Natural justice bars a new adverse finding at review stage without hearing the affected dealer first.

A reviewing authority cannot sustain rejection of a review application on a new adverse finding affecting civil consequences unless the affected party is first confronted with that point and given a hearing. In proceedings on exemption under section 4A of the U.P. Sales Tax Act, 1948, the authority introduced a fresh finding on the date of commencement of production at the review stage and used it to deny the longer exemption period without notice to the dealer. The review order was therefore unsustainable, quashed, and the matter remitted for fresh decision by a speaking order after hearing the petitioner.

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Issues: Whether the reviewing authority could sustain rejection of the review application on a new finding regarding the date of commencement of production without first confronting the dealer and granting an opportunity of hearing.

Analysis: The challenge arose in proceedings concerning eligibility for exemption under section 4A of the U.P. Sales Tax Act, 1948. The reviewing authority recorded a fresh finding on the date of starting production and used that finding to deny the longer period of exemption. That conclusion was not the basis of the earlier order and was introduced at the review stage without notice to the petitioner. A new adverse finding affecting civil consequences could not be recorded without affording an opportunity to meet that point. The proper course was to remand the matter for fresh consideration by a speaking order after hearing the petitioner.

Conclusion: The impugned review order was unsustainable and was quashed. The matter was remitted to the authority for fresh decision after hearing the petitioner.

Final Conclusion: The petitioner succeeded to the extent that the adverse review order was set aside, and the authority was required to reconsider the date of commencement of production afresh in accordance with natural justice.

Ratio Decidendi: A reviewing authority cannot base its final decision on a new adverse finding not previously put to the affected party without first granting an opportunity of hearing.

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