Income Tax, GST and Customs: Questions and Answers

Reply first, in almost every case. The Section 148A procedure under the Income-tax Act 1961 is your chance to show the officer that no income escaped or that the notice is out of time, and the High Court expects you to have used it. Advocate B.K. Singh's first step on such a notice is to ask for the information relied on, because a reply is only as good as your knowledge of the department's case. Then file a full reply with documents and keep the portal acknowledgement. If the officer then passes the Section 148A order without dealing with your reply, that order and the Section 148 notice can be challenged together. A writ filed without any reply is often sent back.

It may well be. For notices issued from 1 September 2024, the general limit is three years from the end of the assessment year, and five years only where the alleged escaped income is Rs 50 lakh or more. Older notices are tested under the law that applied when they were issued, read with the Supreme Court's rulings in Ashish Agarwal (2022) and Rajeev Bansal (2024). Work out the exact dates before anything else. Limitation is the cleanest ground in a reassessment challenge, and the court can decide it on documents alone.

Only if the conditions are met. A garnishee notice under Section 226(3) of the 1961 Act lets the officer recover a demand from money your bank holds for you, but the demand must actually be due, the notice of demand must have reached you, and any pending stay application should be decided first. Recovery while a stay application sits undecided, or before the time to pay has run out, has been set aside by the Delhi High Court many times. Keep the bank's letter, the demand notice and portal screenshots ready. More on bank attachment for tax dues.

Apply for stay to the Assessing Officer under Section 220(6), and if that fails, to the Principal Commissioner. CBDT office memoranda treat a deposit of 20 per cent of the disputed demand as the usual figure, but the officer can accept less where the assessment looks high-pitched or there is real hardship. Ask for a written order with reasons. If the officer ignores the application and starts recovery, or insists on the full amount without reasons, a writ can be filed in the Delhi High Court.

Usually not. The Income-tax Act 2025 came into force on 1 April 2026, but assessments, reassessments and appeals for earlier years continue under the Income-tax Act 1961. So a notice issued in 2026 about a 2021-22 return is still read with the old Act. The new Act uses "tax year" in place of previous year and assessment year and renumbers almost everything; the High Court appeal provision, old Section 260A, is now Section 365. If a notice cites the wrong Act, show it to your lawyer before replying.

Not necessarily. Revocation under Section 30 of the CGST Act is normally sought within 90 days of the cancellation order, and the rules allow a further extension for sufficient cause (check the current rule). If that window has also closed, an appeal under Section 107 with an application to condone delay is the next step, and a writ is the last. The Delhi High Court has restored registrations where the business was genuine and the trader was ready to file pending returns and pay dues. See challenging GST cancellation.

Yes, the law allows it. When a show cause notice for cancellation is issued, the officer can suspend the registration under Rule 21A of the CGST Rules, and you cannot issue tax invoices meanwhile. Reply within the time given in the notice, usually seven working days, and ask for a personal hearing. A notice that just says "fake invoices" or "non-existent at address" without any detail is weak. The Delhi High Court has set aside many cancellations built on such bare notices.

Up to one year under Section 83(2) of the CGST Act, and it ends earlier if the proceedings end. Before attaching, the Commissioner must form a written opinion, based on real material, that attachment is needed to protect revenue. You can file objections within seven days under Rule 159(5) and must be heard. Officers often attach every account the business has. Ask for release of the accounts you need for salaries and statutory payments, offering security instead. More on GST bank attachment.

Yes, if the dispute is about the amount of tax, input tax credit or penalty. The route is an appeal to the appellate authority under Section 107 within three months, and then to the GSTAT under Section 112. With the GSTAT's Delhi bench functioning since April 2026, the High Court increasingly sends merits disputes there. Appeals from a GSTAT state bench come to the High Court on substantial questions of law, while Principal Bench orders on place of supply go to the Supreme Court. Check the transitional deadlines for older orders.

That is one of the stronger grounds for a GST writ. The Delhi High Court has set aside a large number of orders under Sections 73 and 74 that brushed the reply aside as "not satisfactory" without discussing it. Usually the court sends the matter back for a fresh order after a hearing; it does not decide the tax itself. Attach the reply and its portal acknowledgement to the writ. If the order is reasoned but wrong on facts, the appeal route is the right one.

You can, but a writ against the search itself rarely succeeds. Courts do not weigh whether the information behind a search authorisation (Section 132 of the 1961 Act) was enough; they step in only where there was no material at all or the action was plainly mala fide. The useful High Court work usually comes later: release of seized cash or jewellery, return of books and devices, and the assessment that follows. Advocate B.K. Singh tells clients to read the panchnama and the inventory of seized items page by page before signing, and to note when the search began and ended.

