LEGAL ISSUE: RECOVERY OF TAX WITHOUT NOTICE The central legal issue in this case was whether the tax department could recover unpaid advance tax from taxpayers' bank accounts without serving prior notices under Sections 137 and 138 of the Income Tax Ordinance. TAX DEPARTMENT'S ARGUMENT The tax department argued that: 1. No additional notices were required when recovering overdue advance tax under Section 147. 2. The deadline for advance tax payment, as prescribed under Section 147(5)(a), had passed. 3. Since the tax was overdue, recovery under Section 140 was justified without further notification. TAXPAYERS’ ARGUMENT The taxpayers contended that: 1. The tax department was required to issue notices under Sections 137 and 138 before initiating recovery under Section 140. 2. The recovery was made without due process, directly from their bank accounts. 3. The subsequent tax return showed a refund, proving that the amount recovered was not actually due. APPELLATE FORUM’S DECISION The appellate forum ruled in favor of the taxpayers, stating that: 1. The tax department’s recovery action was illegal because no prior notices were issued under Sections 137 and 138. 2. Directly issuing a notice under Section 140 to the bank led to coercive recovery, which was not justified. 3. The recovery was made without following the proper legal procedure, making it unlawful. IMPLICATIONS OF THE DECISION This ruling reinforces the importance of procedural compliance before tax recoveries. It establishes that taxpayers must receive proper notices before funds are taken from their bank accounts. The decision could impact future tax recovery practices, ensuring that tax authorities follow the prescribed legal framework.