(1) Where the Commissioner is satisfied that the turnover of sales or turnover of purchases, as the case may be, of a dealer, exceeded or likely to exceed the taxable limit within such period as referred to in sub-section (2) of section 33, he shall issue a notice to such dealer in Form VAT -204 calling upon him to file return in Form VAT-204-A within fourteen days for such tax period and from the date the dealer is liable or likely to be liable to pay tax, as may be specified in that notice.

(2) If the dealer referred to in sub-rule (1) fails to furnish the return, as required under sub-rule(1), the Commissioner shall issue notice in Form VAT-207 requiring such dealer to show cause within fourteen days from the receipt of the notice, as to why penalty under sub-section (3) of section 34 shall not be imposed, and may proceed to assess the dealer in accordance with the procedure prescribed in rule 51.

(3) In the cases where the dealer fails to respond to the notice issued under sub-rule (2) or comply with the requirement of such notice, penalty shall be imposed under sub-section (3) of section 34 and an order shall be issued in Form VAT-208.