Explain its source quickly, and go to court if the department sits on it. A CBDT instruction says jewellery up to 500 grams per married woman, 250 grams per unmarried woman and 100 grams per male member is normally not seized, and jewellery shown in earlier returns, wills or family records is often released. Apply for release with bills, valuation reports and family papers, and do it early, because the law gives a short window. If the application is ignored for months or rejected without reasons, a writ can ask for a reasoned decision.

Only substantial questions of law. The appeal under Section 260A of the 1961 Act (Section 365 of the 2025 Act) is filed within 120 days of receiving the ITAT order, and the Division Bench first decides whether it raises such a question at all. A finding of fact can be attacked only if it rests on no evidence or ignores material evidence, which makes it perverse. The real work is in drafting the questions: a vague question reads as a factual grievance and is dismissed at admission. See income tax appeals in the High Court.

Sometimes, but speed is not the test. The High Court entertains a tax writ when there is a clear problem of jurisdiction, limitation or no hearing, or when a provision itself is under challenge. Otherwise it sends you back to the appeal you skipped, and in GST the appeal limitation keeps running while the writ is pending. Decide the route early, on what your papers actually show. Even a successful writ usually sends the matter back to the officer instead of deciding the tax. See when writs are refused for an alternative remedy.

It may. In tax writs, the Delhi High Court sometimes stays recovery on condition that part of the demand is deposited or security is given, especially where the challenge goes to merits rather than pure jurisdiction. Where the notice or order looks plainly without authority, an unconditional stay is more likely. Come to the first hearing with clear figures on cash flow and assets, because the bench may ask what you can deposit, and a vague answer does not help.

No fixed limit, but delay hurts. Article 226 has no limitation period, yet the court refuses relief to those who sit on their rights, and in tax matters it often measures delay against the appeal period you let pass. A writ will rarely rescue someone who ignored portal notices for a year without reason. The safe habit is to check the e-filing portal at least once a week and act within days of an order, not months.

It can be. Under the faceless scheme in Section 144B of the 1961 Act, an assessee can ask for a personal hearing by video conference once a show cause notice proposes a variation, and the Delhi High Court has set aside many orders where that request was ignored or the time to reply was unreasonably short. The request must be on record on the portal. Courts have less sympathy where the assessee simply did not reply. File quickly, with screenshots of the full portal history.

Act fast and collect proof. Where notices went only to an email address no longer in use, or sat in a portal tab the assessee never saw, the Delhi High Court has set aside orders and sent the case back for a fresh hearing. The court looks at when you actually came to know and how quickly you moved after that. Update your email, phone and address on the e-filing portal today, download the full notice history, and decide between an appeal with a delay application and a writ.

Often, yes. When a refund has been determined and simply not paid, or held back without an order under Section 241A or an adjustment notice under Section 245 of the 1961 Act, the Delhi High Court has directed release with interest under Section 244A. Before filing, write to the Assessing Officer and raise a grievance on the e-filing portal, so you can show the court you tried. If the refund is being adjusted against an old demand, you are entitled to prior intimation and a chance to object.

Take it seriously, but check the tax effect first. CBDT Circular 9 of 2024 sets Rs 2 crore as the monetary limit for departmental appeals to the High Court, with exceptions such as search cases, organised tax evasion and challenges to the validity of a law (check the current circular). If the tax effect is below the limit and no exception is claimed, point it out at the first hearing. Appear through counsel from the start, because admission is often decided at an early hearing.

Yes, under Section 179 of the 1961 Act, if the tax cannot be recovered from the company. You escape liability by showing that non-recovery was not due to your gross neglect, misfeasance or breach of duty. The officer must first genuinely try to recover from the company and then give you a show cause notice and a reasoned order. Orders that skip these steps are regularly challenged by writ. Former directors should check whether they were on the board for the years in question.

Yes, if the rejection is mechanical. A certificate under Section 197 of the 1961 Act lets your payer deduct tax at a lower rate, and the officer must look at your estimated income and past record, not just old demands. The Delhi High Court has quashed rejections that gave no reasons or relied only on a demand already under appeal. A certificate covers one financial year, so a slow case can make the relief pointless. File quickly, or reapply with better figures.

Possibly. Section 16(2)(c) of the CGST Act ties credit to tax actually paid to the government, and the department relies on it. But courts have protected genuine buyers who paid through banking channels and received real goods, especially where no effort was made to recover from the defaulting supplier first; the Delhi High Court did so under the old Delhi VAT law. Under GST the outcome turns on facts, so check current rulings. Keep invoices, e-way bills, transport records and bank proof together.

