44 Tax Audit


(1) For the purpose of examining the correctness of tax return or returns filed by a dealer or class of dealers and to verify admissibility of various claims including claim of input tax credit made by a dealer or class of dealers, tax audit shall be made of such number of dealers as may be prescribed.

(2) Any officer, not below the rank of an assessing authority, appointed by the State Government or the Commissioner and posted in the audit wing of the department administering this Act or any other officer authorised by the Commissioner in this behalf may, undertake tax audit of the records, stock in trade and the related documents of the dealers, who are specified or selected in the manner prescribed under sub-section (1):

Provided that no audit shall be undertaken for any assessment year after expiry of a period of three years after the end of such assessment year:

Provided further that where the officer making audit in respect of any assessment year is satisfied that the dealer has willfully suppressed any material fact leading to evasion of tax or has wrongly claimed any benefit, he may make audit for three consecutive assessment years prior to the assessment year in which audit is being conducted.

(3) For the purpose of the tax audit, officer referred to in sub-section (1) may require the dealer to produce before him records and other documents in his office.

Provided that where it is convenient, the officer may take up tax audit in the office, business premises or warehouse of the dealer.

(4) After completion of the tax audit, the officer making the audit shall send audit report prepared by him to the assessing authority of the dealer.