DEFINITIONS

(11) “assessment” means determination of tax liability under this Act and includes self-
assessment, re-assessment, provisional assessment, summary assessment and best judgment
assessment;

(13) “audit” means the examination of records, returns and other documents maintained or
furnished by the registered person under this Act or the rules made thereunder or under any other
law for the time being in force to

(25) “Commissioner in the Board” means the Commissioner referred to in section 168;

1. “proper officer” in relation to any function to be performed under this Act, means
the Commissioner or the officer of the central tax who is assigned that function by the
Commissioner in the Board;
ASSESSMENT
59. Self-assessment.
Every registered person shall self-assess the taxes payable under this Act and furnish a return for
each tax period as specified under section 39. (Furnishing of returns)

60. Provisional assessment.

(1) Subject to the provisions of sub-section (2), where the taxable person is unable to determine
the value of goods or services or both or determine the rate of tax applicable thereto, he may
request the proper officer in writing giving reasons for payment of tax on a provisional basis and
the proper officer shall pass an order, within a period not later than ninety days from the date of
receipt of such request, allowing payment of tax on provisional basis at such rate or on such
value as may be specified by him.

(2) The payment of tax on provisional basis may be allowed, if the taxable person executes a
bond in such form as may be prescribed, and with such surety or security as the proper officer
may deem fit, binding the taxable person for payment of the difference between the amount of
tax as may be finally assessed and the amount of tax provisionally assessed.

(3) The proper officer shall, within a period not exceeding six months from the date of the
communication of the order issued under sub-section (1), pass the final assessment order after
taking into account such information as may be required for finalizing the assessment:

{Provided that the period specified in this sub-section may, on sufficient cause being shown and
for reasons to be recorded in writing, be extended by the Joint Commissioner or Additional
Commissioner for a further period not exceeding six months and by the Commissioner for such
further period not exceeding four years.}

(4) The registered person shall be liable to pay interest on any tax payable on the supply of goods
or services or both under provisional assessment but not paid on the due date specified under
sub-section (7) of section 39 or the rules made thereunder, at the rate specified under sub-section
(1) of section 50, from the first day after the due date of payment of tax in respect of the said
supply of goods or services or both till the date of actual payment, whether such amount is paid
before or after the issuance of order for final assessment.

(5) Where the registered person is entitled to a refund consequent to the order of final assessment
under sub-section (3), subject to the provisions of sub-section (8) of section 54, interest shall be
paid on such refund as provided in section 56.

61. Scrutiny of returns.

(1) The proper officer may scrutinize the return and related particulars furnished by the
registered person to verify the correctness of the return and inform him of the discrepancies
noticed, if any, in such manner as may be prescribed and seek his explanation thereto.
(2) In case the explanation is found acceptable, the registered person shall be informed
accordingly and no further action shall be taken in this regard.
(3) In case no satisfactory explanation is furnished within a period of thirty days of being
informed by the proper officer or such further period as may be permitted by him or where the
registered person, after accepting the discrepancies, fails to take the corrective measure in his
return for the month in which the discrepancy is accepted, the proper officer may initiate
appropriate action including those under section 65 or section 66 or section 67, or proceed to
determine the tax and other dues under section 73 or section 74.

62. Assessment of non-filers of returns.

(1) Notwithstanding anything to the contrary contained in section 73 or section 74, where a
registered person fails to furnish the return under section 39 or section 45, even after the service
of a notice under section 46, the proper officer may proceed to assess the tax liability of the said
person to the best of his judgement taking into account all the relevant material which is
available or which he has gathered and issue an assessment order within a period of five years
from the date specified under section 44 for furnishing of the annual return for the financial year
to which the tax not paid relates.
(2) Where the registered person furnishes a valid return within thirty days of the service of the
assessment order under sub-section (1), the said assessment order shall be deemed to have been
withdrawn but the liability for payment of interest under sub-section (1) of section 50 or for
payment of late fee under section 47 shall continue.

63. Assessment of unregistered persons.

Notwithstanding anything to the contrary contained in section 73 or section 74, where a taxable
person fails to obtain registration even though liable to do so or whose registration has been
cancelled under sub-section (2) of section 29 but who was liable to pay tax, the proper officer
may proceed to assess the tax liability of such taxable person to the best of his judgment for the
relevant tax periods and issue an assessment order within a period of five years from the date
specified under section 44 for furnishing of the annual return for the financial year to which the
tax not paid relates:

Provided that no such assessment order shall be passed without giving the person an opportunity
of being heard.

64. Summary assessment in certain special cases.

(1) The proper officer may, on any evidence showing a tax liability of a person coming to his
notice, with the previous permission of Additional Commissioner or Joint Commissioner,
proceed to assess the tax liability of such person to protect the interest of revenue and issue an
assessment order, if he has sufficient grounds to believe that any delay in doing so may adversely
affect the interest of revenue:
Provided that where the taxable person to whom the liability pertains is not ascertainable and
such liability pertains to supply of goods, the person in charge of such goods shall be deemed to
be the taxable person liable to be assessed and liable to pay tax and any other amount due under
this section.
(2) On an application made by the taxable person within thirty days from the date of receipt of
order passed under sub-section (1) or on his own motion, if the Additional Commissioner or
Joint Commissioner considers that such order is erroneous, he may withdraw such order and
follow the procedure laid down in section 73 or section 74.
AUDIT
65. Audit by tax authorities.

