All India Online Vendors Association Vs CCI
All India Online Vendors Association Vs CCI
All India Online Vendors Association Vs CCI
NEW DELHI
Versus
Vaishnavi Summit,
Ground Floor,
7th Main,
80 Feet Road,
3rd block,
Koramangala,
Industrial Layout,
Bengaluru – 560034
For Respondent: Shri Amit Sibal, Sr. Advocate with Shri Rajshekhar
Rao, Shri Yaman Verma, Ms. Neetu Ahlawat, Ms.
Sonali Charak, Shri Chaitanya Puri, Shri Saksham
Dhingra and Shri Areeb Y. Amanullah, Advocates
JUDGEMENT
(4th March, 2020)
A.I.S. Cheema, J. :
1. This Appeal has been filed by the Appellant - All India Online
and 3 were arrayed as OP1 and OP2 before CCI. We will refer to these
brief) against OP1 and OP2, inter alia, alleging that contravention of
provisions of Section 4 of the Act, was ignored by CCI holding that no case
of contravention of provisions of Section 4 of the Act was made out and the
of the Act.
Retail Services Private Limited, which was owned by founders of OP2 till
2012. The sale is made at discounted price to OP2 and thereafter, these
fee from the registered sellers. The Appellant claims that the act of OP1
discounted price and thereafter, the same being sold on platform operated
to certain sellers. Unfair trade practices were being followed and corporate
veil was required to be lifted. The acts of the OP1 and OP2 were in conflict
with other manufacturers selling on their platform and their own brands
6. The Impugned Order shows that CCI heard the parties and noticed
Judgement dated 25th April, 2018 passed by Hon’ble Income Tax Appellate
Tribunal, Bangalore Bench. CCI recorded that it has examined the rival
7. Thus, the CCI concentrated only on the role of OP2- Flipkart Internet
India Ltd. The CCI then went on to consider as to how OP2 operates on
marketplace not only have the option but also the ability and choice to sell
offer online buyers the touch-and-feel experience. It was stated that there
are also various offline retailers who have started their online ventures. It
platform and held that the relevant product market, in the case, may be
held that geographical market in the matter is “India” and relevant market
dominance and observed that the Informant has not given any credible
source for the market share data to claim that OPs hold over 40% market
share. It considered the defence of opposite parties that there are multiple
Flipkart and Amazon were bigger competitors. It observed that with regard
there were other new players in the marketplace as Paytm Mall. CCI
For such reasons, CCI found that the matter deserves to be closed.
9. We have heard Counsel for both sides and perused the record. The
submissions also.
10. Parties are making various averments against each other. However,
that the only question which was required to be looked into by CCI under
was alleged. According to the Appellant, the OP1 and OP2 were abusing
their dominant position by OP1 purchasing goods and selling the same to
vendors owned by founders of OP2 who in their turn sold the same at
Section 4(i) and (ii) and the first explanation may be reproduced for
reference:-
[Emphasis supplied]
11. In this context, the learned Counsel for the Appellant has referred to
Judgement dated 25th April, 2018 passed by the Hon’ble Income Tax
Appeal Paper Book. The learned CCI noticed this Judgement – “Flipkart
India” but did not discussed the same. The Appellant is relying on the
regard to this Judgement, the defence of the OP1 and OP2 is that ITAT had
rejected the findings of the Assessing Officer. That, the observations were
business entity, and that the same were not with regard to Flipkart
market forces. According to them, ITAT found that the parties purchasing
12. As at the present stage, we are concerned only to see whether a prima
facie case is made out. It appears necessary to make some reference to this
taking certain actions under the Income Tax Act and coming to certain
findings to impose tax. No doubt, the findings were found fault with by the
ITAT to set aside the imposition of tax but that would be besides the issue
Act to the facts which were found by the Assessing Officer. It is thus,
necessary to see what were the “facts found” by the Assessing Officer which
are matter of record. Assessee referred in the Judgement was present OP1.
[Emphasis supplied]
14. Judgement of the ITAT shows that against Order of Assessing Officer,
the Assessee (OP1) preferred Appeal to CIT(A) which confirmed the Order
assets which had been allowed by the Assessing Officer. Judgement of the
ITAT shows that it then heard the parties and considered the provisions of
the Income Tax Act, 1961 and discussed (in Para – 50 of that Judgement)
that the retailers therein were unrelated parties of the Assessee and that
(Flipkart.com). The learned ITAT considered the case of the Assessee and
did not agree with the Assessing Officer observing in para – 55 as under:-
It found that it was not possible to say that profits foregone created
reasons, it was found that the loss declared by the Assessee in the return
15. The above discussion makes it clear that ITAT set aside the Orders
passed by the Assessing Officer, confirmed by CIT(A) as they did not fit into
the requirements of law under the Income Tax Act. But then the
Judgement still shows manner in which OP1 was operating in the market
and predatory pricing was resorted to. The Order also shows that OP1 was
selling goods to retail sellers like, WS Retail Services Private Limited and
platform under the name Flipkart.com, i.e. OP2. The Appellant has rightly
pointed out there is a link between what OP1 and OP2 were doing.
Assessing Officer regarding the manner in which OP1 and OP2 were
operating is material. The conclusions drawn to impose tax may have been
set aside by ITAT; but the facts noticed do make out a prima facie case to
have a look under the Competition Act. These were actions by Government
16. We find that the Appellant did make out a prima facie case which
made in the matter. For such reasons, we set aside the Impugned Order
passed by CCI and remit back the matter to CCI. The CCI is directed to
[Kanthi Narahari]
Member (Technical)
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