(1) Where any goods is seized on-the-spot and without serving any notice for the recovery of arrear taxes, the Commissioner shall, as soon as possible, serve a notice of such seizure on the person mentioned below-

(a) the owner of the seized goods;

(b) the person who had custody or control of the goods immediately before seizure; or

(c) any person claiming the seized goods:

Provided that no such notice shall be required to be served if no one claims the goods.

(2) Where any goods is seized under sub-section (1), the Commissioner may, on the following terms and conditions, return such goods to such person, namely:-

(a) if a security deposit of money equal to the amount of arrear taxes for which the seizure has been made is furnished; or

(b) if, by agreeing to pay, in instalments, an amount equal to the amount for which the seizure has been made, the first instalment thereof is paid.

(3) If the tax is not paid or a security deposit for the payment thereof is not furnished or the first instalment of the tax is not paid by the defaulting taxpayer even after agreeing to pay by such instalments, the Commissioner may, within such time and in such manner as may be prescribed, sell the seized goods.

(4) The sale proceeds of the seized goods shall be disposed of in the following manner, namely:-

(a) firstly, by paying the cost of seizure, storage and sale of the goods;

(b) secondly, by paying off the amount of money equal to the amount of arrear taxes for the recovery of which the goods were seized;

(c) thirdly, by paying the taxes payable under any Law repealed by this Act; and

(d) fourthly, by paying the balance, if any, back to the owner of the goods.

(5) Where a proceeding is pending before a Commissioner (Appeal) or an Appellate Tribunal or the Supreme Court against the tax determination on the basis of which the goods were seized for the recovery of the arrear taxes, the sale of the property of the defaulting taxpayer shall, except in the following cases, remain suspended, namely:-

(a) goods subject to decay or perishable goods; and

(b) any goods specified by the Commissioner.