22. Audit and Re-assessment

(1) For the purposes of section 26, the Commissioner shall, in respect of any financial year, select by the 31st of March of the year following the financial year, such number of dealers as may be deemed fit, for audit, to be conducted either singly or by a team of officers for ascertaining the correctness of accounts maintained by such dealers. The number of registered dealers to be audited every year shall ordinarily be not more than ten percentum of the total number of registered dealers in the state.

(2) After making selection of the registered dealers under sub-rule (1), a list relating to each circle shall be sent to the concerned Circle Incharge and a copy of the same shall also be forwarded to the Joint Commissioner Incharge of Administration of the division.

(3) A list of dealers of a circle selected for audit shall be displayed for public viewing on the notice board of the concerned circle.

(4) The concerned circle Incharge shall constitute audit teams, from amongst the officers posted in the circle, in respect of the selected dealers.

(5) The head of the audit team constituted under sub rule (4) shall serve upon the dealer selected for audit, a notice in Form N-IV specifying therein, the time, date, the expected duration of the audit at the place of business of the dealer and the nature of accounts and documents to be examined by the audit team and the dealer shall comply with the terms of such notice.

(6) The audit authority may require the assistance of any authority or person for the cross verification of any information gathered during the course of an audit.

(7) The audit report drawn by the audit team shall be scrutinized by the Circle incharge and a final report shall be prepared a copy of which shall be handed over to the dealer.

(8) The dealer shall file his reply to the issues raised in the final report within a period not exceeding thirty days of the receipt of the report.

(9) If, having regard to the final report and the reply filed by the dealer, the authority specified in rule 62 has reasons to believe that the dealer has not disclosed his correct tax liability or has concealed or omitted any fact leading to any reduction in the tax payable by him, he shall proceed to reassess the dealer in terms of the provisions of section 31.

Provided that no reassessment under section 31 shall be made unless the dealer is served with a notice in Form N-V.