Declaration form undertakings bind purchasers, while pre-acquisition tax liabilities remain outside the transferee's exposure.

A purchaser that obtains concessional sales on the footing of a statutory declaration-form undertaking must honour that undertaking for transactions within the permitted tax purpose; if it cannot furnish the forms, reimbursement of the seller's tax difference and consequential levy may follow. At the same time, liabilities arising from pre-acquisition supplies or orders are not automatically transferred to the acquiring corporation where the acquisition statute shifts earlier liabilities back to the original company and excludes enforcement against the transferee, and where prior contracts are not brought within the prescribed ratification mechanism. The document therefore distinguishes post-vesting supply obligations from pre-vesting liabilities under the acquisition framework.

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Issues: (i) Whether the purchasing dealer, having obtained supplies on the basis of a recognition certificate and undertaking to issue declaration forms, could later refuse to furnish the declaration forms or, failing that, be required to reimburse the selling dealers for the tax difference and incidental levy in respect of supplies made on or after 23 April 1984; and (ii) whether, for supplies and orders placed before 23 April 1984, the appellant-corporation was liable under the Acquisition Act to furnish declaration forms or reimburse the selling dealers.

Issue (i): Whether the purchasing dealer, having obtained supplies on the basis of a recognition certificate and undertaking to issue declaration forms, could later refuse to furnish the declaration forms or, failing that, be required to reimburse the selling dealers for the tax difference and incidental levy in respect of supplies made on or after 23 April 1984

Analysis: The facility under section 4-B of the Uttar Pradesh Sales Tax Act was available only where the goods were required for manufacture or packing of notified goods intended to be sold within the State, in inter-State trade, or for export. The appellant-corporation had itself represented that the tins were being purchased against declaration forms, received the supplies on that basis, and later used part of them for purposes outside the statutory purpose. That voluntary departure could not be used to defeat the undertaking given to the sellers. Since the sellers had supplied the goods at the concessional rate in reliance on that representation, equity and the statutory scheme justified a direction to furnish the forms or, if that became impracticable, to reimburse the sellers for the tax difference and any interest or penalty actually borne by them.

Conclusion: The appellant-corporation was bound, for post-vesting supplies, either to furnish the declaration forms or to reimburse the selling dealers for the tax difference and consequential levy; this issue was decided against the appellant-corporation.

Issue (ii): Whether, for supplies and orders placed before 23 April 1984, the appellant-corporation was liable under the Acquisition Act to furnish declaration forms or reimburse the selling dealers

Analysis: Section 6 of the Acquisition Act expressly shifted pre-appointed-day liabilities of the company to the company itself and, by clear language, excluded enforcement of such liabilities against the Central Government or the Government company. Section 22, dealing with existing contracts, required ratification within the prescribed period; absent such ratification, the contracts ceased to have effect, and the writ petitions did not provide a proper forum to challenge any non-ratification decision. Reading the provisions harmoniously, the appellant-corporation could not be saddled with liability for pre-vesting transactions, and any remedy in that respect lay elsewhere, not against the appellant-corporation.

Conclusion: The appellant-corporation was not liable to furnish the declaration forms or reimburse the selling dealers for supplies or orders placed before 23 April 1984; this issue was decided in favour of the appellant-corporation.

Final Conclusion: The appeals succeeded only in part. The appellant-corporation remained responsible for the post-vesting transactions, but it was discharged from liability for transactions attributable to the period before 23 April 1984.

Ratio Decidendi: Where a purchaser has induced concessional sales by undertaking to furnish statutory declaration forms, it must honour that undertaking for transactions within the applicable statutory purpose or compensate the supplier for the tax consequences; however, pre-acquisition liabilities cannot be fastened on the transferee corporation where the acquiring statute expressly excludes such liabilities and the relevant prior contracts are not properly brought within the ratification mechanism.

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