(1) where a dealer registered under the Act, fails to submit any of the statements, accounts, audit reports or declarations, as the case may be, referred to in sub-section (1) or sub-section (1C), of section 30E, and where it appears to the appropriate assessing authority that such default was without any reasonable cause and such dealer is liable to pay penalty under sub-section (2) of section 30E, such assessing authority shall serve a notice in Form no. 8 directing him to appear in person or through his agent and show cause on the date, time and at the place specified in such notice, as to why a penalty as proposed in the notice shall not be imposed on him.

(2) The appropriate assessing authority shall fix a date of hearing ordinarily not less than fifteen days from the date of issue of such notice.

(3) The registered dealer, may, if he so wishes, prefer in writing any objection to imposition of penalty on or before the date of hearing or adduce such evidence as he likes to produce in support of his contention on such date of hearing.

(4) 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, by an order in writing, impose such amount of penalty under sub-section (2) of section 30E on such dealer as he deems fit and proper.

(5) The appropriate assessing authority shall serve a notice in Form no. 9 upon the dealer directing him to pay the amount of penalty so imposed by the order referred to in sub-rule (3) and specifying the date, not less than twenty days after the service of the notice, by which the payment shall be made and the date by which the receipted challan in proof of such payment shall be produced before the said authority.