Inland Revenue Act 2006 · As enacted · Chapter XXVI · Recovery of Tax
176. Tax to be a first charge
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
Save as provided in subsection (2), tax in default shall be a first charge upon all the assets of the defaulter:
Provided that—
such charge shall not extend to or affect any assets sold by the defaulter to a bona fide purchaser for value prior to the seizure of the same in accordance with the provisions of section 178;
as regards immovable property, the tax shall not rank in priority to any lease or encumbrance created bona fide for value and registered prior to the date of seizure of the property under section 178; and
as regards movable property, where tax for more than one year of assessment is in default, the tax for one year only to be selected by the Commissioner-General, shall rank in priority to any lien or encumbrance created bona fide for value prior to the date of default.
A receiver shall pay out of the assets under his control, the tax charged or chargeable for one complete year of assessment prior to the date of the insolvency, bankruptcy, or liquidation to be selected by the Commissioner-General as a first charge on such assets, and any other tax charged or chargeable for periods prior to such date shall be an unsecured debt:
Provided that where the receiver proves to the satisfaction of the Commissioner-General that any tax in default which he is liable to pay is excessive, the Commissioner-General may, notwithstanding the provisions of section 171, review the assessment in respect of which the tax is charged and make such adjustments as may appear to him to be just and equitable in all the circumstances of the case.
Chapter XXVII
Miscellaneous
Chapter XXVIII
Repayment
Chapter XXIX
Penalties and Offences
Chapter XXX
Administration
Chapter XXXI
General
Chapter XXXII
Interpretation
Chapter XXXIII