43. Audit of accounts and assessment in certain cases.
(1) Notwithstanding anything contained in section 45, section 47 and section 49 and subject to such conditions, restrictions and in such manner, as may be prescribed, the Commissioner shall, from among registered dealers, select on a random basis, or upon information or otherwise, such percentage, or such class or classes of dealers, as may be prescribed, for audit of the accounts, registers or documents, including those in the form of electronic records, maintained or kept by such dealer for any year or part thereof, not being a period which has ended five years previous to the day of selection.
Provided that where selection of a registered dealer under this subsection has been made in respect of any year or part thereof and where in respect of such year or part thereof , as assessment has already been made under sub-section (1) of section 46 or an assessment made under sub-section (2) of section 45has not been revoked under sub-section (3) or sub-section (4) of section 45, such registered dealer for such year or part thereof shall be deemed to have not been selected under this subsection.
(2) After a selection made under sub-section (1), the Commissioner shall, with due notice to the dealer so selected, proceed to audit the accounts, registers and documents, including those in the form of electronic records, maintained or kept by the dealer to verify the correctness of returns furnished and the admissibility of various claims including the input tax credit or input tax rebate or refund, for the year or part thereof referred to in sub-section (1).
(3) The Commissioner shall, after considering all the evidence produced in course of the proceedings or collected by him, or to the best of his judgment where the dealer has failed to comply with the notice issued under sub-section (2) prepare a report stating his observation therein regarding the correctness of returns, admissibility of various claims of the dealer for the period for which such audit is made.
(4) Any audit under this section shall be completed within six months from the date on which the selection is made by the Commissioner:
Provided that where the Commissioner is satisfied that audit in respect of such dealer cannot be completed within six months from the date of selection, he may, upon giving the dealer an opportunity of being heard and for the reasons to be recorded in writing, extended the period for another six months:
Provided further that the order of such extension shall be made within six months from the date of selection for audit and such order shall be immediately communicated to the dealer.
(5) Where , from the finding contained in the report prepared under subsection (3), it appears to the commissioner in the return furnished by such registered dealer under section 32 in respect of a year or part of such year –
(a) Certain sale price or part thereof , contractual transfer price or part thereof, has not been disclosed in such return , or has escaped levy of tax thereon at the appropriate rate erroneously or otherwise, or
(b) Certain purchase price or part thereof has not been disclosed in such return, or has escaped levy of tax thereon at the appropriate rate, erroneously or otherwise, or
(c) the deductions from the turnover of sales were claimed under subsection (1) of section 16 in such return, erroneously or otherwise, in excess of what is admissible under sub-section (1) of that section, or the deductions so claimed in such return are not supported by evidence referred to in sub-section (1) of that section or
(d) excess amount of input tax credit or input tax rebate has been enjoyed by the dealer for that period, and no reverse credit for such excess amount has been made by such sealer, or
(e) the information furnished are not correct and complete, or
(f) there are certain other discrepancies , which has resulted in reduction of the amount of net tax payable by such registered dealer or the State Govt. has suffered loss of revenue on any of the grounds referred to in clause (a), (b), (c), (d), (e), (f), of this sub-section on account of such registered dealer in respect of such year or part of such year, the Commissioner shall, in accordance with the provision of sub-section (1) of section 46, assess to the best of his judgment the amount of net tax payable by such dealer in respect of such year or part thereof , as he may deem fit and proper , not only for the reason as described in this sub-section read with clause (ca) of subsection (1) of section 46 but also for any other reason as contained in other clauses of the sub-section (1) of section 46 where it is required to do so and also act according to the provision of sub-section (2) and sub-section (3), of section 46 :
Provided that where the assessment, as referred to in this sub-section, has to be made under sub-section (1) of section 46in respect of such year or part of such year for which the assessment is deemed to have already been made under sub-section 47, the Commissioner shall make such assessment in respect of such year or part of such year in accordance with the provisions of the proviso to sub-section (3A) of section 47 :
Provided further that no assessment under clause (ca) of sub-section (1) of section 46 shall be made, where the dealer has admitted, in writing , the observations made in the report referred to in sub-section (3) and has paid in full the amount of net tax paid in short , due to excess claim of input tax credit or input tax rebate or non-reversal of input tax credit, or for any otherreadon as mentioned in such report , with interest as payable under section 33 :
Provided also that the provisions of the second proviso shall not be applicable in respect of assessment required to be made under any of the clauses of sub-section (1) of section 46, other than clause (ca) of sub-section (1) of section 46.
(6) Where the report as referred to in sub-section (3) does not contain any such finding as described in clause (a), or clause (b) or clause (c), (d), (e), (f), of section (5), the Commissioner shall, in accordance with provision of sub-section (1) of section 46, assess to the best of his judgment the amount of net tax payable by such dealer in respect of such year or part thereof, as he may deem fit and proper, for the reason as contained in clauses other than in clause (ca) of sub-section (1) of section 46 where it is required to do so and also to act according to the provisions of sub-section (2) and sub-section (3), of section 46.
