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(1) The prescribed authority shall undertake tax audit of the records; stock in trade and the related documents of the dealer, who are selected by the Commissioner in the manner as may be notified for the purpose.
(2) The tax audit shall be generally taken up in the office, business premises or warehouse of the dealer.
(3) For the purpose of tax audit under sub-Section (1) the prescribed authority or any other tax officer directed by him shall examine the correctness of return or returns filed and admissibility of various claims including input tax credit.
35. Assessment and self Assessment —
(1) Subject to provisions of sub-Section (2), the amount of tax due from a registered dealer or a dealer liable to be registered under this Act shall be assessed in the manner hereinafter provided, for the Tax Period during which the dealer is so liable as prescribed.
(Added by Jharkhand VAT Ordinance, 2011 - w.e.f. 01.04.2006)
(2) Notwithstanding anything contained in this Section, if a registered dealer has failed to furnish return or returns under sub-Section (1) of Section 29 in respect of any tax period or periods, the prescribed authority shall proceed to make provisional assessment under Section 36.
(3) * Where a registered dealer having turnover upto 1 (one) crore per annum other than the registered dealer referred to under sub-section 5 has furnished:-
(a) All the returns for any tax period.
(b) Revised returns and annual returns in respect of any tax period within the prescribed time and in the prescribed manner.
(c) Has paid the tax payable according to such returns or revised returns as also interest payable if any.
(d) Has furnished the Audit report within the prescribed time if required and in the prescribed manner.
The returns so filed are found to be in order shall be accepted as self - assessment in the prescribed manner subject to adjustment of any arithmetical errors apparent on the face of the said return(s) and his assessment shall be deemed to be have been made for the purpose of subsection (1) of Section 35, provided this provision shall not applicable to dealers covered under section 19 of the Act.
* (Substituted vide Not. No. LG 7/ leg. dated 13.02.2014) ** Without prejudice to the provisions of section 33 but subject to provisions of section 40, every registered dealer having turnover upto rupees 2 (two) crores per annum who has furnished the returns or revised returns along with evidences in support of payment of tax due with interest if payable, on or before the expiry of due date of filing of annual return according to sub-section (1) of section 29, shall be deemed to have been assessed excluding the dealers covered under section 19 of this Act.
Provided that the dealer shall be required to submit evidences in support of claims made in the returns within four months of the promulgation of this Act or the due date of filing the return whichever is later.
** Substituted vide Notification No. LG 165/leg dated 04.11.2016)
(4) The amount of input tax credit, exemptions and other credits or concessions claimed by the dealer in the return(s) for which no supporting declarations, certificates or evidence required under this Act or Central Sales Tax Act is furnished, self assessment shall be made accordingly without such input tax credit, exemption and other claims, treating such sales as taxable by levying appropriate rate of tax, notwithstanding the fact that the dealer may have been prevented by sufficient cause to produce such declarations, certificates or evidence in support of his claim.
(5) If a dealer has furnished all the returns and the revised returns, if any, within the prescribed period and in the prescribed manner or within next fifteen days thereafter and - 28 [a] The prescribed authority is satisfied that the returns or the revised returns as the case may be, and self assessment claim are prima-facie correct, consistent and complete, he shall accept the self assessment as filed by the dealer and shall assess the amount of tax and interest due from the dealer on the basis of such returns, after making prima-facie adjustment in the nature of arithmetical errors, if any, in the returns and the self assessment;
(Deleted by Jharkhand VAT Ordinance, 2011 - w.e.f. 01.04.2006)
(6) In the circumstances, if the self-assessment under sub-section (1), (2), (3), (4) and
(5) has not been filed within the prescribed time, the prescribed authority shall serve on such dealer a notice in the prescribed manner requiring him on a date and at a time and place to be specified therein either to attend in person or through an authorised representative or to produce or to cause to be produced any accounts and other evidences on which such dealer may rely in support of such returns and claims thereof and assess the dealer, the amount of tax and interest due from the dealer on the basis of such returns which have come on records and after making such adjustments as may be necessary including –
(i) disallowance of claim of input tax credit, exemptions, discounts and deductions and any other concessions or rebates not supported by requisite evidence as required under the Act or the rules made thereunder; and
(ii) disallowance of claims of tax payments and refund adjustment not verified or otherwise not admissible; and
(iii) withdrawal of claim of tax credit including carry forward of tax credit not admissible under the Act; and
(iv) levying of interest applicable under this Act.
Provided, notwithstanding anything contained in Section 36 if registered dealer fails to comply with all the terms of the notice under this sub-section or accounts and other evidence produced by him are, in the opinion of the prescribed authority incorrect, incomplete or unreliable either wholly or partly the said authority shall assess, to the best of its judgment, the amount of tax and interest due from the dealer which have come on records and after making such adjustments as may be necessary”.
