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Section 34. Audit assessment

(1) Subject to the provisions of sub-section (2), the amount of tax due from a registered dealer shall be assessed in the manner hereinafter provided, separately for each year, during which he is liable to pay tax.

(a) Where,

(i) the Commissioner is not satisfied with the bonafides of any claim of tax credit, exemption, refund, deduction, concession, rebate; or genuineness of any declaration or evidence furnished by a dealer in support thereof with the self-assessment, or

(ii) the Commissioner has reason to believe that detailed scrutiny of the case is necessary,

“(b) in respect of such class of dealers as the State Government may, by rules, specify.

the Commissioner may, notwithstanding the fact that the dealer may have been assessed under section 33, serve on such dealer in the prescribed manner a notice requiring him to appear on a date and place specified therein, which may be his place of business or a place specified in the notice, either to attend and produce or cause to be produced the books of account and all evidence on which the dealer relies in support of his returns or to produce such evidence as specified in the notice.

(3) The dealer shall provide all co-operation and reasonable assistance to the Commissioner as may be required in case the proceedings under this section are required to be conducted at his place of business.

(4) If proceedings under this section are to be conducted at the place of business of the dealer and it is found that the dealer is not functioning from such premises or no such premises exists, the Commissioner shall assess to the best of his judgment the amount of tax due from him.

(5) If the Commissioner is unlawfully prevented from conducting the proceedings under this section, he may assess to the best of his judgment the amount of tax due from the dealer and may further direct that the dealer shall pay, by way of penalty, in addition to the amount of tax so assessed, a sum equal to the tax amount.

(6) If any dealer-

(a) has not furnished returns in respect of any period by the prescribed date;

(b) has furnished incomplete or incorrect returns for any period;

(d) has failed to maintain books of accounts in accordance with the provisions of this Act or rules made thereunder or has not regularly employed any method of accounting,-

the Commissioner shall assess to the best of his judgment the amount of tax due from him.

(7) If the Commissioner is satisfied that the dealer, in order to evade or avoid payment of tax,-

(a) has failed to furnish, without reasonable cause, returns in respect of any period or the self-assessment by the prescribed date;

(b) has furnished incomplete or incorrect returns for any period;

(d) has employed such method of accounting which does not enable the Commissioner to assess the tax due from him, or

(e) has knowingly furnished false or incorrect self assessment,-

he shall, after giving the dealer an opportunity of being heard, direct that the dealer shall pay, by way of penalty, a sum not exceeding one and a half times of the amount of tax assessed on account of the said reason in the audit assessment.

(8) If the Commissioner, upon information which has come into his possession, is satisfied that any dealer who has been liable to pay tax under this Act in respect of any period, has failed to get himself registered, the Commissioner shall proceed to assess to the best of his judgment the amount of tax due from the dealer in respect of such period and all subsequent periods. In making such assessment, he shall give the dealer an opportunity of being heard. The Commissioner may, if he is satisfied that the default was without reasonable cause, direct that the dealer shall pay, by way of penalty, in addition to the amount of tax so assessed, a sum equal to the amount of tax assessed or a sum of rupees five thousand, whichever is more.

(8A)(a) During the course of any proceedings under this Act, if the prescribed authority is satisfied that the tax has been evaded or sought to be evaded or the tax liability has not been disclosed correctly or excess tax credit has been claimed by any dealer in respect of any period or periods by not recording or recording in an incorrect manner, any transaction of sale or purchase, or that any claim has been incorrectly made, then in such a case notwithstanding any notice for assessment has been issued under other provisions of this section or any other ~ection of this Act, the prescribed authority may, after giving such dealer a reasonable opportunity of being heard, initiate assessment of the dealer in respect of such transaction or claim.

Provided that where such proceedings are under section 73 or section 75, the prescribed authority shall transfer the proceedings relating to such transaction or claim directing the concerned assessing authority to assess the dealer in respect of such transaction or claim.

Provided further that the prescribed authority shall, notwithstanding anything contained in section 17, be deemed to have the requisite jurisdiction and power to assess such dealer in respect of such transaction of sale or purchase or claim, covered by clause (a) and such assessment proceedings shall, for all purposes of this Act, be deemed to have been transferred to such authority.

(b) The assessment proceedings under this sub-section shall be without prejudice to the assessment proceedings in respect of the said perioJ or periods under any other provisions of this Act by any authority who otherwise has the jurisdiction to assess such dealer in respect of other transactions of sale or purchase or any other claim.

(c) The assessment under this sub-section shall be made separately in respect of the transaction or claim relating to the said period or periods to the best of the judgment of the prescribed authority where necessary and irrespective of any assessment made under this sub-section, the dealer may be assessed separately Underthe other provisions of this section in respect of the said period or periods.

Provided that, once the dealer is assessed under this sub-section, no tax from such transaction or claim and penalty and interest, if any, shall be levied or demanded from such dealer, at the time of assessment to tax under the other provisions of this section in respect of the said period or periods relating to such transaction or claim.

Explanation.- For the purpose of this sub-section, "prescribed authority", "the said authority", "such authority" and "any authority" shall mean, the Commissioner or, as the case may be, the authorities appointed under section 16 and other officers or persons to whom the Commissioner has delegated his power in this behalf.

(9) No assessment under sub-sections (2), (5), (6) or (7) shall be made after the expiry of four years from the end of the year in respect of which or part of which the tax is assessable.

(10) No assessment under sub-section (8) shall be made after the expiry of eight years from the end of the year in respect of which or part of which the tax is assessable:

Provided that where any assessment is required to be made in pursuance of an order of any court or authority, such fresh assessment shall be made at any time within two years from the date of such order:

Provided further that in computing the period of limitation for the purpose this section, any period during which assessment proceedings are stayed by an order or injunction of any court or authority shall be excluded.

(11) Any assessment made or penalty imposed under this section shall be without prejudice to prosecution for any offence under this Act.

(12) Where in the case of a dealer, the amount of tax assessed for any period under this section or reassessed for any period under section 35 exceeds the amount of tax already paid under sub-section (1), (2) or (3) of section 30 by the dealer in respect of such period by more than twenty five per cent of the amount of tax so paid, there shall be levied on such dealer a penalty not exceeding one and one-half times the difference between the tax paid under section 30 and the amount so assessed or reassessed.