(1)If no returns are furnished by a registered dealer in respect of any period, by the prescribed date, or if the Commissioner is not satisfied that the returns furnished are correct and complete, the Commissioner 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 and in making such assessment shall give the dealer a reasonable opportunity of being heard; and in the case of failure by a registered dealer to furnish in respect of any period, a return accompanied by a receipt from a Government Treasury or the State Bank of India, as required under sub-section (4) of section 35 by the prescribed date, the Commissioner may if he is satisfied that the default was made without reasonable cause, during that the dealer shall pay by way of penalty, in addition to the amount of tax so assessed, a sum not exceeding one and a half time; that amount.Provided that where a registered dealer brings to the notice of the Commissioner in writing, within six months from the end of the year that, due to error in fact or in law, an amount of tax has been paid by him in excess of what was payable by him during any return period relating to such year, and request the Commissioner for making assessment under this sub-section in respect of such year, the Commissioner may if he is satisfied on the grounds adduced by such registered dealer making such assessment. Proceed to make assessment in respect of such year immediately on receipt of notice by the dealer.(2)Where upon search or seizure of any accounts, registers or documents or of any goods of a dealer registered under this Act, or upon enquiry or information received or upon verification of return under section (1) of Section 39 or where refund of any tax, interest or penalty arises or the Commissioner has reasons to believe that the dealer has not accounted for the turnover of sales of goods or purchases of goods as appearing from such accounts registers of documents in the books of accounts referred to in Section 84 or has not shown such turnover in his furnished under section 35 in respect of any return period or has furnished in correct statement of his turnover of sales or turnover of purchases or incorrect particulars of his sales or purchases in any return, the Commissioner shall not withstanding anything contained in sub-section (1) proceed in such manner as may be prescribed to assess to the best of his judgement the amount of tax payable by the dealer in respect of such return period after giving the dealer a reasonable opportunity of being heard and direct such dealer to pay the amount of tax so assessed in such manner and by such date as may be prescribed; the Commissioner may if he is satisfied that the default was made without reasonable cause, direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed, a sum not exceeding one and half times that amount.(3)No penalty under sub-section (1) or sub-section (2) shall be imposed in respect of the same fact for which the prosecution under section 90 has been instituted and no prosecution would lie vice versa.(4)If interest is payable in terms of section 39 in respect of any period, penalty under subsection (1) of sub-section (2) for failure to furnish a return by the prescribed date for such period shall not exceed fifty percentum of the amount of tax so assessed.(5)Subject to others provisions of this section assessment shall also be made in cases where business is closed by a dealer. Tax on goods that remain in stock at the time of cancellation of registration (including capital goods) on which input tax has already been given credit, shall be assessed and collected in the manner as may be prescribed.
