Prescribed declaration protects selling dealer from tax liability unless invalidity or purchaser ineligibility is apparent on its face.

A selling dealer is not fastened with tax liability merely because a purchasing dealer later proves ineligible for exemption, where the purchaser furnished the prescribed declaration and nothing on its face indicated invalidity. The Court applied the exemption scheme as relieving the seller of any duty to investigate the purchaser's entitlement once the declaration was accepted in good faith. Any breach of the declaration conditions or ineligibility remained the purchasing dealer's responsibility, and the orders imposing liability on the seller were unsustainable.

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Issues: Whether the selling dealer could be fastened with tax liability for not charging tax when the purchasing dealer furnished the prescribed declaration claiming exemption, and there was nothing on the face of the declaration to alert the seller that it was invalid or that the purchaser was ineligible.

Analysis: The declaration scheme under the exemption notification was intended to relieve the selling dealer of the obligation to collect tax where the purchasing dealer furnished the prescribed form. The Court held that, in the absence of anything apparent on the face of the declaration to indicate invalidity or ineligibility, the seller was not required to investigate the purchaser's entitlement. The liability for any breach or ineligibility lay on the purchasing dealer, and not on the seller who acted on the declaration in good faith.

Conclusion: The selling dealer was not liable for tax merely because the purchasing dealer was later found to be ineligible or to have violated the declaration conditions; the impugned orders fastening liability on the seller were unsustainable.

Final Conclusion: The tax demand against the selling dealer was set aside, while the purchasing dealer's liability, if any in law, remained unaffected.

Ratio Decidendi: A selling dealer who accepts a prescribed declaration form in the ordinary course is not liable for tax unless the declaration is facially invalid or shows apparent ineligibility of the purchaser; liability for non-compliance rests on the purchasing dealer.

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