77. Imposition of penalty for unauthorised use of goods by any registered dealer or undertaking

(1) If any registered dealer or undertaking, after purchasing any goods for any of the purposes referred to in clause (a), clause (b), clause (c), clause (d) and clause (e) of sub-section (2), sub-section (2A) or sub-clause (ii) of clause (a) of sub-section (3), of section 17, makes use of the same for any other purpose, the prescribed authority may, after giving such registered dealer or the owner of such undertaking a reasonable opportunity of being heard in the prescribed manner, by an order in writing, impose a penalty not exceeding double the amount of the tax which could have been levied under this Act in respect of the sale of such goods.

(2) If any penalty is imposed under sub-section (1), the prescribed authority shall issue a notice in the prescribed form directing the registered dealer or the owner of the undertaking to pay such penalty by such date as may be specified in the notice, and the date to be so specified shall not be less than fifteen days from the date of service of such notice :

PROVIDED that the prescribed authority may, for reasons to be recorded in writing, extend the date of such payment.

(3) Any penalty imposed under sub-section (1) shall be paid by the registered dealer or the owner of the undertaking, as the case may be, into a Government Treasury or the Reserve Bank of India by the date specified in the notice referred to in sub-section (2).

(4) No penalty under sub-section (1) shall be imposed in respect of purchases on which tax is payable under section 13.