(1) Where it appears to the Joint Commissioner, Deputy Commissioner or Commercial Tax Officer, as may be authorised by the Commissioner in this behalf (hereinafter referred to in this rule as authorised officer) that a person is personally liable for contravention of the provisions referred to in sub-section (5) of section 38 in relation to a dealer, such authorised officer shall serve upon such person a notice in Form 49 directing him to appear personally or through an authorised agent before the said authority on the date specified in such notice and show cause as to why a penalty shall not be imposed on him under that sub-section.

(2) The authorised officer shall specify the date for hearing in the notice under sub-rule (1) ordinarily not less than twenty days from the date of issue of the notice.

(3) The notice issued under sub-rule (1) shall contain a gist of the order that such authority may like to pass against the person for imposition of penalty.

(4) On receipt of the notice referred to in sub-rule (1), the person may prefer any objection to the imposition of penalty and adduce such evidence as he wishes to produce in support of his contention on or before the date fixed for the hearing.

(5) After hearing the person on whom notice is served under sub-rule (1), considering such evidence as may be adduced and objection as may be preferred by him, if the authorised officer is satisfied that such person is liable for contraventions referred to in sub-section (5) of section 38, such authority shall, by an order in writing impose penalty under that sub-section for such amount as he deems just and reasonable.

(6) The authorised officer shall serve upon the person on whom penalty is imposed under sub-rule (5) a notice in Form 50 directing him to pay the amount of penalty imposed in the manner referred to in sub-section (5) of section 38, specifying in the said notice the date by which payment shall be made and the date by which the receipted challan in proof of such payment shall be produced.