Educational institution hostel construction falls outside commercial construction tax and defeats extended limitation absent suppression.

Construction of a hostel building for an educational institution was treated as non-taxable under Commercial or Industrial Construction Service because the hostel formed part of educational infrastructure and was meant for non-commercial use, consistent with the statutory definition, exemption notifications, and departmental circulars. The construction was therefore held outside the taxable commercial category. The extended period of limitation was also held unavailable because the assessee's view was supported by a bona fide belief and there was no suppression of facts or intent to evade tax. The demand was unsustainable and the impugned order was set aside with consequential relief.

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Issues: (i) Whether construction of a hostel building for an educational institution is classifiable as Commercial or Industrial Construction Service. (ii) Whether the extended period of limitation is invocable on the facts of the case.

Issue (i): Whether construction of a hostel building for an educational institution is classifiable as Commercial or Industrial Construction Service.

Analysis: The construction was for a hostel of a medical institute, which was an educational institution. The service had to be tested against the statutory definition of Commercial or Industrial Construction Service and the exemption available for construction meant predominantly for use other than commerce, industry, or business. The applicable exemption notifications and the contemporaneous departmental circular also recognised that constructions for educational institutions, when not for profit or commercial use, do not fall within the taxable commercial category. The reasoning also drew support from earlier decisions holding that educational infrastructure is not commercial construction.

Conclusion: The construction of the hostel building was not taxable under Commercial or Industrial Construction Service and the finding is in favour of the assessee.

Issue (ii): Whether the extended period of limitation is invocable on the facts of the case.

Analysis: Once the construction activity was covered by the settled understanding that educational institution buildings were outside the commercial construction levy, the assessee's view was supported by a bona fide belief. In such circumstances, there was no basis to infer suppression of facts or intent to evade tax so as to justify invocation of the extended limitation period.

Conclusion: The extended period of limitation was not invocable and this issue is also in favour of the assessee.

Final Conclusion: The demand could not be sustained, and the impugned order was set aside with consequential relief.

Ratio Decidendi: Construction of a hostel or similar building for an educational institution, when meant for non-commercial educational use, does not constitute Commercial or Industrial Construction Service and cannot attract tax by invoking extended limitation absent suppression or intent to evade.

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