(1) The registering authority, for good and sufficient reasons and for ensuring lawful conduct of a registered dealer and safe custody of waybills or any other forms issued under the Act and these rules may require such dealer, to pay within fourteen days from the date of receipt of the notice in Form VAT-104, a reasonable security or additional security as demanded for the purpose.

(2) Omitted w.e.f. 01-05-2013.

(3) The security or additional security as referred to in sub-rule (1), shall not exceed the tax estimated to be payable by the dealer for one year.

(4) A dealer may furnish security as required under sub-rule (1) in any of the following manners :-

(a) by depositing as security in the Government Treasury, the amount fixed by the said authority; or

(aa) through e-payment; or

(b) by depositing security amount in the Post Office Savings Bank and pledging the Pass Book and depositing it with the said authority; or

(c) by pledging and depositing with the authority, National Savings Certificate for the amount of security fixed; or

(d) by mortgaging immovable property free from all encumbrances whatsoever, in favour of such authority for the amount of security demanded.

(5) Any security furnished under the repealed Act by a dealer, deemed to have been registered under the Act, shall be deemed to be security for the purposes of the Act:

Provided that any additional security demanded under sub-rule (1) shall be in addition to the security as referred to in this sub-rule.