Bona fide acceptance of declaration forms protects a selling dealer unless negligence or detectable defect is shown.

A selling dealer taking Form 3-A declarations under the U.P. Sales Tax Rules is required only to examine whether the forms disclose defects that a reasonably prudent person could detect; there is no duty to conduct exhaustive verification of genuineness or to confirm issuance from the registering office. Where the forms are later found to be non-genuine or not issued to the stated purchasers, tax relief cannot be denied merely on that basis if the dealer acted bona fide and no negligence, manipulation, interpolation, or other suspicious defect is shown. The stated principle is that bona fide acceptance of apparently valid declarations protects the dealer unless lack of good faith or detectable defect is established.

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Issues: Whether the selling dealer was entitled to the benefit of Form 3-A declarations where the forms were later found to be non-genuine or not issued to the purported purchasers, in the absence of any finding that the dealer acted negligently or without bona fides.

Analysis: Form 3-A is issued under Rule 12-A of the U.P. Sales Tax Rules and contains particulars to be filled by the issuing officer for a registered dealer. The liability of the selling dealer is confined to checking such forms for defects that can reasonably be detected by an intelligent person. There is no provision casting on the selling dealer a duty to verify genuineness by exhaustive inquiry, expert examination, or direct confirmation from the issuing office. In the present matter, the authorities only found that the purchasers were not registered dealers and that the forms were not issued to them. There was no finding that the forms were facially suspicious, manipulated, interpolated, or that the revisionist acted negligently or otherwise than bona fide.

Conclusion: The dealer could not be denied the benefit of the forms merely because they were later found to have been misused, and the benefit of Form 3-A was held admissible.

Final Conclusion: The impugned order was set aside, the revision was allowed, and the matter was sent back for consequential orders consistent with the finding that the dealer was entitled to the benefit of the declarations.

Ratio Decidendi: A selling dealer who accepts declaration forms bona fide and without any detectable defect is not liable to be denied tax relief merely because the forms are later found to be non-genuine or misused, unless negligence or lack of bona fides is established.

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