Recognition certificate benefit cannot be denied in assessment for alleged breach; tax levy must follow specific statutory machinery.

A validly granted recognition certificate under section 4-B of the U.P. Sales Tax Act entitled the dealer to the notified-goods benefit in assessment, and an alleged breach of its conditions could not justify denial of that benefit. The court held that section 3-B, being penal in nature, could not be used as a charging provision to levy tax on the basis of such breach or to treat the certificate as a false or wrong declaration. Any violation of certificate conditions had to be dealt with through the specific machinery under section 4-B(4) and section 4-B(6). The revision was allowed, the Tribunal's order was set aside, and the matter was remitted for fresh orders.

---

---

Issues: Whether a dealer holding a recognition certificate under section 4-B of the U.P. Sales Tax Act could be denied the benefit attached to that certificate in assessment proceedings on the ground of breach of its conditions, and whether section 3-B could be invoked to levy tax on that basis.

Analysis: Section 4-B(2) places the grant of a recognition certificate on the assessing authority's satisfaction about the prescribed requirements and conditions. Once such a certificate is granted, the dealer is entitled to the benefit flowing from it in respect of notified goods. Any alleged breach of the certificate conditions does not convert the certificate into a false or wrong declaration within section 3-B. That provision is penal in nature and is not a charging section for assessment of tax. If the dealer violates the conditions attached to the recognition certificate, the Act provides specific machinery under section 4-B(4) and section 4-B(6) for proceedings on that breach.

Conclusion: The dealer could not be denied the benefit of the recognition certificate in the assessment merely because of an alleged breach of its conditions, and tax could not be levied by invoking section 3-B.

Final Conclusion: The revision was allowed, the Tribunal's order was set aside, and the matter was remitted for orders in accordance with section 11(8) of the U.P. Sales Tax Act.

Ratio Decidendi: A validly granted recognition certificate under section 4-B cannot be displaced in assessment on the basis of an alleged breach of its conditions; the remedy for such breach lies in the specific penal or cancellation provisions, not in levy of tax under a penal section.

---