237. Manner of imposition of penalty on registered dealers for unauthorised use of goods and payment of such penalty

(1) Where it appears to the appropriate assessing authority that it is necessary to proceed against a registered dealer or an undertaking under sub-section (1) of section 77, such authority shall serve upon such dealer or undertaking a notice in Form 51 directing him to appear before him in person or through an authorised agent and

[a] to produce the books of accounts, relating to purchase and uses referred to in that sub-section for examination,

[b] to explain the books of accounts or documents produced by such dealer or undertaking and

[c] to show cause as to why a penalty for an amount as specified in the notice shall not be imposed on him on the date specified in such notice.

(3) The notice referred to in sub-rule (1) shall contain a gist of the order proposed to be passed against such dealer or undertaking.

(4) The registered dealer or undertaking, as the case may be, may, if he so wishes, prefer in writing any objection to imposition of penalty on or before the date of hearing or adduce such evidence as he likes to produce in support of his contention on such date of hearing.

(5) After hearing the dealer and examining the books of accounts, documents and such evidence as may be adduced by such dealer, the appropriate assessing authority may, by an order in writing, impose such amount of penalty under sub-section (1) of section 77 as he deems just and reasonable.

(6) The appropriate assessing authority shall serve upon the dealer, on whom penalty is imposed under sub-rule (5) a notice in Form 52 directing him to make the payment of the amount of penalty so imposed by the date specified in such notice and to produce the receipted challan in proof of such payment by the date specified therein.