(1) The amount of security that may be demanded from a dealer under clause (a) of sub-section (12) of section 17 shall be 

(i) the highest amount of tax payable by such dealer in any quarter of the previous year subject to maximum of rupees one lac ;

(ii) where there is no previous year, upto rupees twenty thousand.

(2) Security shall be in the form of FDR or bank guarantee or equitable mortgage of immovable property.

(3) Subject to the provisions of sub-rule (4), the security obtained from a dealer under sub rule (1) shall be held for a period of 2 years.

(4) If the dealer, other than a dealer who has obtained a registration certificate under clause (c) of sub-section (2) of section 17, complies with the requirement of the Act during the said period, security shall be released.