Registration-based tax levy and appellate jurisdiction are limited to statutory preconditions and issues raised in the appeal.

Section 22(5A) of the Bombay Sales Tax Act, 1959 applied only where the dealer had obtained registration on its own application and it was then found that it ought not to have been registered under section 22; absent that finding, tax on the sale of scrap materials could not be sustained. The appellate power under section 55(6)(c) was confined to the subject-matter of the appeal and issues raised by the appellant, so a wholly unconnected point could not be examined. The levy on aluminium cuttings and brass borings was therefore disallowed, and the revenue's attempt to raise an extraneous issue was rejected.

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Issues: (i) Whether, in the absence of a finding that the assessee ought not to have been registered under section 22, tax could be levied on sale of scrap materials under section 22(5A) of the Bombay Sales Tax Act, 1959; (ii) whether, in an appeal under section 55(6)(c) of the Bombay Sales Tax Act, 1959, the appellate authority could examine a point not agitated in the appeal.

Issue (i): Whether, in the absence of a finding that the assessee ought not to have been registered under section 22, tax could be levied on sale of scrap materials under section 22(5A) of the Bombay Sales Tax Act, 1959.

Analysis: Section 22(5A) applied only when two conditions coexisted: the person had obtained registration on his own application, and it was thereafter found that he ought not to have been so registered under section 22. The Tribunal had proceeded on voluntary registration alone, but no authority had recorded a finding that the assessee ought not to have been registered for the relevant activity. The statutory condition precedent for invoking section 22(5A) was therefore absent.

Conclusion: The levy under section 22(5A) on the sale of aluminium cuttings and brass borings could not be sustained and the issue was decided in favour of the assessee.

Issue (ii): Whether, in an appeal under section 55(6)(c) of the Bombay Sales Tax Act, 1959, the appellate authority could examine a point not agitated in the appeal.

Analysis: The appellate power under section 55(6)(c) was held to be confined to the subject-matter of the appeal. The scheme of section 55(6), its division into separate categories of appeals, and the absence of an explanation equivalent to that in section 251 of the Income-tax Act, 1961 showed that the authority could deal with issues raised in the appeal and allied matters, but not with a wholly unconnected point not put in issue by the appellant.

Conclusion: The appellate authority could not travel beyond the issues raised in the appeal, and the rejection of the revenue's miscellaneous application was upheld in favour of the assessee.

Final Conclusion: The reference was answered by holding that section 22(5A) could not be applied without the requisite finding regarding improper registration, and that the appellate authority under section 55(6)(c) could not adjudicate a wholly unconnected issue not raised in the appeal.

Ratio Decidendi: Section 22(5A) can be invoked only on a prior finding that the dealer ought not to have been registered, and the appellate authority under section 55(6)(c) is confined to the subject-matter of the appeal and cannot decide an unconnected issue.

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