(1) Where, the assessing authority, on the basis of any information in his possession which indicates that the whole or any part of the turnover of the dealer in respect of any tax period or tax periods has -

(a) escaped assessment; or

(b) been under-assessed ; or

(c) been assessed at a rate lower than the rate at which it is assessable;

or that the dealer has been allowed -

(i) wrongly any deduction from his turnover, or

(ii) input tax credit, to which he is not eligible,

the assessing authority may serve a notice on the dealer in such form and manner as may be prescribed and after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he deems necessary, proceed to assess to the best of his judgment the amount of tax due from the dealer.

(2) If the assessing authority is satisfied that the escapement or under assessment of tax on account of any reason(s) mentioned in sub-section (1) above is without any reasonable cause, he may direct the dealer to pay, by way of penalty, a sum equal to the amount of tax additionally assessed under this section.

(3) No order of assessment shall be made under sub-section (1) after the expiry of seven years from the end of the tax period or tax periods in respect of which the tax is assessable.

(4) "Notwithstanding anything contained to the contrary in this Act, an assessment under this section shall be completed within a period of six months from the date of service of notice issued under sub-section (1):

Provided that if, for any reason, the assessment is not completed within the time specified in this sub-section, the Commissioner may, on the merit of each such case, allow such further time not exceeding six months for completion of the assessment proceeding.

Provided further that if the commissioner feels it necessary to do so for good and sufficient reasons, he may allow such further time not exceeding another six months beyond the time allowed under the first proviso for completion of the assessment proceeding.