Penalty for failure to register

(1) Any VAT dealer who fails to apply for registration as required under section 17 before the end of the month the application was due and applies during the subsequent month shall be liable to pay a penalty of Rs. 5,000 (rupees five thousand only).

(2) Any dealer who fails to apply for registration as required under section 17 before the end of month subsequent to the month in which the obligation arose shall be liable to pay penalty of 25% of the amount of tax due prior to the date of the registration by the Registering Authority. There shall be no eligibility for input tax credit for sales made prior to the date from which the registration is effected.

(3) Any dealer who fails to notify any change in the circumstances as required under the provisions of the Act or the rules made thereunder, or who fails to apply for cancellation of registration as required under section 19 shall be liable to a penalty of Rs. 2,000 (Rupees two thousand only) for each offence:

Provided that before levying penalty under this section the authority prescribed shall give the dealer a reasonable opportunity of being heard.