Court Denies Petition to Quash Tax Notices; Urges Use of Appeal Channels and Grants Temporary Stay on Assessments.

The High Court declined to entertain the petition under Article 226 seeking to quash notices and assessment orders under the Income Tax Act due to the petitioner's pending appeal and review proceedings. The Court emphasized that the Appellate and Revisionary Authorities must consider the legal interpretations established by prior High Court decisions. The Court ordered the petitioner to continue with the appellate and revisionary proceedings, granting a stay on the assessment order until these proceedings are concluded, while keeping all legal contentions open for consideration.

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Issues:
Petition under Article 226 seeking various reliefs including quashing of notices and assessment orders under the Income Tax Act. Whether the petitioner can invoke the extraordinary jurisdiction of the High Court despite pending appeal and review proceedings.

Analysis:
The petitioner sought relief under Article 226 to quash notices and assessment orders under the Income Tax Act, citing non-grant of sanction by the appropriate authority as specified under Section 151 of the Act. The petitioner had already filed an appeal and a Review Application, both pending, before approaching the High Court. The petitioner argued that despite the pending appeal and review, the petition was filed due to the decisions of the High Court in similar cases. However, the revenue contended that the petitioner had already availed of an alternate remedy and should not invoke the High Court's jurisdiction solely based on previous court decisions.

The Court acknowledged the petitioner's pending appeal and review but emphasized that the Appellate Authority and Revisionary Authority must consider the legal position established by the High Court's decisions. The Court held that the petitioner should pursue the pending proceedings before the Appellate and Revisionary Authorities, as they are bound to consider the legal interpretations provided by the High Court. The Court cautioned against entertaining writ petitions that could be adjudicated by the Appellate Authority, as it would burden the High Court unnecessarily.

Ultimately, the Court decided not to entertain the petition challenging the assessment order, considering the pending appeal and review. However, the Court agreed that if the assessment order and notices were prima facie illegal based on the High Court's decisions, they should not be given effect until the appellate and revisionary proceedings are concluded. The Court ordered the petitioner to continue with the proceedings before the Appellate and Revisionary Authorities, allowing contentions regarding the legality of the notices issued under Section 148 in light of previous court decisions. The Court stayed the assessment order until the conclusion of the pending proceedings, keeping all contentions of the petitioner open for consideration.

In conclusion, the Court disposed of the petition with the directive for the petitioner to pursue the ongoing proceedings, ensuring that the assessment order remains stayed until the Appellate and Revisionary Authorities make their decisions.

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