FoodPanda caught in a legal soup. Delhi HC orders probe.

Two law students had recently filed a suit against FoodPanda complaining of inflated Value Added Taxes in their food bills. Now, Delhi High Court has taken a serious note on the matter.

The Delhi High Court has asked the state government to look into the issue and investigate the charges. As per the order issued by Justice Rajiv Sahai Endlaw, the Department of Trade and Taxes has been given a time of three weeks to investigate the matter. If these allegations turn out to be true, the department will take an action against Foodpanda within three months.

FoodPanda’s CEO Saurabh Kochhar, however, has denied these reports about Delhi High Court ordering probe into the matter. Kochhar says that the company had not received any notification about the Delhi High Court ordering a probe into alleged inflation of food bills by the company.

Pranav Jain and Aroon Menon, final year law students, had earlier informed the court about unstructured tax process practiced by eateries and online food aggregators. Both students, with the help of their representative – former union minister and senior lawyer P Chidambaram – have informed the court about malpractices by online food aggregators.

The duo also informed about their website – kitnatax.com – which they have designed to calculate the exact amount payable for a meal in a restaurant or food delivered at their doorsteps.

The petition filed by the duo says that "over the course of time and usage of the website and application (app), it was discovered that numerous customers of Foodpanda website or app were being charged tax that were wrongly calculated leading to customer paying more to FP than was actually required as per law."

While explaining the matter to the court, Chidambaram, along with advocate Naman Joshi, said that his clients placed orders at two different occasions from two separate eateries and received bills in which VAT calculations were wrong. They did raise the matter with Foodpanda, but when their pleas elicited no response, they decided to approach the court.
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