(1) Where,-

(a) a registered dealer is selected for audit assessment by the Prescribed Authority on the basis of any criteria or on random basis; or

(b) the Prescribed Authority is not satisfied with the correctness of any return filed under section 29; or bona fides of any claim of exemption, deduction, concession, input tax credit or genuineness of any declaration, evidence furnished by a registered dealer in support thereof; or

(c) the Prescribed Authority has reasons to believe that detailed scrutiny of the case is necessary; or

(d) a provisional assessment under section 34 has been made,

the Prescribed Authority may, notwithstanding the fact that the dealer may already have been assessed under section 34 or section 35, serve on such dealer in the prescribed manner a notice requiring him to appear on a date and place specified therein, which may be in the business premises or at a place specified in the notice, to either 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 including tax invoice, if any, or to produce such evidence as specified in the notice. For this purpose, the Prescribed Authority may also undertake tax audit of stock-in-trade of the dealer.

(2) The dealer shall provide full co-operation and assistance to the Prescribed Authority to conduct the proceedings under this section at his business premises.

(3) If the proceedings under this section are to be conducted at the business premises of the dealer and it is found that the dealer or his authorised representative is not available or is not functioning from such premises, the Prescribed Authority shall assess to the best of his judgement the amount of tax due from him.

(4) If the Prescribed Authority is prevented by the dealer from conducting the proceedings under this section, the Prescribed Authority may demand, a sum not exceeding the amount of tax so assessed, by way of penalty.

(5) The Prescribed Authority shall, after considering all the evidence produced in course of the proceedings or collected by him either-

(a) confirm the self assessment under section 35; or

(b) set aside the self assessment under section 35 and assess the amount of tax due from the dealer; or

(c) assess the amount of tax due from the dealer, if no assessment has been made under section 35:

Provided that if the Prescribed Authority proposes to rely on any evidence collected by him, the dealer shall be afforded a reasonable opportunity of being heard before any adverse inference is drawn.