The Delhi High Court on Monday directed the Delhi government to probe a complaint filed by two law students alleging that online food ordering company Food Panda was levying high Value Added Tax on many of its customers, reported The Times of India.
The Department of Trade and Taxes has been given three weeks to look into the complaint and take appropriate action in three months if the company is found guilty, the report states.
Pranav Jain and Aroon Menon, both final year law students who have former union minister and senior lawyer P Chidambaram as their representative, in a petition said that they had come across several cases where customers had to be pay taxes in excess of what was applicable legally at restaurants and online food portals. The duo then designed www.kitnatax.com, a website to calculate "the exact amount payable for a meal at a restaurant or delivered to their doorsteps", the TOI report states.
In their petition, they mentioned that "over the course of time and usage of the website and application (app), it was discovered that numerous customers of Food Panda website or app were being charged taxes that were wrongly calculated leading to customer paying more to FP than was actually required as per law".
The TOI report further states, "Chidambaram, along with advocate Naman Joshi, told the court that his clients' findings were corroborated when on ordering food on two occasions from two different eateries via the website's app, they realised that the VAT on both the occasions had been wrongly worked out. Instead of calculating the tax as a percentage of the sub-total, it had been determined on an amount that included the sub-total and the service tax."
"The same is in clear violation of provisions of Delhi Value Added Tax Act 2004 and leads to a cascading effect," the petition added.
Jain and Menon said that they had approached Food Panda and pointed out the irregularities, but the company did not respond to their complaints. It is then that they decided to approach the court.
The company told TOI that they have not received any notification in regard to the Delhi HC order as of now.