Scrutiny of returns

(1) The prescribed authority shall, within the time and in the manner prescribed, scrutinize every return filed under sub-sections (1), (3) and (4) of section 30 for the purpose of ascertaining that— (a) all calculations contained therein are arithmetically accurate; (b) the output tax, the input tax, the tax payable and interest payable, if any, have been computed correctly and properly; (c) tax rates have been applied correctly; and (d) evidence has been furnished with regard to payment of tax and interest payable, if any. (2) If, upon scrutiny under sub-section (1) the prescribed authority discovers any error, it shall serve a notice in prescribed form on the dealer directing him to— (a) either pay, within thirty days, the exact amount of tax along with the interest, if any, payable and furnish the challan evidencing such payment; or (b) explain, within thirty days, that the return or returns filed by him do not suffer from the infirmities mentioned in sub-section (1). (3) (a) The prescribed authority shall, in a case falling under clause (b) of sub-section (2) and after giving the dealer a reasonable opportunity to adduce necessary evidence, pass such order in the matter as may be deemed fit. (b) If, pursuant to an order under clause (a), any sum is found to be payable, a notice in the form and manner prescribed, shall be served upon the dealer requiring him to pay the tax and interest within the time prescribed. (c) Any tax or interest payable under clause (b) shall be deemed to be an arrear of tax within the meaning of section 45 of the Act.