37. Collection of tax only by dealer liable to pay tax

(1) No dealer who is not liable to pay under this Act shall collect, in respect of any sale of goods by him, any amount of tax under this Act, and no dealer, who is liable to pay tax under this Act, shall, make any such collection except in accordance with the provisions of this Act or in excess of the amount of tax payable by him under this Act :

PROVIDED that the provisions of this sub-section shall not apply to any dealer who avails of the benefit of exemption from payment of tax under section 39 or the benefit of remission of tax under section 41, section 42 or section 43.

(2) If any dealer contravenes the provisions of sub-section (1), he shall, notwithstanding anything contained elsewhere in this Act, deposit the amount collected by way of tax or the amount collected by way of tax in excess of the amount payable under this Act, as the case may be, into a Government Treasury or the Reserve Bank of India within thirty days from the date of such collection and intimate the Commissioner of such deposit along with a receipt from such Treasury or Bank showing payment of such amount.

(3) The Commissioner shall, on application made by the buyer in respect of sales of goods to him referred to in sub-section (1) and such terms and conditions as he may deem fit and proper, refund to such buyer the tax or the excess tax, as the case may be, collected from such buyer and deposited by the dealer in the manner referred to in sub-section (2) :

PROVIDED that no application from any buyer shall be entertained unless the same is made within twelve months from the date on which the tax or excess tax, as the case may be, is paid and supported by relevant cash memo or bill issued by the dealer.

(4) If a dealer is in default in depositing in accordance with the provisions of sub-section (2) the amount collected in contravention of the provisions of sub section (1), the Commissioner may, after giving such dealer a reasonable opportunity of being heard, by an order in writing direct that he shall pay by way of penalty a sum, not less than the amount of tax so collected and not exceeding twice the amount of tax so collected by him in contravention of the provision of sub-section (1).

(5) The penalty imposed under sub-section (4) shall be paid by the dealer into a Government Treasury or the Reserve Bank of India by such date as may be specified by the Commissioner in a notice issued for the purpose and the date to be so specified shall not be less than fifteen days from the date of service of such notice.

(6) Any penalty that remains unpaid after the date specified in the notice referred to in sub-section (5) shall be recoverable in accordance with the provisions of section 52.