Pending statutory appeals bar writ interference, but arbitrary penalty during a pending section 40 application was quashed.

Pending statutory appeals weighed against writ interference under Article 226, so the High Court declined relief against the assessment order and the first penalty order and left those challenges to be pursued in appeal. By contrast, the second penalty order was quashed because it was imposed while an application under section 40 was still pending and the discretion granted to the authority was not properly exercised, rendering the levy arbitrary and unjustified. The relief was therefore limited to the second penalty order, with the remaining challenges left to the appellate remedy.

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Issues: (i) Whether the writ court should interfere with the assessment order and the first penalty order when statutory appeals against them were already pending; (ii) Whether the second penalty order was sustainable in view of the pending application under section 40 and the circumstances in which the discretion was exercised.

Issue (i): Whether the writ court should interfere with the assessment order and the first penalty order when statutory appeals against them were already pending.

Analysis: The existence of pending appeals before the appellate authority weighed against the exercise of writ jurisdiction under article 226. Even though grievance was expressed regarding the assessment and the first levy of penalty, the proper course was to pursue those contentions before the appellate authority constituted under the Act. The writ court therefore declined to grant relief on those matters.

Conclusion: No interference was granted with the assessment order and the first penalty order; the petitioner was left to work out the remedies in appeal.

Issue (ii): Whether the second penalty order was sustainable in view of the pending application under section 40 and the circumstances in which the discretion was exercised.

Analysis: The second penalty was imposed while the application under section 40 was still pending, and the discretion vested in the authority was not exercised properly. In those circumstances, the levy was found to be arbitrary and unjustified, and there was no pending appeal against that order to bar interference.

Conclusion: The second penalty order was quashed.

Final Conclusion: The writ petition succeeded only in part, with relief confined to quashing the second penalty order, while the challenge to the assessment order and the first penalty order was left to be pursued in the pending appeals.

Ratio Decidendi: Where statutory appeals are already pending, writ jurisdiction will ordinarily not be exercised against those orders, but a penalty imposed by arbitrary exercise of discretion while a relevant application remains pending may be quashed.

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