The concept of going up in matters of holiness and not down, “ma’alin ba-kodesh v’ein moridin” is found frequently in the Talmud. As observed by R. Yosef Roth (Siach Yosef, II, 1) there are several different contexts in which this notion appears: a) in the order of performance of a mitzvah, such as the opinion of Beit Hillel (Shabbat 21b) that Chanukah candles increase in number each day (see also Megilah 21b, in reference to k’riat haTorah); b) in the grandeur of a particular mitzvah act, as in the statement (Menachot 99a) that the lechem ha-panim was placed first on the table of marble (before being brought in) and then on the table of gold (afterward) ; c) in the personal status of an individual perfoming in the realm of kedushah, such as the objection to removing Rabban Gamliel from his post of leadership (Berakhot 28a) and in terms of issues of kehunah (see also Yoma 12b and 73a); d) in reference to concerns of linguistic style and clarity (see Rashi, Mencahot 99a, s.v. vayakam). [See also Resp. Minchat Elazar, I, 27].

The Shulchan Arukh (O.C. 25:1) rules that the talit is put on before tefilin, because of ma’alin ba-kodesh v’ein moridin. However, the Gra notes that this rule is sourced in the Nimukkei Yosef and the Tur, and the Nimukkei Yosef’s reasoning (as cited by the Beit Yosef), is that the talit is prioritized because tzitzit is considered equal to all the mitzvot, and because it is more frequent (tadir) than tefilin, in that the talit is worn on Shabbat and Yom Tov as well.
Further, the Shulchan Arukh’s position is somewhat difficult to understand because it would appear that ma’alin b’kodesh is a concept applicable within the performance of one mitzvah. When there are two mitzvot involved, the opposite seems to be the case. As indicated by the Talmud (Zevachim 90b), one factor in prioritizing between two mitzvot (other than tadir) is which mitzvah is holier (mekudash). Thus, the holier mitzvah, among two, comes first, not last; thus, tefilin would seem to come before tzitzit.

Based on the above introduction R. Roth explains the position of the Shulchan Arukh. One approach may be to understand both tziztit and tefilin as part of the process of “accepting the Divine majesty” that centers on k’riat shma, and it is within that single process that ma’alin b’kodesh is being applied. However, that approach seems insufficient in that there is no indication that the Shulchan Arukh is referring to k’riat shma specifically. Rather, it could be suggested, as indicated by the Biur Halakhah, that the Shulchan Arukh is referring to the individual version of ma’alin b’kodesh, found in the contexts of Rabban Gamliel and of Kehunah. The intent is thus, that the individual adorned in a talit, who then puts on tefilin, is himself in a state of ascending holiness.