A popular restaurant in Jubilee Hills, Hyderabad, has been ordered to reimburse a customer after wrongly charging a service tax. The customer, Harish Kumar Goud, a real estate businessman, was charged Rs 247 as Service Tax Optional (ST OPT) after dining at the restaurant in October last year. After a year-long legal battle, Harish won Rs 4,000 as compensation from the restaurant.
Harish had dined at the Chiguru restaurant located on Road No. 36 in Jubilee Hills with his clients. The bill came to Rs 3,116, but he noticed an additional charge of Rs 274.90 under “ST OPT 10 per cent.” He immediately pointed this out to the waiter, claiming it was an illegal practice, and asked for a refund.
However, the restaurant refused to remove the service tax from the bill. Harish then sent a legal notice to the restaurant, which led to the amount being refunded to him. But when he asked if the restaurant would stop charging this service tax in the future, they said they would continue the practice. Disappointed by this response, Harish returned the refunded amount.
Feeling humiliated in front of his clients and other customers, Harish demanded Rs 1,00,000 in compensation and asked the restaurant to stop adding the service tax to their bills.
In its final ruling, the court directed the restaurant to refund the Rs 274 paid towards the service tax, along with interest at a rate of 9 percent per year from October 28, 2023. Additionally, the court ordered the restaurant to pay Rs 3,000 as compensation for causing mental distress and Rs 1,000 towards other costs.