(1) The Commissioner or any officer authorised by him, by way of a general or a specific order,
may undertake audit of any registered person for such period, at such frequency and in such
manner as may be prescribed.

(2) The officers referred to in sub-section (1) may conduct audit at the place of business of the
registered person or in their office.

(3) The registered person shall be informed by way of a notice not less than fifteen working days
prior to the conduct of audit in such manner as may be prescribed.

(4) The audit under sub-section (1) shall be completed within a period of three months from the
date of commencement of the audit:

{Provided that where the Commissioner is satisfied that audit in respect of such registered person
cannot be completed within three months, he may, for the reasons to be recorded in writing,
extend the period by a further period not exceeding six months.}

Explanation.–– For the purposes of this sub-section, the expression "commencement of audit"
shall mean the date on which the records and other documents, called for by the tax authorities,
are made available by the registered person or the actual institution of audit at the place of
business, whichever is later

(5) During the course of audit, the authorised officer may require the registered person,—

(i) to afford him the necessary facility to verify the books of account or other documents as he
may require;

(ii) to furnish such information as he may require and render assistance for timely completion of
the audit.
(6) On conclusion of audit, the proper officer shall, within thirty days, inform the registered
person, whose records are audited, about the findings, his rights and obligations and the reasons
for such findings.

(7) Where the audit conducted under sub-section (1) results in detection of tax not paid or short
paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer
may initiate action under section 73 or section 74.

66. Special audit.

(1) If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any
officer not below the rank of Assistant Commissioner, having regard to the nature and
complexity of the case and the interest of revenue, is of the opinion that the value has not been
correctly declared or the credit availed is not within the normal limits, he may, with the prior
approval of the Commissioner, direct such registered person by a communication in writing to
get his records including books of account examined and audited by a chartered accountant or a
cost accountant as may be nominated by the Commissioner.

(2) The chartered accountant or cost accountant so nominated shall, within the period of ninety
days, submit a report of such audit duly signed and certified by him to the said Assistant
Commissioner mentioning therein such other particulars as may be specified:

Provided that the Assistant Commissioner may, on an application made to him in this behalf by
the registered person or the chartered accountant or cost accountant or for any material and
sufficient reason, extend the said period by a further period of ninety days.

(3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the
registered person have been audited under any other provisions of this Act or any other law for
the time being in force.

(4) The registered person shall be given an opportunity of being heard in respect of any material
gathered on the basis of special audit under sub-section (1) which is proposed to be used in any
proceedings against him under this Act or the rules made thereunder.
(5) The expenses of the examination and audit of records under sub-section (1), including the
remuneration of such chartered accountant or cost accountant, shall be determined and paid by
the Commissioner and such determination shall be final.

(6) Where the special audit conducted under sub-section (1) results in detection of tax not paid or
short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper
officer may initiate action under section 73 or section 74.

INSPECTION, SEARCH AND SEIZURE

67. Power of inspection, search and seizure.

(1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe
that––

a taxable person has suppressed any transaction relating to supply of goods or services or both or
the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this
Act or has indulged in contravention of any of the provisions of this Act or the rules made
thereunder to evade tax under this Act; or

any person engaged in the business of transporting goods or an owner or operator of a warehouse
or a godown or any other place is keeping goods which have escaped payment of tax or has kept
his accounts or goods in such a manner as is likely to cause evasion of tax payable under this
Act,

he may authorise in writing any other officer of central tax to inspect any places of business of
the taxable person or the persons engaged in the business of transporting goods or the owner or
the operator of warehouse or godown or any other place.

(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an
inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods
liable to confiscation or any documents or books or things, which in his opinion shall be useful
for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in
writing any other officer of central tax to search and seize or may himself search and seize such
goods, documents or books or things:
{Provided that where it is not practicable to seize any such goods, the proper officer, or any
officer authorised by him, may serve on the owner or the custodian of the goods an order that he
shall not remove, part with, or otherwise deal with the goods except with the previous permission
of such officer:}

Provided further that the documents or books or things so seized shall be retained by such officer
only for so long as may be necessary for their examination and for any inquiry or proceedings
under this Act.

(3) The documents, books or things referred to in sub-section (2) or any other documents, books
or things produced by a taxable person or any other person, which have not been relied upon for
the issue of notice under this Act or the rules made thereunder, shall be returned to such person
within a period not exceeding thirty days of the issue of the said notice.

