Interim stay of tax prosecution granted where reassessment appeals were pending, pending final appellate disposal.

Criminal prosecutions under the Income-tax Act and Wealth-tax Act were considered for interim stay because the reassessment orders were already under challenge in pending appeals. The court noted that earlier decisions had granted similar protection during appellate pendency, and distinguished authority concerned only with initiation of prosecution while reassessment proceedings were still pending. On that basis, interim relief was treated as appropriate to prevent the prosecutions from proceeding until the appeals were decided, with liberty to revive the prosecution if the appeals fail.

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Issues: Whether the criminal prosecutions launched under the Income-tax Act and the Wealth-tax Act should be stayed during the pendency of appeals against the reassessment orders.

Analysis: The prosecution arose from alleged wilful evasion of tax and false verification. The reassessment orders were under challenge before the appellate forum and those appeals were pending. The order notes prior decisions of this Court staying similar prosecutions during pendency of appeals, and distinguishes authority dealing only with the initiation of prosecution while reassessment proceedings were pending. On that basis, interim protection was considered appropriate pending disposal of the appeals.

Outcome: Interim relief was granted staying the prosecution for the time being, with liberty to proceed if the appeals are dismissed.

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