Tax liability must be reconsidered when the Tribunal ignores the governing provision on allocation of responsibility.

The controversy concerned whether tax could be sustained against an assessee when the purchasing dealer had issued form 3-Kha and the Tribunal had not examined the relevance of section 3-B of the U.P. Sales Tax Act. The High Court noted that liability had arisen in proceedings under section 21, but the Tribunal failed to consider whether any wrongful issue of the form should instead have been addressed against the purchasing dealer under section 3-B. Because the statutory allocation of liability was not considered in the proper perspective, the Tribunal's order was set aside and the matter was remitted for fresh adjudication in light of section 3-B.

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Issues: Whether the revision should succeed on the ground that the Tribunal did not consider the effect of section 3-B of the U.P. Sales Tax Act while upholding tax on the assessee despite the purchase form issued by the purchasing dealer.

Analysis: The assessee's liability arose in proceedings initiated under section 21 of the U.P. Sales Tax Act. The dispute centred on the use of form 3-Kha furnished by the purchasing dealer and the assessee's contention that, if the form had been wrongly issued, proceedings ought to have been taken against the purchasing dealer under section 3-B rather than taxing the assessee. The Court noted that the Tribunal had not examined the matter from the standpoint of section 3-B and therefore had not decided the controversy in its proper perspective. For that reason, the order of the Tribunal could not be sustained.

Conclusion: The revision was allowed, the Tribunal's order was set aside, and the appeal was directed to be decided afresh in the light of section 3-B of the U.P. Sales Tax Act.

Final Conclusion: The dispute was restored to the Tribunal for reconsideration, leaving the substantive tax liability open for fresh adjudication.

Ratio Decidendi: Where the appellate authority fails to consider the governing statutory provision relevant to the allocation of liability, the matter may be remitted for fresh decision rather than sustaining the tax demand.

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