(1) Where :

(a) a registered dealer has failed to furnish any return under sub-section(1) of section 31 in respect of any period;

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

(c) the Assessing Authority is not satisfied with the correctness of any return filed under section 31; or bonafide of any claim of exemption, deduction, concession, input tax credit or genuineness of any declaration furnished by a registered dealer in support thereof; or

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

the Commissioner or the Assessing Authority or any other Tax Officer, authorized by the Commissioner may, notwithstanding the fact that the dealer has already been assessed under section 38, serve on such dealer in the prescribed manner a notice requiring him to appear before him 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 accounts and all evidence on which the dealer relies in support of his return including tax invoices, if any, or to produce such evidence as specified in the notice.

(2) The dealer shall provide full cooperation and assistance to the Commissioner or the Assessing Authority or such Tax Officer as the case may be, to conduct proceedings under this section at his business premises.

(3) If proceedings under this section are to be conducted at the business premises of the dealer and it is found that the dealer or his authorized representative is not available or is not functioning from such premises, the Commissioner or the Assessing Authority or such Tax Officer as the case may be, shall assess to the best of his judgment the amount of tax due from him.

(4) If the Commissioner or the Assessing Authority or such Tax Officer as the case may be, is prevented from conducting the proceedings under this section, the Commissioner or the Assessing Authority or such Tax Officer may demand, a sum equal to the amount of tax so assessed, by way of penalty.

(5) On the date specified in the notice under sub-section (1) or as soon as may be thereafter the Commissioner or the Assessing Authority or such Tax Officer as the case may be, shall, after considering all the evidence produced in course of the proceedings or collected by him,-

(a) confirm the self assessment made under section 37;

(b) set aside the self assessment made under section 37 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 37:

Provided that if the Commissioner or the Assessing Authority or such Tax Officer as the case may be, proposes to rely on the evidence collected by him, the dealer shall be afforded a reasonable opportunity of being heard before any adverse inference is drawn:

Provided also that in case where the Assessing Authority initiates action under the provision of sub-section (1), sub-section (3) and sub-section (4) of section 39, it shall, submit a report thereof to the Commissioner.

Provided further that the Assessing Authority shall not take any action in respect of clause(b) and clause(c) of sub-section(5) of section 39 unless authorized to do so in writing by the Commissioner.

(6) If any dealer -

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

(b) has furnished incomplete and incorrect return for any period;

(c) has failed to comply with any notice under sub-section(1) or sub-section(3); or

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

the Commissioner or the Assessing Authority or such Tax Officer as the case may be shall, assess to the best of his judgement the amount of tax due from such dealer.

(7) If the Commissioner or the Assessing Authority or such Tax Officer as the case may be, 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 by the prescribed date;

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

(c) has availed tax credit to which he is not entitled to; or

(d) has employed such methods of accounting which do not enable the Commissioner or the Assessing Authority or such Tax Officer as the case may be, to assess the tax due from him or has knowingly furnished false or incorrect self assessment;

he shall, after giving the dealer a reasonable opportunity of being heard, direct that the dealer shall pay, by way of penalty, a sum equal to twice the amount of additional tax assessed on account of the said reasons under this section.

(8) If a dealer offers an explanation in respect of acts of omission and commission specified in sub-section (7), which is not bonafide or fails to substantiate the explanation offered with evidence he shall be deemed to be guilty of evading or avoiding payment of tax under this section.

(9) Any penalty imposed under this section shall be without any prejudice to the penalty prescribed under any other provision or prosecution for any offence under the Ordinance.