(1) If the appropriate assessing authority is satisfied that-

(a) the particulars furnished in the application for declaration forms are in order,

(b) the applicant has made born fide use of declaration forms issued to him on the previous occasion, and

(c) the applicant has bona fide requirement of declaration forms applied for,

he shall, subject to the conditions prescribed hereinafter in this rule, issue declaration forms to the applicant as required by him:

Provided that if the appropriate assessing authority is of the opinion that the number of declaration forms applied for is not justified, he may, by making a speaking order, issue forms in such number as would satisfy the immediate requirement of the applicant.

(2) If the appropriate assessing authority is satisfied that the particulars furnished in the application for declaration forms are incorrect, or the applicant has not made bona fide use of declaration forms issued to him on the previous occasions, or that the applicant has no bona bide requirement of declaration forms applied for or that the applicant has failed to comply with an order demanding security from him under section 26, he shall, after giving the applicant a reasonable opportunity of being heard, reject such application by an order in writing.

(3) If the applicant at the time of making an application for declaration forms, has defaulted in-

(a) furnishing any return under the Act or under the Central Sales Tax Act. 1956 (74 of 1956) together with receipted challan showing payment of tax payable according to such return for the furnishing of which the prescribed date or the date extended by the Commissioner has expired, or

(b) furnishing any receipted challan showing payment of interest payable by him under section 33, or

(c) furnishing any receipted challan showing payment of late fee payable by him under subsection (2) of section 32,

the appropriate assessing authority shall, after giving reasonable opportunity to the applicant or his authorised representative of being heard, withhold, by an order in writing, the issue of declaration forms to him until such time as the dealer furnishes return together with the receipted challan showing payment of tax, interest and late fee according to such return:

Provided that where the dealer gives an undertaking to the appropriate assessing authority that he shall pay up arrears of tax, interest and late fee referred to in clause (a), clause (b) and clause (c) in one lump sum or in instalments, such authority may, instead of withholding issue of declaration forms, subject to such terms and conditions as he may think fit, issue declaration forms in such number as may satisfy, in his opinion, the immediate requirement of the dealer.

(4) If, on the basis of information available upon scrutiny or on verification of any return furnished by the applicant dealer under the Act or under the Central Sales Tax Act, 1956 (74 of 1956), the appropriate assessing authority, or any other person appointed under sub-section (1) of section 6 and authorised by the Commissioner to deal with application for issue of declaration forms, is satisfied that the applicant dealer has furnished incorrect statement of his turnover of sales, or turnover of purchases of goods, or incorrect particulars or nature of his sales or purchases of goods, or incorrect statement of contractual transfer price, or incorrect particulars or nature of contractual transfer price, or otherwise incorrect information about his tax liability, in such return resulting in short computation of output tax or short payment of net tax, such appropriate assessing authority, or any other person appointed under sub-section (1) of section 6 and authorised by the Commissioner to deal with application for issue of declaration forms, shall, for reasons to be recorded in writing, withhold the issue of declaration forms to the applicant dealer until such time as he furnishes a receipted challan from the Government treasury or the Reserve Bank of India or through electronic clearance system showing payment of that much amount of tax he has withheld by furnishing such incorrect statement of his turnover of sales, or turnover of purchases of goods, or incorrect particulars or nature of his sales or purchases of goods, or incorrect statement of contractual transfer price, or incorrect particulars or nature of contractual transfer price, or otherwise incorrect information about his tax liability, in such return.

(5) Where the appropriate assessing authority does not pass any order rejecting any application for declaration forms under sub-rule (2), or withhold the issue of declaration forms on any application under sub-rule (3), or sub-rule (4), he shall issue the required number of declaration forms or such number of declaration forms as it may, in his opinion, satisfy the immediate requirement of declaration forms of the applicant.

(6) Notwithstanding any order passed, or action taken, by the appropriate assessing authority withholding issue of declaration forms under sub-rule (3), or sub-rule (4) on the application referred to in sub-rule (1), the Commissioner or any officer, not being the appropriate assessing authority, authorised in this behalf by the Commissioner, may, for reasons to be recorded in writing, proceed to dispose of the said application for declaration forms, or direct the appropriate assessing authority by an order to issue such number of declaration forms of such categories in such manner and within such time and on fulfillment of such terms and conditions by the applicant as may be specified in the order.