(7) If the prescribed authority is satisfied that goods have been sold a price higher than that shown by the dealer, he may determine value of goods at the time of the sale and proceed to assess the tax on such price.
Provided before initiating such proceedings, the prescribed authority shall record his reasons for doing so and no orders shall be passed under this sub-section without giving the dealer an opportunity of being heard.
(Substitution and addition made in Section 35(1) to 35(7), by Jharkhand VAT Ordinance, 2011 - w.e.f. 01.04.2006)
(8) No assessment under sub-section (6) shall be made after the expiry of three years, from the end of the tax period, in respect of which or part of which the tax is assessable.
(Substitution made in sub-section (8) by Jharkhand VAT Ordinance, 2011 - w.e.f. 01.04.2009)
(9)* Notwithstanding the provisions of sub-section (3), the Commissioner shall select for assessment or re-assessment a number of such dealers as he deems fit whose assessment for a year is deemed to have been made under sub-section (1) in accordance with the provision of sub-section (3) and such selection shall be made within one calendar year from the said year.
(10)* (a) The Commissioner shall serve on a registered dealer referred to in the proviso to sub-section (1) or in sub-section (3) or a registered dealer who is not eligible for assessment under sub-section (2) with a notice in the prescribed form appointing a place and day and directing him,-
(i) to appear in person or by an agent entitled to appear in accordance with the provisions of section 91; or
(ii) to produce evidence or have it produced in support of the returns; or 29
(iii) to produce or cause to be produced accounts, registers, cash memoranda or other documents relating to his business.
(b) The Commissioner, after hearing the registered dealer or his agent and examining the evidence produced in compliance with the requirements of sub-clause (ii) or subclause
(iii) of clause (a) and such further evidence as he may require, shall assess or re-assess him to tax.
(c) The Commissioner may delegate his powers to Additional Commissioner or Joint Commissioner (Hq.) or Joint Commissioner of Commercial Taxes (Admn.) or to any other officer as he deems fits as provided under sub-section 9 of Section 35 (* Added vide Not. No. LG 7/ leg. dated 13.02.2014)
36. Provisional Assessment —
(1) Where a registered dealer fails to furnish the return in respect of any tax period within the prescribed time, the prescribed authority shall, notwithstanding anything contained in Section 37, proceed to assess the dealer provisionally for the period for such default.
(2) The provisional assessment under sub-Section (1) shall be made on the basis of past returns, or past records. Where no such returns are available, or on the basis of information received by the prescribed authority: the prescribed authority shall direct the dealer to pay the amount of tax assessed in such manner and by such date, as may be prescribed.
(3) If the dealer furnishes return along with evidence showing full payment of tax, interest and penalty, if any, on or before the date of payment specified under sub- Section 2, provisional assessment made under sub-Section (1) shall stand revoked to the extent of tax demanded, interest levied and penalty imposed, on the date on which such return is filed by the dealer.
(4) Nothing contained in this Section shall prevent the prescribed authority from assessment under Section 37; and any tax, interest or penalty paid against provisional assessment shall be adjusted against tax, interest and penalty payable under this Section.
37. Audit Assessment —
(1) Where
(a) a registered dealer has failed to furnish any return under sub-Section (1) of 29 in respect of any period; or
(b) a registered dealer is selected for audit assessment by the prescribed authority on the basis of any criteria or on random basis; or
(c) the prescribed authority is not satisfied with the correctness of any return filed under Section 29; or bona fides of any claim of exemption, deduction, concession, input tax credit or genuineness of any declaration, evidence furnished by a registered dealer in support thereof; or
(d) the prescribed authority has reasons to believe that detailed scrutiny of the case is necessary;
The prescribed authority may, notwithstanding the fact that the dealer may have already been assessed under Section 35 or 36, serve on such dealer, in the prescribed manner, a notice requiring him to appear on a date and place specified therein, which may be business premises or at a place specified in the notice, to either attend and produce or cause to be produced the books of account and all evidence on which the dealer relies in support of his returns including tax invoice, if any, or to produce such evidence as specified in the notice.
(2) The dealer shall provide full cooperation and assistance to the prescribed authority, to conduct the 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, giving him a notice to be present on prescribed date and time at his business premises and it is found that the dealer or his authorised representative is not 30 available or not functioning from such premises, the prescribed authority shall proceed to assess to the best of judgement the amount of tax due from him.
(4) If the prescribed authority is prevented from conducting the proceedings under this Section, he may impose, a sum equal to the amount of tax so assessed, by way of penalty.
(5) The prescribed authority shall, after considering all the evidence produced in course of proceedings or collected by him and is satisfied that;
the dealer-
(a) has not furnished returns in respect of any period(s) by the prescribed date;
or
(b) has furnished incomplete and incorrect returns for any period ;or
(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 this Act or has not regularly employed any method of accounting;
the prescribed authority shall assess to the best of his judgement, the amount of tax due from such dealer.
