Concessional tax declarations bind the selling dealer unless fraud or fabrication is shown; reassessment cannot rest on audit objections alone.

A selling dealer who receives the prescribed declaration in form No. 32 for concessional tax treatment may rely on it and is not required to verify whether the purchasing dealer actually used the goods for the declared purpose. The declaration is binding on the seller unless there is fraud, collusion, forgery, fabrication, or doubt about genuineness, and any misuse of the concession falls on the purchasing dealer under the statutory scheme. On that basis, reopening of an assessment solely because of an audit objection or a later view on classification was not justified, and the reassessment orders were held to be without jurisdiction.

---

---

Issues: Whether a selling dealer, acting on a declaration in form No. 32 furnished by the purchasing dealer, is bound to accept the declaration for concessional tax purposes and whether reassessment could be reopened on the basis that the goods were not independently shown to fall within the relevant entry.

Analysis: The statutory scheme under section 9 allowed concessional tax where goods were sold to a registered dealer for specified use, and section 21 fastened liability on the purchasing dealer if the goods were not used for the declared purpose. Rule 67 further stated that a selling registered dealer shall not refuse to accept a declaration furnished by the purchasing registered dealer. The declaration in form No. 32 was treated as final for the selling dealer, subject only to inquiry into genuineness, fraud, collusion, forgery, or fabrication. The selling dealer was not required to verify the truthfulness of the declaration or to go behind it and examine whether the purchasing dealer in fact used the goods for the declared purpose. In view of that legal position, the original assessment accepting the concessional rate was justified and could not be reopened merely because of an audit objection or a later view on classification of the goods.

Conclusion: The selling dealer was entitled to rely on the declaration in form No. 32, and the reassessment orders were without jurisdiction and liable to be quashed.

Ratio Decidendi: Where a purchasing dealer furnishes the prescribed declaration for concessional purchase, the selling dealer is entitled to act on it and need not investigate the correctness of the purchaser's claim, except in cases of fraud, collusion, forgery, or fabrication; liability for misuse of the concession lies on the purchasing dealer.

---