(1) The Commissioner shall, under the provisions of section 41, select a certain number of registered dealers ordinarily before the close of the year for audit during the following year.

Provided that, while selecting the registered dealers for audit, the Commissioner shall also specify the period(s) for audit, not being a period which has ended five years previous to the year during which audit is to be taken-up.

(2) The Commissioner, where considers it necessary to safeguard the interest of revenue or where any enquiry is required to be conducted on any specific issue or issues relating to any dealer, or class or classes of dealers, on being referred by an officer appointed under sub-section (2) of section 3, may direct audit to be taken up.

(3) The Commissioner may, on the basis of apparent revenue risk of theindividual dealers, make selection of dealers for special or investigation audit. The revenue risk may be determined on objective analysis of the risk parameters or on receipt of intelligence or information, regarding evasion of tax.

(4) For the control of large taxpayers, the Commissioner may, plan audit checks across the totality of the business of such dealers, within an audit cycle of two years.