(6) If the prescribed authority 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; or
(b) has furnished incomplete and incorrect returns for any period; or
(c) has availed Input Tax Credit to which he is not entitled to or
(d) has employed such method of accounting which does not enable the prescribed authority to assess the tax due from him;
he shall, after giving the dealer reasonable opportunity of being heard, direct that the dealer shall pay, by way of penalty; a sum equal to thrice the amount of additional tax assessed on account of the said reasons under this Section.
38. Assessment of Dealer who fails to get himself Registered —
(1) If the prescribed authority, upon information which has come into his possession, is satisfied that any dealer who has been liable to pay tax under this Act, in respect of any period, has failed to get himself registered, the prescribed authority shall proceed in such manner as may be prescribed to assess to the best of his judgement the amount of tax due from the dealer in respect of such period and all subsequent periods and in making such assessment shall give the dealer reasonable opportunity of being heard.
(2) Notwithstanding anything contained in Section 28, the prescribed authority may, if he is satisfied that the default was without reasonable cause, direct that the dealer shall pay, by way of penalty, in addition to the amount of tax so assessed, a sum equal to the amount of tax assessed or a sum of rupees ten thousand whichever is greater.
39. No Assessment after five years —
(1) No assessment under Section 37 or 38 shall be made after the expiry of five years from the end of the tax period to which the assessment relates
Provided that in case of offence under this Act for which proceeding for prosecution has been initiated, the limitation as specified in this sub-Section shall not apply.
(2) Any assessment made or penalty imposed under this Chapter shall be without prejudice to prosecution for any offence under this Act.
40. Turnover escaping Assessment —
(1) Where after a dealer is assessed under Section 35 or Section 36 for any year or part thereof, and the Prescribed Authority, upon information or otherwise has reason to believe that the whole or any part of the turnover of the dealer in respect of any period has -
(a) escaped assessment; or
(b) been under assessed; or
(c) been assessed at a rate lower than the rate on which it is assessable
(d) been wrongly allowed any deduction therefrom; or
(e) been wrongly allowed any credit therein;
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(f) * been concealed in the returns filed or accounts maintained or other evidences produced by the dealer are incorrect, incomplete or unreliable;
the prescribed authority may, serve or cause to serve a notice on the dealer and after giving the dealer reasonable opportunity of being heard and making such inquiries as he considers necessary, proceed to assess to the best of his judgement, the amount of tax due from the dealer in respect of such turnover, and the provisions of this Act shall so far as may be, apply accordingly.
Provided, for clause (a), where the prescribed authority has reasons to believe that the dealer has concealed, omitted or failed to disclose willfully, the particulars of such turnover or has furnished incorrect particulars of his such turnover and thereby return figures are below the real amount, the prescribed authority shall proceed to assess or reassess the amount of tax due from the dealer in respect of such turnover and the provisions of this Act, shall so far as may apply accordingly and for this purpose, 'the dealer shall pay by way of penalty, a sum equal to thrice the amount of additional tax assessed'* * Provided further that for clause (f) if the tax has already been assessed and levied on the concealed turnover during assessment, the prescribed authority shall impose only penalty on the dealer equal to thrice the amount of additional tax assessed and levied.
* Substituted vide Notification No. LG 165/leg dated 04.11.2016)
(2) If the prescribed authority in the course of any proceeding or upon any information, which has come into his possession before assessment or otherwise, under this Act, and is satisfied that any registered dealer or a dealer to whom the registration certificate has been suspended under sub-section (7) of Section 25 –
(a) has concealed any sales or purchases or any particulars thereof, with a view to reduce the amount of tax payable by him under this Act, or
(b) has furnished incorrect statement of his turnover or incorrect particulars of his sales or purchases in the return furnished under sub-section (1) of Section 29; or otherwise, the prescribed authority shall, after giving such a dealer an opportunity of being heard, by an order in writing direct that he shall, in addition to any tax payable which is or may be assessed under Section 35 or 36 or 38, pay by way of penalty a sum equal to thrice the amount of tax on the concealed turnover or on concealed or incorrect particulars* for each month of such suppression or concealment or for furnishing incorrect particulars; on the amount of tax payable under the Act or on the suppressed turnover or on concealed turnover or for furnishing incorrect particulars.
(Substituted by Jharkhand VAT Ordinance, 2011 – w.e.f. 07.05.2011) (* Substituted vide Not. No. LG 7/ leg. dated 13.02.2014) The penalty shall be levied before the completion of the assessment and for determining the amount of penalty payable, the prescribed authority shall quantify the amount of tax payable provisionally under this Act.
* Substituted vide Notification No. LG 165/leg dated 04.11.2016)
(3) Any penalty imposed or interest levied under this section shall be without prejudice to any action, which is or may be taken under Section 84 of this Act.
(4) No order of assessment and reassessment shall be made under sub-Section (1) after the expiry of five years from the end of the year in respect of which or part of which the tax is assessable.