To come under the umbrella of vat audit two conditions must be simultaneously satisfied.
1. Total turnover (whether taxable or not) should exceed Rs 1 Crore and
2. Taxable turnover should exceed Rs. 20 lacs.
Thus if both of the above conditions are satisfied then only one is liable for vat audit.
e.g. an assessee having turnover of Rs 5 crore of exempted goods and Rs. 10 lacs of taxable goods is not liable for vat audit.