Compounding of tax liability in certain cases

(1) Notwithstanding anything to the contrary contained in this Act, the State Government may, by notification and subject to such conditions and restrictions as may be prescribed, permit any class of registered dealers whose gross turnover does not exceed the limit specified in the notification to pay in lieu of the tax payable by them, an amount calculated at such rate not exceeding four percent of his gross turnover as may be specified in the notification issued in this behalf: Provided that no such permission shall be granted to a manufacturer or a person who imports any goods from any place outside the State for the purpose of his business: provided further that the amount so specified shall be in addition to any tax that may be payable by the dealer under section 10. (2) Dealers to whom the provisions of sub-section (i) apply shall (a) not charge any tax on the sale of goods specified in Schedule I (b) not charge in excess of the rates specified in the notification issued under sub-section (1), and (c) not be entitled to issue tax invoices in respect of sales effected by them (3) If reasonable grounds exists to believe that the dealer was not eligible to pay tax at a fixed rate under sub-section (1), the assessing authority shall, without prejudice to any action which is or may be taken under section 81, impose a penalty equivalent to three times the amount of tax arrived at after applying the rate specified under section 12 to the gross turnover of the dealer after deducting the value of sales of goods mentioned in Schedule I of that section: provided that no order under this sub-section shall be passed without giving the dealer a reasonable opportunity of being heard.