(1) Every application for exercising option for payment of compounded tax under section 8 shall be in Form No. 1 D and shall be filed before the assessing authority on or before the 30th day of April every year:

Provided that in case of dealers who become liable to registration under the Act during the course of the year, such option shall be filed along with the application for registration.

(2)(i) If the assessing authority is satisfied that the application filed is in order, it shall grant permission in Form No.4 D

(ii) If the application filed is not in order, the assessing authority shall reject the application, for reasons to be recorded in writing, after giving the dealer an opportunity of being heard.

(3) Where a works contractor who has opted for payment of compounded tax under section 8 becomes ineligible for payment of tax under that section, he shall inform the assessing authority within ten days of his becoming so ineligible. Thereupon he shall be liable for payment of tax in accordance with the provisions of sub-sections (1) and (2) of section 6 in respect all contracts entered into subsequent to the date from which he has become so ineligible.