Appellate tax authority cannot impose a fresh levy beyond the appeal; factual finding of sale activity was upheld.

A factual finding based on survey material, diary entries, loose papers and stock records that the dealer was engaged in sale and purchase of bullion and gold ornaments was upheld because no perversity or illegality was shown. The plea that the transactions were only job work on labour basis was rejected. The Tribunal was also held unable to levy additional tax on ornament and bullion turnover for the first time when that levy had not been made in assessment and was not part of the subject-matter of the appeal. The additional tax was therefore deleted, while the finding on sale activity was maintained.

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Issues: (i) Whether the transaction in question amounted to sale or was only job work on labour basis. (ii) Whether the Trade Tax Tribunal could levy additional tax on turnover of ornaments and bullion when such levy had not been made by the assessing authority and was not the subject-matter of the Commissioner's second appeal.

Issue (i): Whether the transaction in question amounted to sale or was only job work on labour basis.

Analysis: The Tribunal's conclusion was founded on the survey material, including the diary, loose papers and stock of ornaments found at the business premises. The recorded entries and the nature of the stock led to an inference that the dealer was carrying on sale and purchase of bullion and gold ornaments. The finding was treated as one of fact, and no illegality, arbitrariness or perversity was shown to displace it.

Conclusion: The finding that the transaction amounted to sale was upheld and the assessee's plea of job work only was rejected.

Issue (ii): Whether the Trade Tax Tribunal could levy additional tax on turnover of ornaments and bullion when such levy had not been made by the assessing authority and was not the subject-matter of the Commissioner's second appeal.

Analysis: The assessment order and the first appellate order did not levy additional tax, and the Commissioner's appeal did not include any ground seeking such levy. The Tribunal's power in appeal was confined to the subject-matter of the appeal, and section 10 of the U.P. Trade Tax Act could not be used to enlarge the scope beyond what was appealed against. On that basis, the additional tax could not be introduced for the first time by the Tribunal.

Conclusion: The levy of additional tax was unsustainable and was deleted in favour of the assessee.

Final Conclusion: The revisions succeeded only to the limited extent of setting aside the additional tax, while the finding that the dealer was engaged in sale and purchase of bullion and ornaments was maintained.

Ratio Decidendi: In tax appeal proceedings, the appellate authority cannot grant a levy not imposed by the assessing authority and not included in the subject-matter of appeal; a concurrent factual finding based on evidence will not be interfered with unless shown to be perverse.

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