Can my shop be sealed for not registering or paying advance tax under the traders' scheme?

Sealing of a shop is a penalty written directly into the Income Tax Ordinance for traders who stay out of a section 99B scheme. It sits in the Table of offences and penalties in section 182, as serial 3A, which the Finance Act, 2024 inserted.

What does the law say?

Section 182(1) says a person who commits an offence in column (2) of the Table is liable to the penalty in column (3), “in addition to and not in derogation of any punishment to which he may be liable under this Ordinance or any other law”. Two entries matter to a shopkeeper who has not joined a traders’ scheme:

Serial	Offence (column 2)	Penalty (column 3)	Section referred to (column 4)
3	Any person who is required to apply for registration under this Ordinance but fails to make an application for registration	Penalty of ten thousand rupees	181
3A	Any person being a trader or a shopkeeper who is required to apply for registration under this Ordinance but fails to register or fails to pay advance tax as specified in a scheme of special procedure prescribed under section 99B	The shop shall be sealed for seven days for first default and for twenty one days for each subsequent default	99B

Serial 3 links to section 181, which requires every taxpayer to apply “in the prescribed form and in the prescribed manner for registration”. Serial 3A links to section 99B, which lets the Board prescribe, by gazette notification, a special procedure for small traders and shopkeepers in specified cities or territories.

When does serial 3A apply?

Reading the column (2) text, three conditions must be met:

1. The person is a trader or a shopkeeper.
2. The person is required to apply for registration under the Ordinance.
3. The person either fails to register, or fails to pay advance tax as specified in a section 99B scheme.

The scheme itself decides which traders, in which cities, must register and what advance tax they pay. The notification setting out any scheme is not part of the corpus held here, so whether a particular shop falls within it cannot be answered from the Ordinance alone.

How long is the shop sealed?

• First default: seven days.
• Each subsequent default: twenty one days.

The Table does not say what counts as a separate default (for example, each missed payment, or each notice not complied with), who carries out the sealing, or what procedure is followed. It also does not state a money penalty in serial 3A. If the scheme notification deals with these points, it is not held here.

Worked example (illustrative scenario)

Imran runs a hardware shop in a city named in a section 99B scheme notification. Assume, for the example, that the scheme requires shopkeepers like him to register and pay monthly advance tax.

Event	Serial applied	Result under the Table
He fails to register under the scheme	3A	Shop sealed for 7 days (first default)
Later he registers but fails to pay the advance tax the scheme requires	3A	Shop sealed for 21 days (a subsequent default)
He fails to pay again at a later point	3A	Shop sealed for 21 days (each subsequent default)

On these assumed facts, the total sealing across the three defaults would be 7 + 21 + 21 = 49 days. Separately, serial 3 provides a penalty of Rs. 10,000 for a person required to apply for registration who fails to make an application.

Can both serial 3 and serial 3A apply?

The Table lists them as separate offences with separate penalties, and section 182(1) says a penalty is “in addition to and not in derogation of” any other punishment under the Ordinance. The Ordinance does not say in so many words whether a failure to register under a 99B scheme attracts both the Rs. 10,000 and the sealing. That question is not resolved here.

What if my shop is sealed for a sales tax reason instead?

Sealing also appears elsewhere, for example for Tier-1 retailers who fail to integrate their point of sale with the Board’s computerized system. Those are separate rules with their own conditions and are covered on other pages. Serial 3A is only about section 99B schemes.

Common mistakes

• Thinking sealing is only a sales tax penalty. Serial 3A puts it in the Income Tax Ordinance for 99B scheme defaults.
• Assuming every unregistered shop can be sealed under serial 3A. The entry is tied to a scheme prescribed under section 99B.
• Assuming the second sealing is also seven days. Every default after the first is twenty one days.

What to check in the official text

Read serials 3 and 3A of the Table in section 182(1) of the Income Tax Ordinance amended to 30 June 2026, section 181, and section 99B as printed in the section 99 area. Check the section 99B notification that applies to your city for who must register, what advance tax is due, and any procedure it sets out. That notification is not held in this corpus.