8. Penalty for non-submission of return

(1) If a registered dealer fails, without any reasonable cause, to furnish a return, except that for the month of February, within a fortnight of the due date as provided in rule 7 and the return for the month of February, on or before the due date, the Commissioner may serve on such defaulting dealer a notice in form II calling upon him to show cause by a date to be specified in the notice why a penalty shall not be levied on him.

(2) If after considering the explanation of the dealer and giving him a personal hearing, if necessary, the Commissioner is not satisfied that default was due to reasonable cause he shall pass an order levying penalty and serve it on the dealer together with a notice of demand in Form VII :

Provided that a penalty under this rule may not exceed 1/10th per centum of the tax due or Rs. 5 for every day after the due date during which the dealer fails to submit the required return, whichever is greater.