Phantom spirit: Eatery fined ₹10k for charging liquor tax on dry bill

Ludhiana: The District Consumer Disputes Redressal Commission has ordered a restaurant on South City Road to pay ₹10,000 in compensation to a customer for charging a mandatory service charge and Value Added Tax (VAT) on non-alcoholic items. The commission further directed the establishment to refund the disputed service charge of ₹221.45 and VAT amounting to ₹39.33 to the complainant, Vishwas Bansal of Ludhiana.According to the complaint, Bansal visited the restaurant on June 30, 2023, where he noticed an additional ₹35.75 as VAT plus a 10% surcharge of ₹3.58 on an article. Furthermore, the restaurant levied a separate service charge of ₹221.45. Bansal alleged that when he refused to pay the optional service charge, the cashier and staff misbehaved with him, causing distress and a loss of reputation. Despite sending a legal notice on July 16, 2024, and a representation to the Assistant Excise and Taxation Commissioner on August 22, 2024, the issue remained unresolved. Seeking a full refund and ₹50,000 in compensation, Bansal claimed he suffered mental agony and financial loss due to unfair trade practices.In its written statement, the restaurant argued it provides top-class service and only levies service charges after obtaining prior approval from guests. It also contended that VAT is exclusively charged on liquor following the implementation of GST. However, the commission noted that the tax invoice showed no mention of liquor ordered or consumed. It observed that the restaurant failed to lead evidence to rebut the complainant's contentions and was proceeded against ex-parte. Citing observations from the Delhi High Court, the commission held that imposing service charges in the invoice constitutes an unfair trade practice. It ruled that the restaurant must refund the ₹221.45 service charge with 8% interest from June 30, 2024, alongside the composite compensation of ₹10,000 for the harassment caused.