False declaration forms can trigger purchase tax liability when issued contrary to their statutory purpose.

False or wrong declarations under section 3B arise where a declaration form is issued contrary to its statutory purpose and, by reason of that declaration, tax on the transaction ceases to be leviable or becomes leviable at a concessional rate. Form III-C(2) is meant for a first purchaser to a selling agent or subsequent purchaser, while form III-C(5) applies only to specified factual situations such as purchases by manufacturers who have borne excise duty or dealers who have actually purchased the goods and received the relevant declaration. On the stated facts, the forms were incorrectly issued and the statutory conditions for liability were satisfied.

---

---

Issues: Whether the issuance of forms III-C(2) and III-C(5) by an eligibility certificate holder, whose manufactured goods were exempt from tax, amounted to false or wrong declarations so as to attract liability under section 3B of the U.P. Sales Tax Act, 1948.

Analysis: Section 3B fastens liability where a person issues a false or wrong certificate or declaration and, by reason of such declaration, tax leviable on the transaction ceases to be leviable or becomes leviable at a concessional rate. Under rule 12B, form III-C(2) is meant for the first purchaser to the selling agent or subsequent purchaser, while form III-C(5) is meant for specified categories including manufacturers who have borne excise duty or dealers who have actually purchased the goods and received the relevant declaration. The dealer held an eligibility certificate under section 4A and the dal manufactured by it was exempt from tax. In that situation, the declaration in form III-C(2) that the dealer was liable to purchase tax was incorrect, and form III-C(5), which presupposed a factual situation not present in the case, was also wrongly issued. Since the declarations had the effect of making tax cease to be leviable on the relevant purchases, the statutory conditions of section 3B were satisfied.

Conclusion: The declarations were false or wrong within the meaning of section 3B, and the levy under that provision was justified.

Final Conclusion: The revisions succeeded for the Revenue, and the Tribunal's order was set aside because the wrong use of the declaration forms attracted liability under section 3B.

Ratio Decidendi: A declaration form issued contrary to its statutory purpose, which causes purchase tax liability to cease on the transaction, can attract liability under section 3B even if the dealer otherwise holds an exemption or eligibility certificate.

---