Income Tax Ordinance, 2001 — Section 138: Recovery of tax out of property and through arrest of taxpayer

7[138. Recovery of tax out of property and through arrest of taxpayer.— (1) For the purpose of recovering any tax due by a taxpayer, the Commissioner may serve upon the taxpayer a notice in the prescribed form requiring him to pay the said amount within such time as may be specified in the notice.

(2)If the amount referred to in the notice issued under sub-section (1) is not paid within the time specified therein or within the further time, if any, allowed 1 Inserted by the Finance Act, 2003. Earlier this was inserted by S.R.O. 633(I)/2002, dated 14.09.2002 which stands rescinded by SRO 608(I)/2003, dated 24.06.2003 with effect from 01.07.2003. 2 Inserted by the Finance Act, 2003. 3 The words “any tax due” substituted by the Finance Act, 2003. 4 The word s “additional tax” substituted by the Finance Act, 2010. 5 The brackets and figure “(1)” substituted by the Finance Act, 2003. 6 Sub-section (7) omitted by the Finance Act, 2002. The omitted sub-section (7) read as under: “(7) A taxpayer dissatisfied with a decision under sub-section (4) may challenge the decision only under Part III of this Chapter.” 7 Section 138 substituted by Finance Act, 2002. The substituted section 138 read as follows: “138. Tax as a debt due to the Federal Government.- (1) Any tax due under this Ordinance by a taxpayer shall be a debt due to the Federal Government and shall be payable in the manner and at the place prescribed.

(2)Any tax that has not been paid by the due date may be sued for and recovered in any court of competent jurisdiction by the Commissioner acting in the Commissioner’s official name.

(3)In any suit under sub-section (2), the production of a certificate signed by the Commissioner stating the name and address of the taxpayer and the amount of tax due shall be conclusive evidence of the amount of tax due by such taxpayer.” 284 Chapter X – Procedure by the Commissioner, the Commissioner may proceed to recover from the taxpayer the said amount by one or more of the following modes, namely:

(a)attachment and sale of any movable or immovable property of the taxpayer;

(b)appointment of a receiver for the management of the movable or immovable property of the taxpayer; 1[ ]

(c)arrest of the taxpayer and his detention in prison for a period not exceeding six months 2[; and

(d)as specified under clauses (a), (ca) and (d) of sub-section (I) of section 48 of the Sales Tax Act, 1990.]

(3)For the purposes of recovery of tax under sub-section (2), the Commissioner shall have the same powers as a Civil Court has under the Code of Civil Procedure, 1908 (Act V of 1908), for the purposes of the recovery of any amount due under a decree. 3[(3A) Notwithstanding anything contained in this Ordinance or any other law or any rule, any decision or judgment of any court, forum or authority, the tax payable under any provision of this Ordinance or any assessment order shall become immediately payable subject to the following conditions

(a)that the case has been decided in the favor of the department at three appellate forums including the High Court;

(b)that the recovery under this section shall only be made to the extent of lowest amount of demand which has been confirmed by any of the three appellate forums; and

(c)that the tax payable exceeds rupees two hundred million, and the Commissioner shall proceed to recover the said amount irrespective of the time provided under any other provision or the said decision or judgment.]

(4)The 4[Board] may make rules regulating the procedure for the recovery of tax under this section and any other matter connected with, or incidental to, the operation of this section.] 1 The word “and” omitted through Finance Act, 2020 dated 30th June, 2020 2 Full stop substituted by “semi colon” and the word “and” thereafter new clause (d) added through Finance Act, 2020 dated 30th June, 2020 3 Sub-section (3A) inserted by the Finance Act, 2025. 4 The words “Central Board of Revenue” substituted by the Finance Act, 2007. 285 Chapter X – Procedure