duly adjusted / refunded from the Income Tax Department as per its rules and procedures, and information as required from the end of the judgment debtor is dutifully provided by them.
The judgment debtor is sternly cautioned not to deduct tax on compensation in such matters and cause inconvenience and harassment to the consumer.
5. As such the decree appears to have been satisfied, and nothing survives for execution.
Disposed.
6. The Registrar is requested to send a copy each of this Order to the parties and to their learned counsel immediately. The stenographer is requested to upload this Order on the website of this Commission immediately.
...................... DINESH SINGH PRESIDING MEMBER ......................J KARUNA NAND BAJPAYEE MEMBER