Section 43

Preservation of funds 

(1) This section applies if the Commissioner reasonably believes—

• (a) that a taxpayer— 
• (i) has made taxable supplies, has removed excisable goods, or has derived an income, in respect of which tax has not been charged; or 
• (ii) has collected a tax, including withholding tax, that has not been accounted for; and 
• (b) that the taxpayer is likely to frustrate the recovery of the tax. 

(2) The Commissioner may by notice in writing, in respect of a taxpayer to whom this section applies, require a person—

• (a) who owes or may subsequently owe money to the taxpayer; 
• (b) who holds or may subsequently hold money for or on account of the taxpayer; 
• (c) who holds or may subsequently hold money for on account of another person for payment to the taxpayer; or 
• (d) who has the authority from some other person to pay money to the taxpayer, 

to preserve such money, and that person shall not transfer, withdraw, dispose of or otherwise deal with that money except as provided for in the notice for a period of ten working days or until the application by the Commissioner made in accordance with subsection (3) is heard and determined by the High Court.

(3) The Commissioner shall apply, in the absence of the taxpayer, to the High Court for an order against any person holding funds belonging to the taxpayer, prohibiting that person from transferring, withdrawing, disposing of or otherwise dealing with such funds.

(4) The Court may issue an order under subsection (3) if the Court is satisfied that the conditions specified under subsection (1) have been met.

(5) An order made under this section shall be valid for a period of thirty days but the Commissioner may apply to the Court for an extension of the period beyond the initial thirty days.

(6) The Commissioner shall serve the order under this section on the taxpayer as soon as is practicable and upon service, the taxpayer may, within fifteen days, apply to the Court to discharge or vary the order.

(7) If the order made under this section is not discharged or varied, the Commissioner shall, within thirty days of serving the taxpayer with the order, assess the tax due and payable by the taxpayer, notify the taxpayer of the assessment and commence proceedings for the recovery of the tax.

(8) An order issued under this section shall expire on the service of a notice of assessment under subsection (7) unless the Court extends the order.

(9) Despite the provisions of any written law, contract or agreement, a person who complies with an order made by the High Court under this section shall be indemnified in respect of the actions taken in connection with the order against all proceedings or processes.

(10) A person who, without reasonable cause, fails to comply with an order of the High Court under this section shall be personally liable for the amount specified in the order.

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