C.B. Capoor, J.
1. This is a plaintiffs appeal.
2. The plaintiff, the Delhi Iron and Steel Co. Ltd., offered to supply ballot boxes to the defendant, the State of U. P. at the rate of Rs. 5-1-0 each F. O. R. any station in the State of U. P. The aforesaid offer was accepted by the defendant subject to a deduction of one anna per ballot box on account of inspection charges. The plaintiff company supplied ballot boxes and submitted bills for Rs. 1,33,523-4-6, which amount included a sum of Rs. 2,053-8-6 on account of sale tax and a sum of Rs. 47-4-0 on account of octroi duty. The defendant paid a sum of Rs. 1,29,745 only and the plaintiff filed a suit to recover a sum of Rs. 2,300.
3. The defendant contested the suit on the ground that it was not liable to pay sales tax and octroi duty. The learned Munsif who tried the case held that the defendant was not liable to pay octroi duty. He, however, accepted the plaintiff's contention that the defendant was liable to pay sales tax and decreed the suit for recovery of a sum of Rs. 2,108-8-6. As against the aforesaid decision, the State of U. P.preferred an appeal which was allowed by the learned IInd Additional Civil Judge, Meerut, and the plaintiff's suit was decreed for recovery of a sum of Rs. 55 only with pendente lite and future interest at the rate of Rs. 6 per cent per annum. Aggrieved by the aforesaid decree the present appeal has been filed.
4. The only contention put forward on behalf of the appellant is that the learned lower appellate Court erred in disallowing the claim for the amount of sales tax. The argument is that the plaintiff company was registered as a dealer under the provisions of the U. P. Sales Tax Act and had been assessed to sales tax on the price of the ballot boxes and as such it had a right to recover the same from the defendant. The defendant on the other hand, contends that as there was no contract between the parties for the payment of sales tax it was not liable to pay the same. Sub-section (2) of Section 8-A of the U. P. Sales Tax Act of 1948 reads as below:--
'No person who is not a registered dealer shall realise any tax as such on sale of goods from the purchasers.'
This section no doubt empowers a registered dealer to realise sales tax on the sale of goods from the purchasers of goods from him but it does not make it obligatory on the dealer to realise Sales Tax and instances are not wanting where a dealer does not realise from the purchasers sales tax as such. In the Full Bench case of Adarsh Bhandar v. Sales Tax Officer, Aligarh, reported in (8) AIR 1937 All 475, the following observations were made:--
'There is nothing in the U. P. Sales Tax Act which makes it compulsory for the dealer to pass on the burden of the tax to the consumer. The Act provides that registered dealer can, if they like, realise the tax from their customer, but it is open to a dealer to pay the fax out of his own profits without adding it to the price paid by his customer if he so wishes.'
Sub-section (2) of Section 8-A of the U. P. Sales Tax Act is thus an enabling section and not a charging section and on its basis it cannot be held that because the plaintiff company was a registered dealer, an agreement must have been arrived at between the parties that sales tax will be payable on the supply of ballot boxes. In the instant case, what appeal's to have happened was that the Government invited 'tenders' for the supply of ballot boxes. The plaintiff company quoted Rs. 5-1-0 per ballot box F.O.R. any station in the State of U. P. This quotation was accepted on behalf of the respondent subject to this condition that a deduction of one anna per ballot box would be made as inspection charges. It was open to the plaintiff company to have indicated that the price quoted was over and above the sales tax leviable according to law. No such indication was, however, made. Even this does not appear to have been disclosed that the plaintiff company had been registered under the U. P. Sales Tax Act of 1948. In the circumstances, it could not be implied that the defendant was to be liable to pay sales tax over and above the price calculated at the stipulated rate. I am, therefore, of the opinion that it was not implicit in the agreement arrived at between the parties that the sales tax would be payable by the defendant on the price of the ballot boxes. There was thus neither any express nor implied contract to pay sales tax.
5. It has next been contended on behalf of the appellant that as the plaintiff charged sales tax in the bills submitted to the defendant, the latter was estopped from repudiating its liability to pay sales tax. It appears from a letter, dated 28th of April 1952 addressed to the Director of Collage Industries (Stores Purchase) Section, U. P., Kanpur, on behalf of the appellant company that the liability to pay sales lax was repudiated on behalf of the respondent and it further appears from letters, dated 29th May 1952 and 8th of July 1932 addressed to the appellant company that the question as to whether the Government was liable to pay sales tax on the price of the ballot boxes was under the consideration of Government. In the circumstances, it could not be said that the Government was estopped from disputing its liability to pay sales tax as sales tax had been charged by the appellant company in the bills submitted by it. There was no declaration, act or omission on the part of the respondent that might have made the plaintiff company to change its position to its prejudice and the principle of estoppel was not at all attracted to the instant case. For the foregoing reasons I hold that the respondent was not liable to pay sales tax and the finding to that affect recorded by the learned lower appellate Court is affirmed.
6. In conclusion, the appeal fails and isdismissed with costs.