Form III B liability requires transaction-specific findings; blanket year-wide assessment for false declarations is impermissible.

Administrative circulars governing issuance and use of Form III B were to be given effect by the authorities, and could not be ignored while scrutinising concessional purchase declarations. Liability for a false or wrong declaration under Section 3B had to rest on a transaction-specific finding tied to the particular Form III B involved; a blanket assessment for the year was impermissible where the statute required form-wise examination and an opportunity of hearing. In the absence of a pinpointed finding that a specific form was false or wrong, the demand could not be sustained. The impugned orders were set aside and the matter remitted for fresh decision in accordance with law.

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Issues: (i) Whether the authorities were bound to follow the Commissioner's circulars governing issuance and use of Form III B. (ii) Whether liability under Section 3B could be fastened without a transaction-wise finding that Form III B was false or wrong.

Issue (i): Whether the authorities were bound to follow the Commissioner's circulars governing issuance and use of Form III B.

Analysis: The dispute concerned Form III B issued for concessional purchases under the trade tax framework. The record indicated that the relevant circulars prescribed the manner in which the form was to be issued and dealt with. Where administrative circulars govern the working of the statutory scheme, the authorities were expected to give them due effect while processing and scrutinising the forms.

Conclusion: The circulars were binding on the authorities and could not be ignored.

Issue (ii): Whether liability under Section 3B could be fastened without a transaction-wise finding that Form III B was false or wrong.

Analysis: Section 3B fastens liability only when a false or wrong certificate or declaration is issued, and the provision contemplates an opportunity of hearing. The form itself did not contain any column requiring disclosure of the tax rate, and the proceedings were initiated on a general footing for the assessment year. The provision was treated as applying to the specific certificate or declaration involved in the particular transaction, not by a blanket order for the whole year. In the absence of a pinpointed finding that a particular Form III B was false or wrong, the demand could not be sustained in the manner adopted below.

Conclusion: Liability under Section 3B could not be upheld without a transaction-specific finding of false or wrong issuance of Form III B.

Final Conclusion: The impugned orders were set aside and the matter was sent back for fresh decision by the assessing authority in accordance with law.

Ratio Decidendi: Liability for issuing a false or wrong declaration must be determined with reference to the specific transaction and certificate or form involved, and a blanket assessment for the entire year is impermissible where the statutory scheme requires form-wise examination.

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