Interest and penalty under luxury tax law need express statutory authority; borrowed provisions cannot cure a missing charging basis.

Interest and penalty under the Tamil Nadu Tax on Luxuries Act, 1981 require an express charging or enabling provision in that statute; they cannot be sustained by borrowing section 24(3) of the Tamil Nadu General Sales Tax Act, 1959. The article also notes that an objection to demand notices was unnecessary where the challenge concerned jurisdiction itself, because Article 265 permits taxation and allied exactions only when authorised by law. On that reasoning, notices demanding interest and penalty were treated as lacking legal foundation and liable to be quashed.

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Issues: Whether interest and penalty could be levied and demanded under the Tamil Nadu Tax on Luxuries Act, 1981 in the absence of a charging provision, and whether the assessee could be relegated to objections against the impugned demand notices.

Analysis: The demand for interest was examined in the light of the statutory scheme and the earlier decision holding that, unless the enactment itself contains a substantive charging provision, interest cannot be imposed by borrowing provisions from another statute. Section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 could not be invoked to sustain a levy under the Tamil Nadu Tax on Luxuries Act, 1981 when the latter Act did not provide the necessary charging foundation. The same reasoning applied to the demand of penalty, since penalty also cannot be levied in the absence of an enabling provision in the taxing statute. The objection that the petitioner should first pursue objections to the notices was rejected because the challenge went to the root of jurisdiction and Article 265 forbids taxation or allied exactions without authority of law.

Conclusion: The impugned notices demanding interest and penalty were without jurisdiction and were quashed. The writ petitions were allowed.

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