Audit direction under VAT law must be dealer-specific, reasoned, and preceded by notice and hearing; blanket orders fail.

Section 64(4) of the Tamil Nadu VAT Act requires the Commissioner to order audit of a registered dealer's business only after individual application of mind to that dealer's circumstances. A blanket or omnibus direction covering multiple dealers cannot substitute for a case-specific decision, and the power cannot be delegated through generalized selection criteria. Because the audit has civil consequences and may generate material used against the assessee, natural justice requires notice, an opportunity of hearing, and a reasoned speaking order in each case. The audit order was therefore invalid for want of individual consideration and compliance with natural justice, and the Revenue's challenge failed.

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Issues: Whether an order directing audit of a registered dealer's business under Section 64(4) of the Tamilnadu Value Added Tax Act, 2006 could be sustained when it was issued as a general omnibus direction covering multiple dealers, without individual application of mind, notice, and hearing to the concerned dealer.

Analysis: Section 64(4) empowers the Commissioner alone to order audit of the business of any registered dealer by an officer not below the prescribed rank. The power is to be exercised with reference to the particular dealer and the particular circumstances showing the need for audit. The Court held that the provision does not contemplate delegation of the decision-making function to a lower authority, nor does it permit a blanket selection of dealers by general criteria without examining each case individually. Since the audit direction has civil consequences and the material generated in the audit may be used against the assessee, the provision must be read as requiring observance of natural justice, including notice and opportunity of hearing, and a reasoned speaking order based on application of mind in each case.

Conclusion: The audit order was invalid for want of individual consideration and compliance with natural justice, and the challenge by the Revenue failed.

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