The Nagaland Value Added Tax Rules, 2005
CHAPTER-VI : Procedure for Assessment

51. Self-assessment. -

(1) Where a registered dealer has furnished the return with the required documents and tax due has been paid -

(a) the return shall be treated as an assessment of the tax payable as specified on the return on the day it is furnished;

(b) the return is deemed to be a notice of the assessment under the hand of the assessing authority;

(c) the notice referred to in clause (b) is deemed to have been served on the dealer on the day it is deemed to have made the assessment; and

(d) such deemed assessment shall be made for each return period.

(2) Scrutiny of returns.- Notwithstanding the assessments referred to in sub-rule (1), the appropriate assessing authority may, on the basis of information contained in the return filed by the dealer under sub-rule (1) or sub-rule (2) of rule 25 and rule 28, as the case maybe, scrutinize the correctness of the tax assessed by the dealer himself. For this purpose, the assessing authority may require the dealer to produce any account, documents or other evidences as may be deemed necessary for such scrutiny. The assessing authority is not required to pass any order of assessment if on such scrutiny, the return is found correct and complete.

(3) Escaped assessment.- If on scrutiny under sub-rule (2) the assessing authority is of the opinion that any lawful tax has escaped assessment or has been under-assessed, he may pass such order of assessment as he may deem fit after due notice in Form VAT-30. A copy of the order passed along with demand notice in Form VAT-31 shall be served upon such dealer for payment within twenty one days of the date of notice.

(4) Provisional assessment under section 35.- (a) For the purpose of assessment under section 35 of the Act, the appropriate assessing authority shall serve a notice upon the dealer fixing a date of hearing not less than 15 days from the date of service of such notice.

Provided that the appropriate assessing authority may, at his option, fix the date of hearing even before the expiry of 15 days from the date of service of notice, where he is of the opinion that granting of a time longer than that fixed by him to the dealer may be detrimental to the interest of the State Revenue.

(b) After giving the dealer a reasonable opportunity of being heard, the appropriate assessing authority shall assess to the best of his judgment the amount of tax payable by a dealer in respect of that period, recording the reasons thereof in writing, and shall pass an order imposing penalty as he deems fit.

(c) The appropriate assessing authority shall serve a notice of demand upon the dealer in Form VAT–31, fixing a date not less than 15 days to make the payment of the amount of tax assessed and penalty imposed, if any, under section 35 of the Act.

(5) Audit Assessment. - (a) For the purpose of audit assessment, audit shall be performed by VAT Auditors as a team. Such team of Auditors may consist of one or more Inspectors, Superintendents, Assistant Commissioner or Deputy Commissioner, as the Commissioner may deem fit.

(b) The audit team may be of the following types:

(i) Assistant Commissioner, Superintendent and Inspector of Taxes with Assistant Commissioner as its leader:

(ii) Deputy Commissioner, Assistant Commissioner, Superintendents of Taxes and Inspector of Taxes with Deputy Commissioner as its leader. The members of the team as stated above may, wherever necessary, take the assistance of the Inspectors of Taxes for making cross verification of documents such as bills, invoices or way bills etc.

(iii) Where a registered dealer is selected for audit, the concerned officer who will audit the records of such dealer shall require the dealer to produce books of accounts and relevant documents as may be specified before him on the date and time specified in the notice, not earlier than 15 working days from the date of issue of such notice.

(iv) On completion of audit, the audit team shall send a copy of the audit report to the concerned dealer, the assessing authority and to the Commissioner.

(i) headed by an Assistant Commissioner shall be scrutinized by a Deputy Commissioner.

(ii) headed by a Deputy Commissioner shall be scrutinized by an Additional Commissioner.

(d) The assessing authority shall, on receipt of the audit report, see whether there is any adverse finding in the report and if there is any, he shall proceed to take action under sub-section (7) of section 36 of the Act.

(6) Selection of dealers for audit.- (a) The Commissioner shall, under sub-section (1) of section 33 of the Act, select and assign to the VAT auditors at the beginning of a financial year certain number of registered dealers in the manner laid down under clause (c).

Provided that the Commissioner may, upon receipt of information or otherwise, select those dealers for audit who, according to him, are required to be audited.

(b) The audit referred to in clause (a) may be made for a period or for aggregate of periods.

Dealers	Percentage of dealers to be audited.

(i) having turnover of sales of less than rupees fifty lakhs.	Not more than 25%
(ii) having turnover of sales of fifty lakhs or above but lesser than rupees five crore.	Not more than 50%
(iii) having turnover of sales of rupees five crores and above	Not less than 100%
(iv) enjoying lump sum payment of tax at a compounded rate under section 53 and in any other case -	Not more than 10%

(v) claim of input tax exceeding fifty thousand rupees in a year;
(vi) claim of refund exceeding twenty five thousand rupees in a year;
(vii) claim of sales made in the course of inter-state trade and commerce or in the course of export of goods out of the territory of India or in the course of import of goods into the territory of India exceeding ten lakh rupees in a year;
(viii) fall in gross turnover or payment of tax compared to the last year;
(ix) claim of sale, purchase or consignment of goods not matching with the accounts of the other party to the transaction;
(x) exceptional cases in which ratio between purchases and sales or between input tax and output tax or between stocks and sales is disproportionate to the general trend in the trade or industry;
(xi) cases based on definite intelligence about evasion of tax;
(xii) cases selected at random;
(xiii) cases of any particular trade or trades which the Commissioner may select; and
(xiv) cases in which the dealer fails to complete the return(s) in material particulars after being given an opportunity for the same.

(d) Upon selection of registered dealers, the Commissioner shall send the list of registered dealers so selected to the audit team for conducting audit, and the list shall also be displayed for public viewing at the office of the appropriate assessing authority of dealers so selected.