Customer takes Jubilee Hills restaurant to court over illegal service tax, wins case

Hyderabad consumer court’s recent order has brought consumer rights into focus. This time, the court directed a popular restaurant in Jubilee Hills locality to compensate a customer for Rs 3,000 for illegally charging a service tax of Rs. 247 during his visit to Chiguru Restaurant in October last year.

The customer, real estate businessman Harish Kumar Goud, objected to the inclusion of 10 percent Service Tax Optional charges of Rs 274.90 in his bill, which was Rs. 3,116. He insisted on a refund for the charged amount saying they cannot add 10 percent optional service tax as it is an illegal practice. However, the management remained adamant about the additional service tax charges.

Subsequently, the customer sent a legal notice to the restaurant, which prompted the management to initiate an immediate refund. He then asked them if they stopped charging this tax to their customers, and they replied in the negative.

Furious over the restaurant’s continuing practice of ST charges, Goud moved the consumer court. Following a year-long proceeding, the court directed the Jubilee Hills restaurant to refund Rs. 274 and pay Rs. 3,000 compensation for causing him mental agony and Rs. 1,000 to cover other case-related costs.