4. Security.-

(1) The security or additional security required to be furnished under section 15 for registration may be in the following forms, namely :-

(a) cash deposit or Post Office Saving Account or Scheduled Bank's Saving Bank Account Pass Book or fixed deposit receipt duly pledged to the Assessing Authority or bank guarantee from a Scheduled bank; or

(b) personal bond with two solvent sureties to the satisfaction of the appropriate Assessing Authority and executed in Form VAT-III on a non-judicial paper of the appropriate value.

(2) The security furnished under sub-rule (1) shall be maintained in full so long as the registration certificate continues to be in force. If the amount of security already determined is rendered inadequate, the Assessing Authority may at any time and for sufficient reasons demand additional security.

(3) Where the security or additional security furnished by a person is in the form of Bank Guarantee, the person furnishing such guarantee shall get the same re-validated atleast thirty days before the date of its expiry.

(4) Where the security or additional security furnished by a person is in the form of a surety bond and the surety becomes insolvent or is otherwise incapacitated or dies or withdraws, the person shall, within fifteen days of the occurrence of any of these events, inform the authority granting the registration, and shall within thirty days of such occurrence, furnish a fresh security or additional security for the like amount.

(5) In the event of default in payment of any tax, interest or penalty due, the security or additional security furnished by the dealer under sub-rule (1) shall be liable to forfeiture and adjustment, by the Assessing Authority, towards recovery of such tax, interest or penalty after intimation to him and the deficiency in the amount of security or additional security shall be made up by the dealer within a period of thirty days from the date of such intimation.