Section 41

Distress orders 

(1) The Commissioner or an authorised officer may issue an order (referred to as a “distress order”), in writing, for the recovery of an unpaid tax by distress and sale of the movable property of a taxpayer.

(2) A distress order shall specify––

• (a) the taxpayer against whose property the order is issued; 
• (b) the amount of the unpaid tax liability; 
• (c) the property against which the distress proceedings are to be executed; and 
• (d) the location of the property against which the distress proceedings are to be executed. 

(3) For the purposes of executing a distress order, the Commissioner or authorised officer may––

• (a) at any time, enter any house or premises described in the distress order to secure the property that is subject to the proceedings; 
• (b) at the cost of the taxpayer, engage such persons as the Commissioner considers necessary to assist in the execution of the distress order; and 
• (c) require a police officer to be present while the distress order is being executed. 

(4) A police officer to whom subsection (3)(c) applies shall comply with the requirement to be present when the distress order is being executed.

(5) The property that is the subject of the distress order––

• (a) shall be identified by attaching a notice stating the property has been impounded for failure to comply with a tax obligation; and
• (b) shall be kept at the premises where the distress is executed or at any other place that the Commissioner or authorised officer may consider appropriate, at the cost of the taxpayer.

(6) When the taxpayer does not pay the tax liability described in the distress order, together with the costs of the distress proceedings––

• (a) in the  case of perishable goods, within the period that the Commissioner or authorised officer notifies the taxpayer in writing as reasonable having regard to the condition of the goods; or 
• (b) in the case of other personal property, within ten days after the property has been secured by the Commissioner or authorised officer under subsection (5), the property that is the subject of the distress order may be sold by public auction or private treaty as the Commissioner or authorised officer may direct. 

(7) The Commissioner or an authorised officer shall apply the proceeds of sale of the property that is the subject of the distress order towards the cost of taking, keeping, and selling the property with the balance, if any, applied in the following order––

• (a) in payment of the unpaid tax due by the taxpayer; 
• (b) the remainder of the proceeds, if any, shall be paid to the taxpayer. 

(8) When the proceeds of disposal of the property that is the subject of the distress order is less than the total of the taxpayer’s unpaid tax and the cost of taking, keeping and selling the property, the Commissioner may initiate proceedings to recover the shortfall.

(9) For the purpose of subsection (8), the unpaid amount of the cost of taking, keeping and selling the property that is the subject of the distress order shall be treated as a tax payable by the taxpayer.

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