(1)

The registering authority shall have power for good and sufficient reasons to demand from time to time from any registered dealer or from a dealer, who has applied for registration under this Act, security or as the case may be, additional security for proper payment of tax and such other amount as may be due, for an amount not exceeding one-half of the tax payable on the turnover of the dealer for the year or as estimated by the registering authority.

(2)

The whole or a part of the security furnished by a dealer may be adjusted towards any amount due under this Act or rules framed thereunder:

Provided that the dealer shall be given an opportunity of being heard before the adjustment of the security furnished by him.