Section 14 and 14A 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.
A penalty imposed under section 13 has to be paid. Section 14 sets out what happens if it is not: a defaulter who fails to pay in full within ninety days of the notice for payment can face civil imprisonment, after a show-cause process, with safeguards on arrest, production before the Adjudicating Authority and release. Section 14A, as printed in the copy consulted, adds a power of recovery through an officer of Enforcement, but the copy does not show it as in force.
If a person fails to make full payment of a penalty under section 13 within ninety days of service of the notice for payment, he is liable to civil imprisonment under section 14, but no arrest order may be made without a notice to show cause and written reasons on two grounds. A person arrested must be brought before the Adjudicating Authority within twenty-four hours. Detention is up to three years where the demand is above rupees one crore and up to six months in any other case. Section 14A is not shown as in force in the copy consulted.
About this article
This article is based on the consolidated text of the Act consulted (amendments shown up to Act 50 of 2019). Later amendments should be checked. Section 14 carries no amending footnote in the copy; section 14A is printed in brackets with a footnote reading "Section 14A shall stand inserted (date to be notified) by Act 28 of 2016, s. 229". The article says only what the copy prints. If you or your company face a demand for a penalty, our legal consultation team can help you plan the response.
Section 14: sub-section by sub-section
| Sub-section | Subject | Core rule |
|---|---|---|
| (1) | Liability | Failure to make full payment of a section 13 penalty within ninety days of service of the notice for payment |
| (2) | Pre-conditions | Notice to show cause, appearance, and written satisfaction on one of two grounds |
| (3) | Warrant: abscond | Warrant if likely to abscond or leave the jurisdiction |
| (4) | Warrant: no appearance | Warrant if appearance is not made |
| (5) | Execution elsewhere | Another Adjudicating Authority may execute the warrant |
| (6) | Production | Within twenty-four hours; release on payment; HUF karta |
| (7) | Hearing | Opportunity to show cause on appearance |
| (8) | Pending inquiry | Custody or release on security |
| (9) | Order of detention | After inquiry; up to fifteen days to satisfy arrears |
| (10) | No order | Release if under arrest |
| (11) | Period of detention | Up to three years or six months |
| (12) | After release | Liability for arrears continues |
| (13) | Execution of order | Manner of a warrant of arrest under the Code of Criminal Procedure, 1973 |
Sub-section (1): the ninety days
"Subject to the provisions of sub-section (2) of section 19", a person who fails to make full payment of the penalty imposed under section 13 within ninety days from the date on which the notice for payment of such penalty is served is liable to civil imprisonment under the section. The opening words link to section 19(2), which is connected to appeals before the Appellate Tribunal and a pre-deposit; see our article on section 19. The penalty in question is the one imposed under section 13; for the heads of penalty see our guide on contravention and penalties under section 13 and our article on section 13(1A) to (1D).
Sub-section (2): show cause and two grounds
No order for arrest and detention in civil prison of a defaulter shall be made unless:
- the Adjudicating Authority has issued and served a notice calling upon the defaulter to appear on a specified date and show cause why he should not be committed to civil prison; and
- the Adjudicating Authority, for reasons in writing, is satisfied of either:
- (a) that the defaulter, with the object or effect of obstructing recovery, has after the issue of notice dishonestly transferred, concealed or removed any part of his property; or
- (b) that the defaulter has, or has had since the issue of notice, the means to pay the arrears or some substantial part and refuses or neglects, or has refused or neglected, to pay.
Civil imprisonment is therefore not automatic on non-payment. It needs a notice, a hearing opportunity and a recorded satisfaction on dishonest dealing with property or on refusal despite having the means.
Sub-sections (3) to (5): warrants
- (3) Notwithstanding sub-section (1), a warrant for arrest may be issued if the Adjudicating Authority is satisfied, by affidavit or otherwise, that with the object or effect of delaying execution of "the certificate" the defaulter is likely to abscond or leave the local limits of the jurisdiction.
- (4) Where appearance is not made pursuant to a notice, the Adjudicating Authority may issue a warrant for arrest.
- (5) A warrant under (3) or (4) may also be executed by any other Adjudicating Authority within whose jurisdiction the defaulter may be found.
Drafting points. Sub-section (4) refers to a notice "issued and served under sub-section (1)", but the notice to show cause is in sub-section (2). Sub-sections (3), (11) and (12) speak of "the certificate", which the section does not define. Both are quoted as printed; the sense is the notice in (2) and the demand being enforced.
Sub-section (6): within twenty-four hours
Every person arrested under a warrant "shall be brought before the Adjudicating Authority issuing the warrant as soon as practicable and in any event within twenty-four hours of his arrest (exclusive of the time required for the journey)". The proviso says that if the defaulter pays the amount in the warrant and the costs of arrest to the arresting officer, the officer shall at once release him. The Explanation says that where the defaulter is a Hindu undivided family, the karta is deemed to be the defaulter.
