(1)The Commissioner or an agency authorised by him shall , on previous intimation to the

dealer , undertake tax audit, in such manner as may be prescribed, of the records ,

stocks in trade and the related documents of the dealer, who are selected by him in the

manner as he may deem fit. 

(2) The tax audit shall be generally taken up in the office, business premises or warehouse

of the dealer.

(3) [ For the purpose of tax audit under sub-section (1), the Commissioner 2or an agency2

authorised by him shall examine the correctness of the return or returns filed and

admissibility of various claims including input tax rebate .

--1.4.2006 to 24.12 .2007]

10Omitted 10

(4)For the purpose of tax audit, the Commissioner or an agency authorised by him may

enter the place of business, office or warehouse of the dealer and require him to produce

books of account and documents relating to his business, and the dealer , shall produce

the books of account and the documents relating to his business as required.

(5) Tax audit shall be completed within a period of six calendar months from the date of

institution of the proceedings and after completion of tax audit, a report shall be prepared

and in case of tax audit by an agency authorised by the Commissioner, the report shall

be submitted to the Commissioner, who shall send a copy of the report to the dealer.

(6) After such audit, if the return or returns filed by the dealer are not found to be correct, the

Commissioner shall by issue of a notice in prescribed form require such dealer to make

the payment of the additional amount of tax and /or interest payable by him, at such rate

as may be prescribed, within the period specified in such notice.

--1.4.2006 to 24.12 .2007]

(6)After such audit, if the return or returns filed by the dealer are not found to be correct or

the dealer has not filed return or returns, the commissioner shall by issue of a notice in

prescribed form require such dealer to make the payment of tax and / or interest payable

by him, at such rate as may be prescribed, within the period specified in such notice. 10

(7) If the dealer does not comply with the requirements made in the notice, the

Commissioner shall assess or re-assess him to tax and interest and / or to imposition of

penalty, in accordance with the provisions of section 20.