(1) Where in any particular year, the gross turnover of a dealer exceeds forty lakhs rupees or such other amount as the Commissioner may, by notification in the Official Gazette, specify, then such dealer shall get his accounts, in respect of that year audited by an accountant within nine months from the end of that year and obtain a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed:

Provided that in a case where such dealer is required under any other law to get his accounts audited, it shall be deemed to be sufficient compliance if he gets his accounts audited under such law and furnishes an audit report as required under such law and a further report in the form prescribed under this section within the time specified under sub-section (2).

(2) A copy of such report shall be furnished by such dealer to the Prescribed Authority along with the annual return within nine months from the end of the year to which the return relates.

(3) If any dealer fails to get his accounts audited under sub-section (1) and fails to furnish a true copy of the audit report within the time specified in sub-section (2), the Prescribed Authority may, after giving the dealer a reasonable opportunity of being heard, impose on him, in addition to any tax payable, a sum by way of penalty equal to half percent of the gross turnover or a sum of rupees one lakh, whichever is less.

Explanation.-For the purpose of this section, "Accountant" means a Chartered Accountant within the meaning of the Chartered Accountant Act, 1949 (Central Act 38 of 1948) or a Cost Accountant within the meaning of the Cost and Works Accountants Act, 1959 (Central Act 23 of 1959) and includes a person who by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956 (Central Act 1 of 1956), is entitled to be appointed to act as an auditor of Companies registered under the said Act.