Updated under Sales Tax Rules, 2006 (Tax Year 2026)
The Sales Tax Rules, 2006, as updated for tax year 2026, prescribe a comprehensive legal framework for the attachment and sale of movable property of sales tax defaulters by officials of the Federal Board of Revenue (FBR). These rules ensure due process, proportionality, and transparency in recovery proceedings.
This article explains the step-by-step procedure, rights of taxpayers, and exemptions under Rules 88 to 111A.
📌 When Can FBR Attach Movable Property?
FBR may initiate attachment proceedings after service of a recovery notice, where government dues remain unpaid within the prescribed period.
🔍 Step-by-Step Procedure for Attachment of Movable Property
1. Issuance of Warrant of Attachment (Rule 88)
• Recovery Officer issues a written warrant (Form STR-19)
• Must include:
o Name of defaulter
o Amount of government dues
o Official signature and seal
2. Service of Warrant (Rule 89)
• Copy served personally on defaulter or agent
• If not possible, service is deemed complete when:
o Affixed on the notice board of the Recovery Officer
3. Attachment After Non-Payment (Rule 90)
• If dues are not paid immediately after service:
o Officer proceeds to attach movable property
• 🚫 Standing crops and agricultural produce are excluded
4. Mode of Attachment (Rule 91)
• Attachment is made by actual seizure
• Officer must inform the possessor in writing, stating reasons
5. Search and Seizure Rules (Rules 92–94)
• Searches conducted under CrPC, 1898
• Officer may break open premises if property is concealed
• Women must be given reasonable time to withdraw
• Seizure allowed only between sunrise and sunset
• Inventory prepared and signed by two witnesses
6. Proportionality of Seizure (Rule 95)
• Seizure must not be excessive
• Property value should be proportionate to tax dues
7. Property That Cannot Be Removed (Rule 96)
• Officer may issue prohibitory order instead of seizure
• Written reasons must be sent to the Recovery Officer
8. Storage of Seized Goods (Rule 97)
• Goods delivered to:
o Authorized Sales Tax Officer, or
o Nearest Custom House
💼 Special Types of Movable Property
Negotiable Instruments (Rule 98)
• Attached by actual seizure
• Produced before Recovery Officer
Property in Custody of Public Officer (Rule 99)
• Attached via written notice to the concerned officer
Share in Movable Property (Rule 100)
• Defaulter prohibited from transferring his share
Partnership Interest (Rule 101)
• Recovery Officer may:
o Charge partner’s share
o Appoint receiver
o Order sale
• Other partners have right of redemption
🛒 Sale of Attached Movable Property
Order for Sale (Rule 102)
• Only property necessary to satisfy dues is sold
• Sale stops once dues are fully recovered
Proclamation of Sale (Rule 103)
• Issued in Urdu, English, and provincial language
• Publicized through:
o Notice boards
o Designated locations
o Newspapers via auctioneer
Waiting Period (Rule 104)
• Sale after 15 days, unless:
o Property is perishable
o Storage cost exceeds value
Modes of Sale
• Public Auction – Customs Rules, 2001 (Rule 105)
• Tender or Sealed Bids (Rule 106)
• Broker Sale for shares or instruments (Rule 110)
Preference to Co-Owner (Rule 107)
• Equal bids → co-owner gets priority
Transfer of Title (Rule 108)
• Sale certificate issued
• Sale becomes final and absolute
Minor Irregularities (Rule 109)
• Sale not invalidated if rules are substantially complied with
🪙 Special Order for Cash (Rule 111)
If seized property includes currency or coins, Recovery Officer may directly transfer required amount to the referring authority.
🚫 Exemptions from Attachment (Rule 111A)
The following cannot be attached or sold:
• Basic household items and women’s personal ornaments
• Tools of artisans and essential agricultural implements
• Agriculturist’s residence
• Books of account
• Pension, gratuity, provident fund amounts
• Government salary exemptions
• Right to sue, personal services, future maintenance
📌 Bank account attachment is governed by Income Tax Rules 210A–210I, applied mutatis mutandis.
❓ Frequently Asked Questions (FAQs)
Can FBR attach agricultural produce?
No. Standing crops and produce of self-cultivated land are exempt.
Can sale take place immediately after seizure?
No. A 15-day notice period is mandatory unless exceptions apply.
Are bank accounts covered under these rules?
Yes, through cross-application of Income Tax Rules, 2002.
📘 Conclusion
The Sales Tax Rules, 2006 (2026 update) establish a structured and lawful mechanism for recovery of sales tax arrears through attachment and sale of movable property. While empowering FBR officials, the rules also safeguard taxpayer rights through exemptions, proportionality, and procedural transparency.
Disclaimer
This article is intended for general informational purposes only and does not constitute legal, tax, or professional advice. While every effort has been made to ensure accuracy based on the Sales Tax Rules, 2006 (updated for tax year 2026), laws and procedures may change, and their application may vary based on specific facts and circumstances. Readers are advised to consult a qualified tax professional or legal advisor or refer to official FBR notifications before taking any action.