Appellate authority cannot decide issues beyond appeal grounds; extraneous input tax credit findings were expunged.

An appellate authority cannot travel beyond the grounds of appeal and record findings on an issue not arising for determination. Where the challenge to an advance ruling was confined to the scope of the appeal, observations on input tax credit made without that issue being raised were extraneous. The High Court held that such findings could not stand because they went beyond the controversy actually placed before the appellate forum, and they were liable to be expunged. The advance ruling itself remained undisturbed, but the unauthorised observations on input tax credit were removed from the record.

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Issues: (i) Whether the appellate authority could record findings on input tax credit when that issue was not raised in the appeal against the advance ruling.

Issue (i): Whether the appellate authority could record findings on input tax credit when that issue was not raised in the appeal against the advance ruling.

Analysis: The challenge before the Court was confined to the scope of the appeal against the advance ruling. The appellate authority nevertheless made observations on input tax credit in paragraph 6.8, although that question was not before the advance ruling authority and did not arise from the grounds of appeal. Findings travelled beyond the controversy actually placed before the appellate forum.

Conclusion: The appellate authority could not decide or observe upon input tax credit beyond the grounds of appeal, and the impugned observations were liable to be expunged.

Final Conclusion: The advance ruling remained undisturbed, but the extraneous observations made in appeal were removed from the record.

Ratio Decidendi: An appellate authority cannot travel beyond the grounds of appeal and record findings on an issue not arising for determination.

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