Strict construction of tax charging provisions defeats interest and penalty demand absent clear statutory authority.

Interest and penalty could not be demanded on additional duties under the Additional Duties of Excise (Textile & Textile Articles) Act, 1978 because the Act contained no specific charging provision adopting Sections 11AB and 11AC of the Central Excise Act for that purpose. The court applied the rule that tax demands must rest on clear statutory authority and charging provisions are to be strictly construed. The assessee was not barred from challenging the demand by any earlier omission, as there is no estoppel against law. The demand was therefore without authority of law and unsustainable.

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Issues: Whether interest and penalty could be demanded and appropriated for additional duties under the Additional Duties of Excise (Textile & Textile Articles) Act, 1978 in the absence of a specific charging provision, and whether the assessee was barred from challenging the demand because the issue had not been agitated earlier.

Analysis: Section 3(3) of the Additional Duties of Excise (Textile & Textile Articles) Act, 1978 only adopts the provisions of the Central Excise Act, 1944 to the extent they are applicable to levy and collection. The Act itself contained no specific provision for levy of interest under Section 11AB or penalty under Section 11AC of the Central Excise Act, 1944. In tax matters, a demand must rest on clear statutory authority and the charging provision must be strictly construed. The absence of an earlier challenge did not confer power on the authorities to recover interest or penalty where none existed in law, and there is no estoppel against law.

Conclusion: The demand of interest and penalty was without authority of law and could not be sustained; the assessee succeeded.

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