12. Furnishing of security.

(1) A dealer applying for registration under the Act shall furnish along with the application for registration a security in the manner referred to in clauses (ii) and (iii) of sub-rule (2), not exceeding rupees fifty thousand :

Provided that the amount of the security shall not exceed rupees ten thousand in case the person provides any three of the following documents, namely:-

(a) last paid electricity bill in his name or his parent’s name or his spouse’s name,

(b) last paid telephone bill in his name or his parent’s name or his spouse’s name,

(c) the Permanent Account Number (PAN) issued under the Incometax Act, 1961,

(d) any document as proof of ownership of principal place of business in his name or his parent’s name or his spouse’s name,

(e) any document as proof of ownership of residential property or any immovable property in his name or parent’s name or his spouse’s name,

(f) notarized photocopy of the passport of proprietor or managing partner or managing director,

(g) certificate obtained from a local authority in respect of shop and establishment, or;

(h) registration certificate obtained from Custom and Central Excise Authority:

Provided that the authority who receives such application of registration shall first verify the application in accordance with the provision of sub-section (1) of section 28 and pass such an order of demanding security as provided under this rule after giving the dealer a reasonable opportunity of being heard.

(2) Where a dealer is required to furnish security or additional security under section 28 or, as the case may be, a person or a dealer required to furnish security under proviso to sub-section (4) of section 73 or under the second proviso to sub-rule (5) of rule 45, shall,-

(i) furnish a bond executed by himself in Form 105 with one surety acceptable to the authority who passes the order under the provisions referred to above for such sum as the authority may specify in the order, or

(ii) deposit the cash in the Government Treasury, Government securities in the form of stock certificates or Government Promissory Notes of a market value of not less than the sum as may be specified in the order or National Savings Certificate or Treasury Savings Certificate of the face value of not less than the said sum, duly endorsed in favour of the Commissioner, or

(iii) furnish the guarantee of a Bank approved by the Commissioner in this behalf, agreeing to pay to the Commissioner on demand, such sum not exceeding the amount as may be specified in the order:

Provided that for the purpose of furnishing security other than the security under sub-section (4) of section 73, dealer may furnish security in any of the mode prescribed in clause (ii) or (iii):

(3) Where, by reason of an order made under sub-section (6) of section 28, the security furnished by any dealer is rendered insufficient, he shall make up the deficiency by furnishing security or, as the case may be, additional security in the manner specified in sub-rule (2), within thirty days from the date of such order.

(4) Where the bank guarantee furnished by the dealer is for a specified period, the dealer shall furnish a fresh bank guarantee or any other security specified in sub-rule (2) before the expiry of the said bank guarantee.

(5)The provisions contained in sub-rules (1) to (4) above shall not apply in case of Tatkaal Registration under rule 6A