Wrong declaration under sales tax law requires causal link and statutory conditions before section 3-B notice can stand.

Section 3-B of the U.P. Sales Tax Act, 1948 applies only where a false or wrong declaration causes tax otherwise leviable to cease or become taxable at a concessional rate. On the stated facts, the petitioner bought old railway wagons, used form III-A on the basis that they were purchased for resale in the same condition, and later sold them accordingly. The notices relied only on sales bills and an assumption that the goods were scrap, without examining the railway sale terms, the condition of the goods at purchase, or any alteration destroying their original character. As the alleged non-levy was not shown to result from the declaration, the statutory basis for invoking section 3-B was absent and the notices were without jurisdiction.

---

---

Issues: Whether the notices issued under section 3-B of the U.P. Sales Tax Act, 1948, alleging wrongful use of form III-A in respect of purchases of old railway wagons, were sustainable.

Analysis: Section 3-B applies only where a false or wrong declaration is issued and, because of that declaration, a tax otherwise leviable ceases to be leviable or becomes leviable at a concessional rate. The material showed that the petitioner purchased old and discarded railway wagons, furnished form III-A on the footing that the goods were purchased for resale in the same form and condition, and thereafter sold the goods either against form III-A or to holders of recognition certificates. The notices proceeded only on the basis of the petitioner's sales bills and on an assumption that the purchases were merely scrap. There was no examination of the railways' sale terms, the condition of the goods at the time of purchase, or any finding that the goods had been altered so as to destroy the character in which they were bought. Whether the resultant goods were discarded wagons or iron and steel scrap depended on the factual condition of the goods after removal of excluded items, which could not be assumed in a notice under section 3-B. The alleged non-levy on the railways was not shown to have been caused by the petitioner's declaration, and the basic conditions for invoking section 3-B were absent.

Conclusion: The notices were without jurisdiction and justification and could not be sustained.

---