Well, I don't know about my answers being gospel either!
There are just two points that I feel able to make with some confidence. The first one is a recommendation. Assuming this is a matter of some local importance, then I think you should be able to expect support from the local Standards Officer - typically the chief legal officer of the district council. I would ask to consult with him on this parish matter, put the facts before him, and ask for his advice on how to behave. He should be able to give a sound answer, and you will then have a solid authority behind you.
The other is that local councillors, whether chairman or not, have no business attempting to make judgements on matters of interests nor do they have any rights of enforcement. They can make complaints through the official channels if they wish, but they cannot tell other councillors their duty.