(1) If any dealer,-

(a) has not furnished annual return in respect of any period by the prescribed date; or

(b) has knowingly furnished incomplete or incorrect annual return or statement for any period; or

(c) has failed to comply with the terms of any notice under sub-section (1) or sub-section (3) of section 36; or

(d) has not maintained any accounts or has failed to maintain accounts in accordance with the provisions of this Act or has not regularly employed any method of accounting or the method employed is such that in the opinion of the Prescribed Authority assessment cannot properly be made on the basis thereof,

the Prescribed Authority shall, after issue of a notice to the dealer in the prescribed form and in the prescribed manner, so as to give him a reasonable opportunity of being heard, assess him to the best of his judgment.

(2) If the Prescribed Authority is satisfied that the dealer, in order to evade or avoid payment of tax,-

(a) has failed to furnish without reasonable cause, returns in respect of any period by the prescribed date; or

(b) has furnished incomplete and incorrect returns for any period; or

(c) has availed himself of tax credit to which he is not entitled; or

(d) has failed to keep up-to-date account; or

(e) has issued false or incorrect tax invoice,

he may, after giving the dealer a reasonable opportunity of being heard, direct that the dealer shall pay, by way of penalty, a sum not exceeding twice the amount of,--

(i) tax assessed in a case falling under clause (a); or

(ii) additional tax assessed on account of the cases falling under clause (b), clause (c), clause (d) and clause (e).