Fresh evidence in appeal must follow prescribed procedure and fair hearing requirements before it can support an adverse finding.

Fresh evidence could not be relied upon suo motu by the appellate authority unless the conditions in regulation 17 of the Assam Board of Revenue Regulations, 1963 were satisfied, including necessity for deciding the appeal and an opportunity for the opposite party to rebut it. The Inspector of Taxes' report had not been tendered by any party and was used for the first time by the Board without following those safeguards. Because the report formed the basis of the finding against the assessee and no chance was given to contest it or lead rebuttal evidence, the resulting order was unsustainable for breach of natural justice and non-compliance with the regulation.

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Issues: (i) Whether the appellate authority could suo motu rely on the Inspector of Taxes' report as fresh evidence without compliance with the governing regulations. (ii) Whether the order of the appellate authority was vitiated because the report was used without giving the assessee an opportunity to meet its contents.

Issue (i): Whether the appellate authority could suo motu rely on the Inspector of Taxes' report as fresh evidence without compliance with the governing regulations.

Analysis: The governing provision permitted fresh evidence only within the conditions prescribed by regulation 17 of the Assam Board of Revenue Regulations, 1963. Fresh evidence could not ordinarily be adduced by a party, and the Board could accept or call for documents only where they were necessary for deciding the appeal and the opposite party was given an opportunity to produce rebutting evidence. The report in question had not been tendered by any party and was used for the first time by the Board. The mandatory procedural safeguards under regulation 17 were therefore not satisfied.

Conclusion: The appellate authority could not suo motu admit and rely upon the report as fresh evidence.

Issue (ii): Whether the order of the appellate authority was vitiated because the report was used without giving the assessee an opportunity to meet its contents.

Analysis: The report formed the basis of the finding that the containers were sold, but no opportunity was afforded to the assessee to challenge it or lead rebutting evidence. Use of untested material in that manner offended both the regulation governing fresh evidence and the principles of natural justice. Since the report was not part of the original record and was acted upon without notice or rebuttal, the resulting order was legally unsustainable.

Conclusion: The order of the appellate authority was vitiated for breach of natural justice and non-compliance with regulation 17.

Final Conclusion: The reference was answered in favour of the assessee on the admissibility and use of the Inspector's report, and the matter was left open for further consideration by the Board in accordance with law.

Ratio Decidendi: Fresh evidence cannot be relied upon by an appellate authority suo motu unless the governing procedure is followed and the opposite party is given a fair opportunity to rebut it; otherwise the resulting decision is invalid for breach of natural justice.

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