Rules 21 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The last rules of the Customs Attachment of Property Rules, 1995 deal with what happens once a sale has taken place. Rules 21 to 28 cover confirmation of the sale, the sale certificate, what the purchaser acquires, protection against irregularities, bars on officers and holiday sales, how the proceeds are applied and what happens if the defaulter dies.
This article reads the Rules as amended up to the CBIC text updated 6 August 2014 (reflecting Notification No. 29/99-Cus. (N.T.) for rule 28). Later notifications should be checked, as no official consolidated text exists beyond the CBIC text.
Unless a challenge succeeds, the Proper Officer confirms the sale once the full purchase money is paid and the sale becomes absolute. The purchaser gets the defaulter's right, title and interest. Sale proceeds go first to costs of sale, then to the certificate amount plus the cost of detention, then to other government dues, and any balance to the defaulter. Officers may not bid, and no sale is held on a holiday.
Rule 21: confirmation of sale
Rule 21(i). Where no application to set the sale aside is made under rule 20, or where one is made and disallowed, the Proper Officer shall, if the full amount of the purchase money has been paid, make an order confirming the sale, and the sale becomes absolute.
Rule 21(ii). Where such an application is made and allowed, and where, for an application to set aside the sale on deposit of the amount and penalty and charges, the deposit is made within thirty days from the date of the sale, the Proper Officer shall make an order setting aside the sale.
Proviso. No order is made unless notice of the application has been given to the person affected.
The earlier steps are in our article on rules 15 to 20. Note the second route in rule 21(ii): the defaulter can also have the sale set aside by depositing the amount, penalty and charges within thirty days of the sale. The wording of the rule on that second route is brief, so a defaulter considering it should confirm the exact sums with the Proper Officer in writing.
If a sale has already occurred and you want to challenge or protect it, our legal dispute resolution team can help.
Rule 22: sale certificate
- (i) Where the sale of any immovable property has become absolute, the Proper Officer grants a certificate specifying the property sold and the name of the person declared the purchaser at the time of sale.
- (ii) The certificate states the date on which the sale became absolute.
The certificate is the buyer's document of title for immovable property, and the date it records matters for rule 23(ii).
Rule 23: purchaser's title
- (i) Where any property is sold under the Rules, the right, title and interest of the defaulter at the time of the sale vests in the purchaser.
- (ii) Where immovable property is sold and the sale has become absolute, the purchaser's right, title and interest are deemed vested in him from the time when the property is sold, not from the time when the sale becomes absolute.
The purchaser therefore takes only what the defaulter had. That is why rule 20 gives a purchaser the right to challenge where the defaulter had no saleable interest.
Rule 24: irregularity does not vitiate the sale
No irregularity in the conduct of a sale vitiates the sale. But any person who sustains substantial injury because of the irregularity, at the hands of any other person, may sue in a Civil Court for compensation or, if that other person is the purchaser, for recovery of specific property and for compensation in default of recovery.
This keeps sales stable while leaving a remedy for the injured person, a suit in the civil court rather than a reversal of the sale.
Rule 25: no bidding or purchase by officers
No officer or other person having any duty to perform in connection with any sale under the Rules shall, directly or indirectly, bid for, acquire or attempt to acquire any interest in the property sold.
Rule 26: no sale on holidays
No sale takes place on a Sunday or other general holiday recognised by the State Government, or on any day notified by the State Government as a local holiday for the area in which the sale is to take place.
Rule 27: disposal of sale proceeds
The sale proceeds are applied in this order:
| Order | Applied to |
|---|---|
| (a) | The cost of sale |
| (b) | The amount in the certificate issued under rule 3, together with the cost of detention of the property |
| (c) | Any other government dues payable by the defaulter |
| (d) | The balance, if any, paid to the defaulter |
The order matters: the cost of sale comes first, then the certificate amount. Other dues the defaulter owes are met next, and only then does any surplus return to him.
Rule 28: death of the defaulter
If, after the certificate has been issued by the Assistant Commissioner or Deputy Commissioner, the defaulter dies, the proceedings may be continued against his legal representatives, and the Rules apply as if the legal representatives were the defaulter. The designation of the issuing officer was changed by Notification No. 29/99-Cus. (N.T.).
Example. Willow Hardware's warehouse is sold at auction and the buyer, Mr. Iqbal, pays the full purchase money. No application is made to set the sale aside. The Proper Officer confirms the sale and it becomes absolute, and issues a certificate showing the property, Mr. Iqbal's name and the date. Mr. Iqbal's title is treated as vesting from the day of the sale. The proceeds first pay the cost of sale, then the certificate amount plus the cost of detention, then any other government dues of Willow Hardware, and any balance goes to Willow Hardware.
For the Act's recovery power, see our article on section 142. The first steps of this process are in our article on rules 1 to 5.
Need help after a recovery sale?
Whether you are the defaulter, a purchaser or a creditor, the timing of challenges and the order of payments matter. Our legal dispute resolution team can help you check the steps taken and plan your response.
Key takeaways
- The sale becomes absolute on the Proper Officer's confirmation order, if the full purchase money has been paid.
- For immovable property, the certificate states the property, the purchaser and the date the sale became absolute.
- The purchaser acquires the defaulter's right, title and interest, deemed vested from the time of sale.
- Irregularity does not vitiate a sale; an injured person can sue in a Civil Court.
- Proceeds go to the cost of sale, the certificate amount and detention cost, other government dues, then the defaulter.
Read next
- Rules 15–20 of the Customs Attachment of Property Rules, 1995: sale, proclamation and setting aside
- Rules 1–5 of the Customs Attachment of Property Rules, 1995: certificate, notice and attachment
- Rules 6–14 of the Customs Attachment of Property Rules, 1995
- Section 142 of the Customs Act: recovery of sums due to Government
Disclaimer: Based on the customs rules named above as published on the CBIC Tax Information Portal and, for sets amended since 2023, the amending notifications (read through a TaxClue consolidated reading text; no official consolidated text exists), as consulted on 3 October 2026. Later notifications, rates and the Customs Act, 1962 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.