Binding circulars and transaction-specific proof govern concessional declaration liability under Section 3 B, not a general yearly order.

Binding departmental circulars governing Form III B had to be followed by the authorities when processing concessional purchase declarations and taking consequential assessment action. Liability under Section 3 B could not be imposed unless there was a specific finding that a particular Form III B was false or wrong; a general yearly assessment order without identifying the relevant form or transaction was insufficient. The provision required transaction-wise scrutiny, and the absence of any column in Form III B for the tax rate did not justify adverse inference against the dealer. The Tribunal's order was therefore set aside and the matter remanded for fresh decision by the assessing authority.

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Issues: (i) Whether the circulars issued by the Commissioner were binding on the authorities while dealing with Form III B and the related assessment action; (ii) whether liability under Section 3 B could be fastened in the absence of a finding that Form III B was false or wrong and without identifying the particular form and transaction for the relevant assessment year.

Issue (i): Whether the circulars issued by the Commissioner were binding on the authorities while dealing with Form III B and the related assessment action.

Analysis: The statutory scheme recognized the use of Form III B by a registered dealer for purchases at a concessional rate under Section 4 B of the Act, and Rule 25 B prescribed the form. The record also showed that the circulars governing the manner of issuance and use of Form III B had not been given due weight. Since administrative circulars binding on the department were in force, the authorities were required to act consistently with them while processing the form and while taking consequential action.

Conclusion: The circulars were binding on the authorities and could not be ignored; this issue was answered in favour of the assessee.

Issue (ii): Whether liability under Section 3 B could be fastened in the absence of a finding that Form III B was false or wrong and without identifying the particular form and transaction for the relevant assessment year.

Analysis: Section 3 B fastens liability only where a false or wrong certificate or declaration is issued and thereby tax becomes non-leviable or leviable at a concessional rate. Form III B contained no column requiring mention of the rate of tax, so the assessee could not be faulted for not stating a rate not contemplated by the form. The provision also required transaction-specific scrutiny: each certificate or declaration had to be examined independently, and a general assessment order for the whole year without pin-pointing the particular form or transaction was not justified. In the absence of a clear finding that the form was false or wrong, the precondition for invoking Section 3 B was not satisfied.

Conclusion: Liability under Section 3 B was not sustainable on the basis of a general yearly order without identifying a false or wrong Form III B; this issue was answered in favour of the assessee.

Final Conclusion: The impugned order of the Tribunal was set aside, the matter was remanded for fresh decision by the assessing authority, and the revision succeeded to that extent.

Ratio Decidendi: Liability for concessional-tax misuse can be imposed only on a specific finding that a particular certificate or declaration was false or wrong, and a general assessment order without transaction-wise identification is impermissible; binding departmental circulars cannot be disregarded.

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