4. Security from a taxable and registered person.

 

(1) The security or additional security or further security, as the case may be , required to be furnished for registration, shall be in the form of a bank guarantee from a local scheduled bank or in the form  of a personal bond with two solvent sureties, acceptable to the designated officer, in Form VAT-3.

(2) Where the security or additional security or further security , as the case may be, furnished by a person, is in the form of Bank Guarantee, the person furnishing such Guarantee, shall get the same re-validated at least thirty days before the date of its expiry.

(3)Where the security or additional security or further security, furnished by a person, is in the form of a surety bond and the surety becomes insolvent or is otherwise incapacitated or dies or withdraws, the person shall, within fifteen days of the occurrence of any of these events, inform the designated officer granting the registration, and shall within thirty days of such occurrence, furnish a fresh security for the like amount.

(4) The security already furnished by a person registered under the repealed Act, shall be deemed to be a security furnished under this Act, subject, however, to the confirmation from the sureties within a period of one year from the appointed day. In the event of non-furnishing of such confirmation, a fresh security shall be furnished within a period of one hundred eighty days from the expiry of the said period of one year.

         In the event of default of payment of any amount due under this Act, the security or additional security or further security, as the case may be, furnished by the person, shall be liable to be adjusted towards such amount due, after intimation to such person and the shortfall in amount of such security, shall be made up by such person within a period of thirty days from the date of intimation.