Step 1: Recall common modified dihybrid ratios.
Different gene interactions produce characteristic phenotypic ratios:
\[
\begin{aligned}
12:3:1 &\rightarrow \text{Dominant epistasis},
9:3:4 &\rightarrow \text{Recessive epistasis},
9:7 &\rightarrow \text{Complementary genes},
15:1 &\rightarrow \text{Duplicate dominant genes}.
\end{aligned}
\]
Step 2: Identify the correct interaction.
Since the observed phenotypic ratio is
\[
12:3:1,
\]
it corresponds to
\[
\boxed{\text{Dominant epistasis}.}
\]
Therefore,
\[
\boxed{(B)}
\]
is the correct answer.