Sub-sections (7) to (10): the inquiry
- (7) On appearance or production, the Adjudicating Authority shall give the defaulter an opportunity of showing cause why he should not be committed to civil prison.
- (8) Pending the inquiry, the authority may, in its discretion, order the defaulter to be detained in the custody of an officer it thinks fit or release him on security for appearance.
- (9) After the inquiry, it may order detention in civil prison and cause arrest. The proviso lets it, to give an opportunity of satisfying the arrears, leave the defaulter in custody of the arresting or other officer for a specified period not exceeding fifteen days, or release him on security for appearance at the end of that period.
- (10) If no order of detention is made, the defaulter, if under arrest, shall be released.
Sub-sections (11) to (13): detention, release and execution
- (11) A person detained may be detained (a) where the demand exceeds rupees one crore, up to three years, and (b) in any other case, up to six months. A proviso requires release on payment of the amount in the warrant to the officer-in-charge of the civil prison.
- (12) Release does not discharge liability for the arrears, but the person cannot be arrested again under the same certificate.
- (13) A detention order may be executed anywhere in India in the manner provided for the execution of a warrant of arrest under the Code of Criminal Procedure, 1973 (2 of 1974), as printed. Check the current law for the corresponding provision.
Example. A penalty is imposed on Rahul Mehta, an individual, and the notice for payment is served on him. He pays nothing within ninety days. The Adjudicating Authority issues and serves a notice to show cause. If it records in writing that he has the means to pay and refuses or neglects to do so, it may proceed to a warrant and, after the inquiry, an order of detention. If the demand is above rupees one crore, detention could be up to three years; in any other case, up to six months, and he is released if he pays the amount in the warrant. How these steps apply to a company or a firm is a separate question; section 42 deals with contravention by companies and has its own article in this series.
Section 14A: recovery of arrears of penalty
Section 14A is printed in brackets as "Power of recover arrears of penalty" (the heading is printed with "recover" for "to recover"). Footnote 1 reads: "Section 14A shall stand inserted (date to be notified) by Act 28 of 2016, s. 229." The copy consulted therefore does not show section 14A as in force. Anyone who needs to rely on it should check whether and when it has been brought into force, and the current text.
As printed, the section says:
- (1) Save as otherwise provided in the Act, the Adjudicating Authority may, by order in writing, authorise an officer of Enforcement not below the rank of Assistant Director to recover arrears of penalty from any person who fails to make full payment of the penalty under section 13 within ninety days of service of the notice for payment.
- (2) That officer shall exercise all the like powers conferred on the income-tax authority in relation to recovery of tax under the Income-tax Act, 1961 (43 of 1961), and the procedure laid down under the Second Schedule to that Act shall apply, with necessary changes, to recovery of arrears of penalty under the Act.
The Income-tax Act reference is quoted as printed; check the current law for the corresponding provision, and see our income-tax guides for tax matters.
What the Act does not say
- It does not say how the notice for payment is served beyond the words "served on him".
- It does not define "the certificate".
- It does not describe a civil prison's rules.
- It does not state any interest on arrears.
Need help with a penalty demand?
A penalty demand carries a clock, and the ninety-day period in section 14 starts from service of the notice. Our legal consultation team can help you check service, review appeal options and respond to a show-cause notice on time.
Key takeaways
- Failure to pay a section 13 penalty in full within ninety days of service of the notice for payment can lead to civil imprisonment (section 14(1)).
- No arrest order without a notice to show cause and written satisfaction on dishonest dealing with property or on refusal despite means (section 14(2)).
- An arrested person must be brought before the Adjudicating Authority within twenty-four hours, exclusive of journey time; payment of the warrant amount and costs leads to release (section 14(6)).
- The authority may allow up to fifteen days to satisfy arrears before ordering detention (section 14(9) proviso).
- Detention is up to three years where the demand exceeds rupees one crore and up to six months otherwise (section 14(11)).
- Section 14A is not shown as in force in the copy consulted; check its status.
Read next
- Section 15: power to compound a contravention
- Section 17: appeal to the Special Director (Appeals)
- Appeal Under FEMA: Appellate Tribunal
- Section 13(1A) to (1D): penalty, confiscation and prosecution for assets held outside India
Disclaimer: Based on a consolidated text of the Foreign Exchange Management Act, 1999 showing amendments up to Act 50 of 2019, as consulted on 2 October 2026. Limits, forms, timelines and procedures are set by rules, regulations and Reserve Bank directions made under the Act; they change from time to time and are not covered here. Later amendments should be checked. This article is general information, not legal advice; check the official text before acting.