(1) In respect of any amount found payable by a dealer under sub-section (4) of section 50, the assessing authority shall serve on the dealer a notice of demand in Form VAT -313 directing the dealer to pay the amount, within thirty days from the date of service of the notice and to produce the proof of payment of such amount within seven days from the date of payment.

(2) If the dealer fails to pay the amount due or has failed to produce the evidence of payment by the due date in accordance with the notice in Form VAT -313, the assessing authority may impose a penalty under sub-section (5) of section 50 and serve a notice in Form VAT-314 directing the dealer to pay the penalty within thirty days from the date of service of the notice along with the outstanding tax, penalty, interest or any other due under the Act immediately and to produce the receipted challan as proof of payment of such amount within seven days from the date of such payment.

(3) Where the collection of the amount referred to in sub-rule (1) or any part thereof has been stayed on appeal or revision, penalty under sub-section (5) of section 50 may be levied if the amount is not paid and proof of such payment is not produced within a fortnight after the expiry of the period for which, such amount was covered under stay.

(4) Where stay on collection until disposal of appeal or revision has been ordered, the stay period shall be deemed to have expired on the date of disposal of such appeal or revision and where in such cases, the appeal or revision results in a reduction or enhancement in the amount of demand, a revised notice of demand in Form VAT -315 shall be issued directing the dealer to make payment in accordance with such revised notice within fourteen days from the date of service of the notice and to produce the proof of payment thereof within seven days from the date of payment.

(5) No penalty under sub-section (5) of section 50 shall be imposed until the expiry of the time limit specified in the revised notice referred to in sub-rule (4).