40. Provisional assessment.

(1) Where a registered dealer fails to furnish the return in respect of any tax period within the prescribed time, the assessing authority, if he is satisfied that provisional assessment is necessary in that case, may proceed to assess the dealer provisionally for that period, notwithstanding anything contained in section 42.

(2)The provisional assessment under sub-section (1) shall be made on the basis of past returns or past records and, where no such returns or records are available, on the basis of information received by the assessing authority and in every such case, the assessing authority shall direct the dealer to deposit the amount of tax so assessed in such manner and by such date as may be prescribed.

(3) If the dealer furnishes return along with evidence showing full payment of the tax due and the interest and penalty, payable, if any, under section 34 on or before the date specified under sub-section (2), the provisional assessment made under subsection (1) shall stand revoked on the date on which such return is filed by the dealer.

(4) Nothing contained in this section shall prevent the assessing authority from making assessment under section 42 and any tax, interest or penalty paid against the provisional assessment under this section shall be adjusted against tax, interest or penalty payable on such assessment.