16. Notice of demand

(1) In respect of any amount found payable by a dealer the Commissioner shall serve on the dealer a notice of demand in Form VII and shall fix a date for payment, such date not being less than thirty days from the date of service of the notice and also a date on which the dealer shall produce the receipted challan in proof of payment of such amount :

Provided that the Commissioner may, in respect of any particular dealer and for the reasons to be recorded in writing, extend the date of such payment or allow such dealer to pay the tax due and penalty, if any, by instalments.

(2) If, on the date fixed under sub-rule (1) the dealer has not paid the amount due or has failed to produce evidence of payment by the date fixed in the notice in Form VII the Commissioner may impose a penalty not exceeding one-half of the total amount due and serve a notice in Form VIII directing the dealer to pay the penalty together with sums previously due by a date to be fixed in the notice and to produce the receipted challan in proof of payment of such amount by a date also to be specified in the said notice :

Provided that in cases of continuing default the penalty may be levied in instalments from time to time so however as not to exceed one-half of the total amount of tax due :

Provided further that if collection of the sum specified in the notice of demand in Form VII or any part thereof has been stayed on appeal or revision, penalty may be levied if the sum is not paid and proof of such payment is not produced before the Sales Tax Officer within a fortnight after the expiry of the stay period.

Explanation.- Where stay of collection until disposal of appeal or revision has been ordered, the stay period shall be deemed to have expired on the date of disposal of such appeal or revision and where in such cases the appeal or revision results in a reduction or increase in the sum demanded, a revised notice of demand in Form VIII will issue and no penalty shall be levied until expiry of the time-limit specified in the said revised notice.

(3) In case a dealer makes default in payment of the tax together with the penalty, if any, in accordance with the notice issued under sub-rule (1) by the date of expiry of the period allowed under the said sub-rule, he shall be liable to pay interest on the aforesaid amount at the rate of six per centum per annum from the date aforesaid for the first three months and thereafter at the rate of twelve per centum per annum :

Provided that where any appeal or revision or reference has been preferred the interest as aforesaid shall be payable from the date specified above on the tax together with the penalty, if any, ultimately found due from the dealer :

Provided further that in case the tax together with the penalty, if any, assessed on the dealer is enhanced in such appeal, revision or reference the interest on the excess amount shall be payable from the date by which the dealer is required to make payment of such excess amount.