Can FBR cut my shop's electricity or block my bank account for not registering as a Tier-1 retailer?

The Sales Tax Act, 1990 gives FBR a ladder of enforcement steps against a person who should be registered for sales tax but is not. The steps run from cutting gas and electricity (section 14AB), to suspending and then barring bank accounts (section 14AC), to barring the transfer of property (section 14AD), and finally to sealing the business, seizing goods or appointing a receiver (section 14AE).

Who is exposed to these steps?

Two groups of shopkeepers are in the frame. The first is a retailer who is required to register but has not. Section 14(1)(b) requires registration of a retailer who is liable to pay sales tax under the Act or rules, but it excludes a retailer who pays sales tax through the electricity bill under section 3(9). Section 3(9) applies to retailers other than those falling in Tier-1, so a Tier-1 retailer cannot rely on that exclusion.

The second group is a Tier-1 retailer who is registered but has not integrated with the Board’s computerised system. Section 2(43A) defines a Tier-1 retailer by a list of categories; the separate page on what a Tier-1 retailer is covers that list.

What does section 14AB allow?

Section 14AB lets the Board, through a Sales Tax General Order, direct gas and electricity distribution companies to disconnect the gas and electricity connections of:

• (a) any person, including Tier-1 retailers, who fails to register for sales tax; or
• (b) notified Tier-1 retailers who are registered but not integrated with the Board’s Computerized System.

The proviso says that once the person registers or integrates, the Board shall notify restoration of the connection through a Sales Tax General Order. The section opens with “Notwithstanding anything contained in this Act or any other law”, so it overrides other laws. It does not set a hearing step or a time limit for restoration.

How does the bank account bar under section 14AC work?

Section 14AC applies only when three conditions all hold:

1. the Commissioner has reasons to believe the person is supplying taxable goods without registration;
2. the Commissioner has given three consecutive opportunities of being heard to obtain registration; and
3. the person has still failed to register.

The steps then follow in order:

Step	What the law allows	Sub-section
First suspension	Written order to banks to suspend operation of the account for three working days	14AC(2)
Two repeat suspensions	Same suspension repeated two more times, one week apart	14AC(3)
Permanent bar	Written order to permanently bar operation of the bank accounts	14AC(4)
Removal	Order removing the bar within two working days of registration	14AC(5)
Appeal	To the Chief Commissioner Inland Revenue within thirty days	14AC(6)

What happens if the shop still does not register?

Section 14AD starts if the person fails to register within fifteen days of the permanent bar order under section 14AC(4). The Chief Commissioner forms a committee of the Chief Commissioner, the Commissioner and one member from a Chamber of Commerce or Trade Association. The committee issues a notice, which is also displayed at the business premises, and gives a personal hearing. It can recommend a bar on transfer of immovable property, but it must first give another fifteen days to register. The Commissioner can then direct the property registering authority to bar transfers. The bar is removed within two working days of registration.

Section 14AE is the last step, and it applies “subject to prior action under section 14AC and 14AD”. The Chief Commissioner may seal the business premises, seize moveable property, or appoint a receiver to manage the taxable activity. None of this can happen unless a public notice names the date, a committee (including a Chamber or Trade Association representative) hears the person in an open court, and the decision is published on the Board’s website and in a newspaper. The order is reversed within two working days of registration.

Worked example (illustrative figures)

Rashid runs a large garments store in Faisalabad that falls in Tier-1 but has never registered. Using the order the Act sets out:

1. The Commissioner gives him three consecutive opportunities of being heard. He does not register.
2. His bank is ordered to suspend his account for three working days.
3. One week later, a second three-day suspension. One week after that, a third.
4. The Commissioner orders a permanent bar on his bank accounts.
5. Fifteen days pass without registration. The committee under section 14AD issues a notice, hears him, and gives a further fifteen days before recommending a property transfer bar.
6. Only after steps 2 to 5 can section 14AE sealing be used, after a public notice and an open-court hearing.

Separately, at any point the Board could include him in a Sales Tax General Order under section 14AB directing his electricity company to disconnect the shop. If Rashid registers on a Monday, his bank bar must be lifted by Wednesday under section 14AC(5).

Are these powers already in force?

Not all of them can be confirmed from the Act alone. Section 14AC(7), section 14AD(8) and section 14AE(5) each say the section comes into force on a date the Board notifies in the official Gazette. Those notifications are not held in this corpus. Section 14AB carries no such commencement clause, but it works only through a Sales Tax General Order naming the persons, and those orders are also not held here.

Common mistakes

• Thinking registration ends the section 14AB risk. A notified Tier-1 retailer who is registered but not integrated is covered by clause (b).
• Assuming the bank bar comes without warning. Section 14AC requires three consecutive opportunities of being heard before any suspension.
• Assuming sealing can come first. Section 14AE is expressly subject to prior action under sections 14AC and 14AD.
• Treating every small shop as required to register. Section 14(1)(b) excludes retailers who pay sales tax through the electricity bill under section 3(9).

What to check in the official text

Read sections 14, 14AB, 14AC, 14AD and 14AE and clause (43A) of section 2 of the Sales Tax Act as amended to 30 June 2026. Sections 14AB and 14AC are printed inside the text of section 14 in the consolidated edition. Check the Board’s Gazette notifications bringing sections 14AC, 14AD and 14AE into force, and any Sales Tax General Order under section 14AB naming persons for disconnection. These are not held in this corpus.