False declaration proceedings under trade tax law cannot stand where valid recognition and authority-issued forms existed.

Proceedings under section 3-B of the U.P. Trade Tax Act, 1948 could not be sustained where the dealer held a valid recognition certificate under section 4-B during the relevant year and the form III-B used for raw material purchases had been issued by the assessing authority itself. A declaration is actionable under section 3-B only if it is false or wrong at the relevant time, and a later view that the manufactured goods were not notified goods did not by itself make the declaration false. Any correction to the recognition certificate was a separate issue and did not justify invoking section 3-B on these facts. The demand was therefore set aside and the assessee's challenge succeeded.

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Issues: Whether proceedings under section 3-B of the U.P. Trade Tax Act, 1948 could be initiated on the footing that the dealer had issued a false or wrong form III-B despite holding a valid recognition certificate under section 4-B during the relevant year.

Analysis: The dealer held a valid recognition certificate under section 4-B in the assessment year in question and the form III-B was issued by the assessing authority itself for purchase of raw material. Proceedings under section 3-B can be sustained only where a dealer issues a false or wrong certificate or declaration. In these circumstances, the form III-B could not be treated as false or wrong merely because the assessing authority later formed an opinion that the manufactured products were not notified goods. If any correction to the recognition certificate was warranted, that was a separate matter and did not justify invocation of section 3-B on the facts found.

Conclusion: The initiation and levy under section 3-B were not justified. The order of the Tribunal setting aside the demand was upheld, against the Revenue and in favour of the assessee.

Final Conclusion: The revision failed and the Tribunal's order allowing the assessee's challenge to the section 3-B proceedings was left undisturbed.

Ratio Decidendi: Proceedings for a false or wrong declaration cannot be sustained where the dealer held a valid recognition certificate and the declaration used was issued by the assessing authority itself, absent a legally supportable finding that the declaration was false or wrong at the relevant time.

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