A response period to the CCPA affidavit is given by HC to restaurant proprietors.
The CCPA prohibition under the July 4 order, according to the NRAI, was “arbitrary, unsustainable, and ought to be annulled” since it was imposed without taking into account the facts and circumstances, the top court was told.
The High Court was considering applications filed by the Federation of Hotels and Restaurants (FHR) and the National Restaurant Association of India (NRAI).
The Central Consumer Protection Authority (CCPA) filed an affidavit about the imposition of a service tax on meal bills, and the Delhi High Court gave organisations of hotel and restaurant operators two weeks to respond. The National Restaurant Association of India (NRAI) and Federation of Hotels and Restaurant Associations of India filed applications before the high court contesting the July 4 CCPA rules that forbade hotels and restaurants from adding service charges to meal bills.
Justice Yashwant Varma listed the case in November and stated, “The counsel for petitioners prays for and is allowed two week time to file response to the reply made by the CCPA in the petitions.”
The CCPA prohibition under the July 4 ruling, according to the NRAI’s arguments before the high court, was “arbitrary, unsustainable, and ought to be annulled” since it was enacted without consideration of the relevant facts and circumstances.
According to the NRAI appeal, “The levying of service charges has been a standing practise in the hotel business for more than 80 years, which is clear from the fact that the Supreme Court took note of this idea way back in 1964. “There is also a socioeconomic component to the collection of service fees. The service charge levying system makes sure that the collection of the service fee is distributed among the employees, not merely the employee serving the client in the restaurant, in a systematic and logical manner. This makes sure that the benefit is distributed equitably to all staff members, including utilities and back-office personnel, it stated.
Before the high court, the Center and CCPA argued that hotels and restaurants were flagrantly breaking the rules and taking service charges from patrons who were unsatisfied with the services even while doing so.
The government made the argument previously in its request for a vacation of stay, which was granted by the top court, based on CCPA rules limiting service charges on meal bills in hotels and restaurants.
The rules had been temporarily suspended by a ruling made by the sole judge on July 20. After that, the Centre and CCPA appealed the division bench’s decision to instruct the authorities to seek the necessary remedies from the single judge. In their vacation of stay argument, the authorities have argued that they were not given enough time or chance to make their case and that the temporary decision was issued in a hurry.
They claimed that because the service charge was mandated without any room for discretion on the part of the customers as a whole, a great hardship had been inflicted upon them.
The application states that after the July guidelines were released, 1105 more complaints from customers about unfair service charge levied by hotels and restaurants were made to the National Consumer Helpline. “It was noticed that restaurants and hotels were openly flouting the guidelines and collecting service charge from consumers involuntarily, even when they were dissatisfied with the services,” the application adds.
It claimed that these fees were being applied automatically or by default to food bills without giving customers a choice or the option to pay or not.
The application claimed that the standards do not infringe upon a restaurant’s or hotel’s ability to choose the pricing at which they wish to provide customers with their goods and services.
The CCPA requested rejection of the petitions and said in its counter affidavit that the petitioners had completely failed to understand the rights of the customers whose hard-earned money was being unfairly collected automatically or by default under the guise of a service charge.