57. Penalty for unauthorized/excess collection of tax

(1) No dealer shall collect any sum by way of tax, in respect of sale or purchase of any goods which are not liable to tax under the Act.

(2) No person, other than a dealer, shall collect on the sale or purchase of any goods any sum by way of tax from any other person and no dealer shall collect any amount by way of tax at a rate or rates exceeding the rate or rates at which he is liable to pay tax under the provisions of the Act.

(3) Nothing in sub-section (2) shall apply to a person where he is required to collect separately any amount of tax under the provisions of any other law for the time being in force.

(4) If any person collects tax in contravention of the provisions of sub-section (1) or (2) any sum so collected shall be forfeited either wholly or partly to the Government and in addition he shall be liable to pay a penalty of an amount equal to the amount of tax so collected:

Provided that the authority prescribed shall not levy penalty if it is evident that due to bonafide mistake the dealer collected tax in contravention of sub-section (1) or (2) and the tax so collected in excess\has been remitted to the Government along with the tax payable for that month:

Provided further that the authority prescribed shall while imposing the penalty or forfeiture, take into consideration the amounts refunded to the purchaser from out of the amounts collected, by way of tax in contravention of sub-section (1) or sub-section (2) or for the refund of which satisfactory arrangement has been made.

(5) No order for the forfeiture under this section, shall be made after the expiration of three years from the date of collection of the amount referred to in sub-section (4):

Provided that in computing the said period of three years, the period during which any stay order was in force or any appeal or other proceeding in respect thereof was pending shall be excluded.

(6) If the authority prescribed in the course of any proceeding under the Act, or otherwise has reason to believe that any person has become liable to penalty with or without forfeiture of any sum under sub-section (4) such authority shall serve on such person a notice requiring him on a date and at a place specified in the notice to attend and show cause why a penalty with or without forfeiture of any sum as provided in sub-section (4) shall not be imposed on him. 

(7) The authority prescribed shall thereupon hold an enquiry and shall make such order as he thinks fit.

(8) No prosecution for an offence under this Section shall be instituted in respect of the same facts on which a penalty has been imposed.