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Penalty for default in depositing amount of tax collected in violation of the law.

134. (1) If any dealer is liable to pay any penalty under sub-section (4) of section 39, the appropriate assessing authority may serve a notice in Form No. 4 upon the dealer proposing levy of a penalty not exceeding such amount as he may specify in the notice and calling upon the dealer to show cause, if any, against the proposed imposition of penalty on the date specified in the notice, and the date of hearing to be fixed shall not be less than twenty days from the date of service of such notice.

(2) After considering the cause, if any, shown by the dealer in pursuance of the notice referred to in sub-rule (1), the appropriate assessing authority may impose such penalty as he may think fit, and serve a notice in Form No. 5 upon him specifying the date, not less than twenty days from the service of the notice, by which the payment of the amount of penalty shall be made, and he shall also fix a date by which the dealer shall produce before him the receipted challan in proof of such payment.