Cause of action for additional sales tax arose on refusal to furnish declaration form, making the suit timely.

Under the Central Sales Tax Act, the concessional rate depended on furnishing the prescribed declaration form, and in its absence the general rate applied. The contract and billing pattern showed that the buyer was responsible for the tax burden and had accepted the concessional rate while leaving the declaration form outstanding. The cause of action did not arise on delivery or payment, but only when the buyer finally refused by letter dated 9 January 1976 to furnish the form, because that refusal breached the contractual obligation to supply it. A suit filed within three years of that refusal was therefore within limitation.

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Issues: Whether the suit for recovery of additional central sales tax was barred by limitation, and whether the cause of action arose on the date of delivery/payment or on the defendant's refusal to furnish the declaration form.

Analysis: The contract and the billing pattern showed that the defendant was to bear the tax burden and that the concessional rate of 3 per cent depended upon furnishing the prescribed declaration form. Under section 8(1)(b) and section 8(2) of the Central Sales Tax Act, 1956, the general rate applied when the declaration form was not supplied, and the record showed that the defendant had accepted the concessional rate while keeping the declaration form outstanding. The Court held that the plaintiff had no completed right to sue until the defendant finally refused, by the letter dated 9 January 1976, to furnish the declaration form. That refusal constituted the breach of the contractual obligation to supply the form and gave rise to the cause of action; the suit, filed within three years thereafter, was therefore within time.

Conclusion: The suit was not barred by limitation, and the plaintiff's claim was maintainable to the extent determined by the Court.

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