A reversal of fortune or disappointment. Also used in a verb form as to knock-back, meaning to refuse an offer. Drinkers in a hurry may also knock back their drink, that is, gulp it down.
In its reversal of fortune meaning the phrase originated in the late 19th century; for example, The Evesham Journal, May 1898:
"He objected to the powers of the guardians being relegated to the officers. It was a knock-back."
The refuse an offer meaning originated and is largely limited to Australia and New Zealand, although due to Australian soap operas like neighbours, the term now has currency on the UK. It was known in Australia by 1919, when it was defined by Walter H. Downing, in his handbook Digger dialects 1919:
"Knock-back, a refusal."
John Brophy and Eric Partridge, in Songs and slang of the British soldier, 1931, record the third meaning:
"Knock it back- To eat; sometimes, to drink."
That meaning evolved since over the last 75 years and is now usually limited to drinking.