Narinder Singh Dhaliwal’s request for time to pay overdue tax debts exceeding one million dollars owed by his transport company KD Transport Ltd was dismissed despite his complaints that liquidation would cause financial hardship for his family. Family-owned companies are treated more leniently by Inland Revenue.
Counting against KD Transport was the fact it had continually failed to pay taxes due. In addition, there were concerns company assets might be transferred to a new company registered in the name of Mr Dhaliwal’s spouse.
Auckland-based KD Transport applied for tax relief under special rules for ‘closely-held’ companies where one individual holds at least half the shares.
Tax law recognises these companies are often the sole source of family income. Owner’s personal circumstances are taken into account when negotiating payment plans for tax arrears their company owes.
The High Court was told KD Transport belatedly offered Inland Revenue a part-payment deal for tax arrears in May 2025, when unpaid tax then totalled $650,000 and Inland Revenue was taking steps to liquidate KD Transport.
Mr Dhaliwal had not followed up on earlier Inland Revenue suggestions he get in touch to talk about KD Transport’s arrears.
This part payment offer amounted to an upfront $100,000 payment, plus monthly $12,000 payments to clear what Mr Dhaliwal categorised as KD Transport’s ‘core tax arrears.’
In reply, Inland Revenue asked for detailed information, including full disclosure of Mr Dhaliwal’s personal financial position. Some information, but not the required detail, was provided.
The part payment offer, and a subsequent further application for tax relief, were both refused by Inland Revenue on grounds no attempts were being made to meet current KD Transport tax debts, let alone contribute to arrears.
The supposed $100,000 offered earlier was not paid across to meet any of KD Transport’s tax arrears.
When Inland Revenue resumed liquidation proceedings against KD Transport, Mr Dhaliwal challenged the process by which Inland Revenue refused his earlier applications for tax relief.
Associate Judge Paulsen declined to intervene, instead putting KD Transport into liquidation.
KD Transport is clearly insolvent, he ruled. Allowing the company to continue trading puts at risk all creditors, including Inland Revenue.
Tax arrears were continuing to mount.
It is better that company assets now be held by a liquidator and sold under the liquidator’s supervision, he said.
The liquidator subsequently reported that all KD Transport’s trucks were mortgaged and have been seized by secured creditors.
Inland Revenue v. KD Transport Ltd – High Court (15.09.25)
25.206