(1) Where a dealer fails to make payment of the tax due and interest thereon along with the return or revised return furnished for any tax period, a notice in Form VAT-205, requiring such dealer to show cause within fourteen days from the date of receipt of the notice, shall be served upon him.

(2) Where the dealer fails to respond to such notice or explain the default in payment of tax or interest or both to the satisfaction of the authority issuing the notice under sub-rule (1), penalty shall be imposed under sub-section (2) of section 34 and an order shall be issued in Form VAT-206.

(3) The penalty imposed under sub-rule (2) shall be paid by way of a receipted challan from the Government Treasury or crossed demand draft or banker' cheque, in favour of the Assistant Commissioner or Sales Tax Officer of the range or circle, as the case may be.