(1) Any dealer whose gross turnover in a year exceeds rupees forty lac or such other amount as the Commissioner may, by a notification in the Government Gazette, specify, shall get his accounts in respect of that year audited by a Chartered Accountant or Costs and Works Accountant within such period from the end of that year as may be specified by the Commissioner by notification in the Government Gazette. The dealer shall obtain a report of such audit in the prescribed form duly signed and verified by such Chartered Accountant or Costs and Works Accountant and setting forth such particulars as may be prescribed.

(2) A dealer liable to get his accounts audited under sub-section (1) shall furnish such report to the Assessing Authority concerned within such period as may be specified by the Commissioner by notification in the Government Gazette. A true copy of the Audit report shall also be furnished to the Commissioner within the stipulated period.

(3) If any dealer, liable to get his accounts audited under sub-section (1), fails to get his accounts audited or fails to furnish the audit report or true copy thereof within the period specified under sub-section (2), the Assessing Authority shall, after giving such dealer an opportunity of being heard, impose on him. In addition to any tax payable, a penalty equal to 0.25% of the turnover as he may determining to the best of his judgment, in his case, in respect of the said period.