(1) Every dealer liable to pay tax shall,if his gross turnover of sales exceed rupees one crore in any year, or in any other case, if the amount of Input Tax Credit claimed by him in any year exceeds rupees 10 lakhs, get his accounts in respect of such year audited by an accountant within nine months from the end of that year and furnish within that period the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars and certificates as may be prescribed.

(2) For the purposes of this section, "Accountant" means a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949 (Central Act 38 of 1949).

(3) If any dealer liable to get his accounts audited under sub-section (1) fails to furnish a copy of such report within the time as aforesaid the Commissioner shall, after giving the dealer a reasonable opportunity of being heard, impose on him, in addition to any tax payable, penalty of rupees one thousand plus rupees hundred per day during the first thirty days of default and rupees two hundred fifty per day thereafter, subject to a maximum of rupees one lakh cumulatively.