Only in serious cases, and only with safeguards. Arrest under Section 69 of the CGST Act needs the Commissioner's authorisation and is meant for specified offences such as fake invoicing or wrongly availed credit, generally where the tax involved is above Rs 2 crore. In Radhika Agarwal v. Union of India (2025), the Supreme Court held that anticipatory bail can be sought even before any complaint is filed. Attend the summons with documents, and never sign a statement you have not read in full.

Yes, if the business is real and you can prove it. Cancellations after a field visit reported the premises as "non-existent" are common in Delhi, and sometimes the officer visited at odd hours or went to the wrong floor. Ask for a copy of the inspection report, which the notice should have relied on and shared. Rent agreement, electricity bills, dated photographs, stock records and bank entries help. Where the report was never given to the trader, the Delhi High Court has set cancellations aside and ordered a fresh hearing.

Possibly. A payment made under pressure during a search does not become voluntary just because it was paid through form DRC-03. CBIC itself instructed officers in May 2022 not to force recovery during searches and inspections. High Courts have ordered refunds where the pressure was shown. Write to the department soon after, stating that the payment was made under protest, and apply for refund. A letter sent a year later is far less convincing than one sent the same week.

Yes, through provisional release under Section 110A of the Customs Act 1962. The adjudicating authority can release seized goods on a bond and security, such as a bank guarantee, pending the decision. It suits perishable goods, machinery and stock needed for business. The security demanded must be reasonable; the Delhi High Court has reduced unreasonable conditions in writs. Apply in writing with your import documents and keep a copy of every reply. Prohibited goods are a different matter and rarely released.

Often yes, if you need the goods, and paying does not stop you from appealing. Under Section 125 of the Customs Act, the officer can allow redemption of confiscated goods on payment of a redemption fine plus duty, with any penalty separate. You can pay, take the goods and still challenge the fine and penalty in appeal. Watch the clock: the option lapses if not used within 120 days of the order, unless an appeal is pending. More on customs and DRI cases.

7.5 per cent of the duty or penalty in dispute for an appeal to the Commissioner (Appeals), and 10 per cent for an appeal to CESTAT, under Section 129E of the Customs Act, subject to a cap of Rs 10 crore. Where only a penalty is in dispute, the deposit is calculated on the penalty. Amounts already paid during investigation are usually adjusted towards it, so ask for that in writing. The pre-deposit is refunded with interest if you win.

Only in rare cases. Since 2014 the pre-deposit for customs and excise appeals is mandatory, and CESTAT itself cannot waive it. High Courts, in writ jurisdiction, have occasionally reduced or waived it where the order was plainly without jurisdiction or the appellant proved severe financial hardship with real documents. Do not plan around it. Arrange the deposit if you can, and file a writ only with strong papers. The same approach broadly applies to GST pre-deposits.

Sometimes, yes. Section 28(9) of the Customs Act expects demands to be decided within six months, or one year in cases of fraud or suppression, where possible. Courts, including the Delhi High Court, have quashed notices left unattended for many years without explanation, especially where the importer was never told the matter was kept pending in the call book. Collect all correspondence and work out the dates. A notice delayed because of your own conduct or a stay you obtained is a different story.

Not first. The ITAT can recall an order passed in your absence if you show sufficient cause, so apply to the Tribunal itself, explaining with documents why no one appeared. Time limits apply, so do it within weeks, not months. Go to the High Court only if the Tribunal refuses recall unreasonably, or if the order raises a substantial question of law on merits. Check whether the notice of hearing reached your counsel and your registered email.

Generally not. A notice issued to a person who has already died is invalid; the department must proceed against the legal representative under Section 159 of the 1961 Act. The Delhi High Court has quashed reassessment notices issued in the name of dead persons, particularly where the death had been reported to the department. Raise the point in the very first reply, attach the death certificate, and ask for the notice to be dropped. Do not file returns or replies in the deceased's name as if nothing happened.

Yes. For searches started on or after 1 September 2024, the 1961 Act brought back block assessment, which covers the six years before the search and the period up to the search, with undisclosed income taxed at a special flat rate. Searches from 1 April 2026 fall under the 2025 Act's equivalent provisions. The time limits and approvals for a block assessment are strict, and many challenges turn on them. Keep every notice and the full search record together.

The full portal history, not just the last order. Download every notice, your replies with acknowledgements, the order, the demand notice and any letters to your bank. For reassessment, add the original return and assessment for that year. When Advocate B.K. Singh reviews a tax file, he first lays out the dates in a line: when the notice was issued, when it reached you, when you replied and when the order came. Most jurisdictional points show up in that timeline. To discuss your papers, use the contact page.