Welcome End To Arrest For Income-tax Arrears, But Punjabs Farmers Can Still Be Jailed For Up To 40 Days: Kbs Sidhu
Sep21,2026
| Jagrati Lahar Bureau | Chandigarh
Former Financial Commissioner Revenue asks Union Finance Minister and Punjab Chief
Minister to extend the reform to agricultural dues, kurki and nilami
CHANDIGARH, 21 September 2026: While welcoming the abolition of arrest and detention
as a means of recovering income-tax arrears, KBS Sidhu, IAS (Retd.), former Special Chief
Secretary and Financial Commissioner Revenue, Punjab, has pointed out that farmers in Punjab
can still be arrested and confined for up to forty days for unpaid agricultural dues. Their crops
and land can also be attached and auctioned under colonial-era revenue laws that remain on the
statute book.
In a joint letter to Union Finance Minister Nirmala Sitharaman and Punjab Chief Minister
Bhagwant Singh Mann, KBS Sidhu, who writes as a private citizen and is not aligned with any
political party, has asked both Governments to extend to the farmer the principle Parliament has
already accepted for the income-tax defaulter.
Through a notification of 17 September 2026, the Central Board of Direct Taxes deleted arrest
and detention from the income-tax recovery rules, with retrospective effect from 1 April 2026.
The notification follows an amendment made through the Finance Act, 2026. “I have no issue
with this reform; I welcome it,” KBS Sidhu said. “Parliament's own reasoning was that other
modes of recovery are sufficient. If they suffice against an income-tax defaulter owing crores,
they suffice against a farmer owing lakhs.”
Under the Punjab Land Revenue Act, 1887, a revenue officer can hold a defaulter under
personal restraint for up to ten days, after which the Collector can commit him to civil jail for up
to a month. His movable property and standing crops can be attached and sold (kurki and
nilami), and his holding auctioned. The Revenue Recovery Act, 1890 carries these demands
across districts. Land revenue itself was abolished in Punjab in 1997, yet the machinery
continues to be used for co-operative and other dues. “The hawalaat is still a standard fixture
even in newly built tehsil complexes,” KBS Sidhu noted.
He pointed out that the arrest provision applies only to natural persons, so a company can never
be jailed under it. The corporate sector meets a very different State:
• Creditors under the Insolvency and Bankruptcy Code had recovered only about 30.56 per
cent of admitted claims by June 2026.
• One recent personal insolvency approved by the NCLT returned about ₹6.25 crore against
claims of about ₹22,006 crore.
• Banks wrote off ₹9.95 lakh crore of loans to large industries and services over twelve
years.
Meanwhile, the OECD estimates that export restrictions and market controls implicitly taxed
Indian farmers about $120 billion in 2023.
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“When the borrower is a corporation, forgiveness is bookkeeping. When the
borrower is a cultivator, it is moral hazard,” KBS Sidhu said.
The letter asks the Government of India to:
• amend the Revenue Recovery Act, 1890 so that it cannot be used to arrest an agriculturist,
just as it already cannot be used to arrest a defaulter on municipal taxes;
• commend a model amendment to all States;
• notify the “fresh start” insolvency process for small individual debtors, still un-notified a
decade after the Code was enacted, with thresholds revised to the size of a real crop loan;
and
• weigh the cost of export restrictions to farmers whenever farm-debt relief is considered.
It asks the Government of Punjab to:
• amend the Punjab Land Revenue Act, 1887 in the next Vidhan Sabha session to omit
arrest and detention;
• issue interim instructions that no arrest warrants be issued for agricultural dues;
• examine a bar on kurki and nilami of land, standing crops, milch cattle and farm
implements for crop-loan dues until a restructuring has been offered;
• review the provision of hawalaats in new tehsil complexes; and
• compile district-wise data on arrests, kurki orders and auctions over the last five years.
KBS Sidhu has offered to place draft text of the amending provisions at the disposal of both
Governments.
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