Step 1: Nitric oxide (NO), also known as endothelium-derived relaxing factor (EDRF), is synthesized by endothelial cells in response to various stimuli and acts on adjacent smooth muscle.
Step 2: NO diffuses to smooth muscle cells and acts via cyclic GMP (cGMP), which lowers intracellular calcium and produces smooth muscle relaxation.
Step 3: In the gut, peristalsis is triggered when the bowel wall is stretched by its contents. This creates a ring of contraction behind the bolus and a zone of relaxation ahead of it (the law of the intestine).
Step 4: The receptive (downstream) relaxation in front of the bolus is produced by enteric neurons that release NO, VIP and ATP. NO mediates this through a non-adrenergic non-cholinergic (NANC) mechanism, relaxing GI smooth muscle.
Conclusion: The primary action of NO in the GIT is GI smooth muscle relaxation, so option C is correct.