(1) Where any registered dealer has claimed input tax credit or input tax for a period without entering into a valid transaction of purchase with another registered dealer in West Bengal resulting in claim of a higher amount of input tax credit or input tax rebate than is admissible to him, the Commissioner may, by way of a separate proceeding independent of any scrutiny, verification, audit, assessment, appeal, revision or review for such period and after giving in the prescribed manner, a reasonable opportunity of being heard to such dealer, impose, in addition to any tax levied or leviable or penalty imposed or imposable under this Act for such period, by an order in writing, a penalty of a sum calculated at such per centum, not less than twenty-five per centum and not exceeding one hundred fifty per centum, as specified in sub-section (2), of the amount of input tax credit or input tax rebate claimed in excess than is admissible to him:

Provided that no penalty under this section shall be imposed if action has been taken under sub-section (3) of section 22, or penalty has been imposed under section 96, on such dealer, for the same facts and vice versa.

(2) For the purposes of imposition of penalty under sub-section (1), the per centum shall be as follows:-

(a) at the rate of twenty-five per centum where the dealer admits in writing the fact of such ineligible claim of input tax credit or input tax rebate and pays the full amount of tax involved in such ineligible claim along with interest thereon within one month of inspection or enquiry leading to detection of such ineligible claim, or within one month of initiation of the proceeding for such period for imposition of penalty under sub-section (1), or within one month of initiation of the proceeding for assessment or appeal or revision or review for such period, as the case may be, whichever is earlier;

(b) at the rate of one hundred fifty per centum in all other cases:

Provided that a dealer may make application within the period mentioned in clause (a) to the Commissioner, with proof of payment of thirty per centum of the full amount of tax involved in such ineligible claim of input tax credit or input tax rebate as admitted in writing, for granting of instalment for payment of the balance amount of such tax along with interest, and upon such application by the dealer the Commissioner may allow such dealer to make payment of the balance admitted amount of tax involved in such ineligible claim along with interest thereon in monthly instalments of not more than ten months and upon payment of the full admitted amount of tax involved in such ineligible claim along with interest thereon, penalty under the sub-section (1) shall be imposed at the percentage specified in clause (a):

Provided further that if the dealer fails to pay the full amount of tax as per the instalment granted under the first proviso, then the penalty under sub-section (1) shall be imposed at the rate of one hundred fifty per centum of the amount of tax involved in such ineligible claim:

Provided also that if it is found that the amount of tax involved in such ineligible claim of input tax credit or input tax rebate by a dealer is in excess of the amount admitted in writing by the dealer under clause (a), then penalty under sub-section (1) shall be imposed at the rate of one hundred fifty per centum of that part of the amount of tax involved in such ineligible claim of input tax credit or input tax rebate which has not been admitted by the dealer in writing.

Nothing contained in the above-mentioned provisions shall be construed to affect liability of the dealer to pay interest under the Act by grant of instalment for payment of the admitted amount of tax by the dealer.