(4) The officer authorised under sub-section (2) shall have the power to seal or break open the
door of any premises or to break open any almirah, electronic devices, box, receptacle in which
any goods, accounts, registers or documents of the person are suspected to be concealed, where
access to such premises, almirah, electronic devices, box or receptacle is denied.

(5) The person from whose custody any documents are seized under sub-section (2) shall be
entitled to make copies thereof or take extracts therefrom in the presence of an authorised officer
at such place and time as such officer may indicate in this behalf except where making such
copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the
investigation.

(6) The goods so seized under sub-section (2) shall be released, on a provisional basis, upon
execution of a bond and furnishing of a security, in such manner and of such quantum,
respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable,
as the case may be.

(7) Where any goods are seized under sub-section (2) and no notice in respect thereof is given
within six months of the seizure of the goods, the goods shall be returned to the person from
whose possession they were seized:
Provided that the period of six months may, on sufficient cause being shown, be extended by the
proper officer for a further period not exceeding six months.

(8) The Government may, having regard to the perishable or hazardous nature of any goods,
depreciation in the value of the goods with the passage of time, constraints of storage space for
the goods or any other relevant considerations, by notification, specify the goods or class of
goods which shall, as soon as may be after its seizure under sub-section (2), be disposed of by
the proper officer in such manner as may be prescribed.

(9) Where any goods, being goods specified under sub-section (8), have been seized by a proper
officer, or any officer authorised by him under sub-section (2), he shall prepare an inventory of
such goods in such manner as may be prescribed.

(10) The provisions of the Code of Criminal Procedure, 1973, relating to search and seizure,
shall, so far as may be, apply to search and seizure under this section subject to the modification
that sub-section (5) of section 165 of the said Code shall have effect as if for the word
"Magistrate", wherever it occurs, the word "Commissioner" were substituted.

(11) Where the proper officer has reasons to believe that any person has evaded or is attempting
to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the
accounts, registers or documents of such person produced before him and shall grant a receipt for
the same, and shall retain the same for so long as may be necessary in connection with any
proceedings under this Act or the rules made thereunder for prosecution.

(12) The Commissioner or an officer authorised by him may cause purchase of any goods or
services or both by any person authorised by him from the business premises of any taxable
person, to check the issue of tax invoices or bills of supply by such taxable person, and on return
of goods so purchased by such officer, such taxable person or any person in charge of the
business premises shall refund the amount so paid towards the goods after cancelling any tax
invoice or bill of supply issued earlier.

68. Inspection of goods in movement.

(1) The Government may require the person in charge of a conveyance carrying any consignment
of goods of value exceeding such amount as may be specified to carry with him such documents
and such devices as may be prescribed.

(2) The details of documents required to be carried under sub-section (1) shall be validated in
such manner as may be prescribed.

(3) Where any conveyance referred to in sub-section (1) is intercepted by the proper officer at
any place, he may require the person in charge of the said conveyance to produce the documents
prescribed under the said sub-section and devices for verification, and the said person shall be
liable to produce the documents and devices and also allow the inspection of goods.

70. Power to summon persons to give evidence and produce documents.

(1) The proper officer under this Act shall have power to summon any person whose attendance
he considers necessary either to give evidence or to produce a document or any other thing in
any inquiry in the same manner, as provided in the case of a civil court under the provisions of
the Code of Civil Procedure, 1908.

(2) Every such inquiry referred to in sub-section (1) shall be deemed to be a "judicial
proceedings" within the meaning of section 193 and section 228 of the Indian Penal Code

71. Access to business premises.

(1) Any officer under this Act, authorised by the proper officer not below the rank of Joint
Commissioner, shall have access to any place of business of a registered person to inspect books
of account, documents, computers, computer programs, computer software whether installed in a
computer or otherwise and such other things as he may require and which may be available at
such place, for the purposes of carrying out any audit, scrutiny, verification and checks as may
be necessary to safeguard the interest of revenue.

(2) Every person in charge of place referred to in sub-section (1) shall, on demand, make
available to the officer authorised under sub-section (1) or the audit party deputed by the proper
officer or a cost accountant or chartered accountant nominated under section 66—

(i) such records as prepared or maintained by the registered person and declared to the proper
officer in such manner as may be prescribed;
(ii) trial balance or its equivalent;

(iii) statements of annual financial accounts, duly audited, wherever required;

(iv) cost audit report, if any, under section 148 of the Companies Act, 2013;

(v) the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961; and

(vi) any other relevant record, for the scrutiny by the officer or audit party or the chartered
accountant or cost accountant within a period not exceeding fifteen working days from the day
when such demand is made, or such further period as may be allowed by the said officer or the
audit party or the chartered accountant or cost accountant.

72. Officers to assist proper officers.

(1) All officers of Police, Railways, Customs, and those officers engaged in the collection of land
revenue, including village officers, officers of State tax and officers of Union territory tax shall
assist the proper officers in the implementation of this Act.

(2) The Government may, by notification, empower and require any other class of officers to
assist the proper officers in the implementation of this Act when called upon to do so by the
Commissioner.