Natural justice in classification appeals requires notice before adopting a new classification; proceedings were vitiated and remanded.

An appellate classification order was set aside because the Collector (Appeals) departed from both the original classification and the assessee's claimed classification without giving notice to either side. That omission was held to violate the principles of natural justice and to vitiate the proceedings. As the procedural defect was decisive, the merits of the classification dispute were not examined. The matter was remanded for fresh consideration after due compliance with natural justice.

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Issues: Whether the appellate classification order could be sustained when the Collector (Appeals) departed from both the Assistant Collector's classification and the assessee's claim without notice, and whether the matter should be remanded.

Analysis: The appellate authority adopted a classification different from the one taken by the original authority and also different from the assessee's claimed classification, without putting either side to notice. Such a course was held to violate the principles of natural justice and to vitiate the proceedings. In view of this procedural defect, the merits of the classification dispute were not examined.

Conclusion: The matter was remanded for fresh consideration after complying with the principles of natural justice.

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