False or wrong declaration standard governs section 3-B liability; officer's mistaken recognition certificate is not enough.

Section 3-B of the U.P. Sales Tax Act, 1948 applies only where a dealer gives a false or wrong certificate or declaration that causes a purchase or sale to escape tax or attract concessional tax. The Form III-B declarations here were not shown to be false or wrong, because the dealer certified that it held a recognition certificate and used the goods as raw material for notified goods in the manner required by section 4-B(2). Any error lay in the assessing officer's issue of the recognition certificate, and that administrative mistake did not satisfy the statutory condition for invoking section 3-B against the dealer. The tax levied under that provision was therefore liable to be quashed.

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Issues: Whether tax could be levied under section 3-B of the U.P. Sales Tax Act, 1948 on purchases made against Form III-B when the recognition certificate had allegedly been issued wrongly by the assessing officer and the declaration in the form was otherwise not false or wrong.

Analysis: Section 3-B applies only where a dealer issues a false or wrong certificate or declaration prescribed under the Act or the rules, and by reason of that certificate or declaration a purchase or sale transaction escapes tax or becomes taxable at a concessional rate. The form used by the dealer required certification that the dealer held a recognition certificate and that the goods were required as raw material for manufacture of notified goods to be sold in the manner contemplated by section 4-B(2). Those statements were not shown to be false or wrong. The alleged mistake lay in the assessing officer having issued a recognition certificate in the first place, even though the goods manufactured were exempt. A or improper action by the assessing officer does not satisfy the statutory condition for invoking section 3-B against the dealer.

Conclusion: Section 3-B could not be invoked against the dealer on the facts found, and the tax levied thereunder was liable to be quashed.

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