Assessment of unregistered dealer liable to tax.

16. If upon information which has come into his possession, the assessing authority is satisfied that any dealer has been liable to pay tax in respect of any period but has failed to apply for registration, it shall, before the expiry of six years following the end of such period, after giving him a reasonable opportunity of being heard, assess, to the best of its judgement, the amount of tax due from him in respect of such period and all subsequent periods and shall direct him further to pay by way of penalty a sum equal to the amount of tax found due as a result of such assessment.

Explanation.- For the purposes of this section, a dealer shall be deemed to have failed to apply for registration, if he makes an incomplete application for registration or, having made an application for registration, fails to comply with any direction given to him by the assessing authority within the time specified by it as a result of which his application has been filed.