(1) The Commissioner or any other Authority as may be authorised by him in this behalf may, for ascertaining the correctness of returns furnished, admissibility of various claims and input tax credit, on the basis of any prescribed criteria or on random basis, inspect or audit or cause to be audited any of the returns furnished, documents or statutory forms submitted by a dealer, subject to such conditions and in such manner as may be prescribed.

(2) The inspection or audit as required under sub-section (1), may either be undertaken in the office of such Authority or in the business premises, or warehouse, or office of the dealer.

(3) The prescribed authority shall after considering all the evidence produced in the course of proceedings either, -

(a) confirm the self-assessment under sub-section (1) of section 21; or

(b) not confirm the self-assessment under sub-section (1) of section 21 and calculate the amount of tax due from the dealer; or

(c) calculate the amount of tax due from a dealer, if no such assessment has been made:

Provided that if the prescribed authority proposes to rely upon any evidence collected by him in the course of inspection, audit or investigation, the dealer shall, by a notice, be afforded an opportunity of correcting his self-assessment within a period not exceeding thirty days and if he fails to rectify his self-assessment, such authority shall re-assess the tax due, under the Act.