19. Tax Audit

(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 or an agency authorised by him shall examine the correctness of the return or returns filed and admissibility of various claims including input tax rebate.

(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.

(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.