Residential complex classification and limitation: favourable prior Tribunal view defeated extended period for service tax demand.

Individual houses constructed within an approved layout with common facilities were treated as a "residential complex" because the statutory definition covers a complex of more than twelve residential units with common areas and prescribed amenities, and the Explanation extends "residential unit" to a single house or apartment. On limitation, the demand could not be sustained where an earlier favourable Tribunal view existed during the relevant period; mere non-registration, non-filing of returns and non-payment were insufficient to justify the extended period. As the show cause notice was issued after the normal limitation had expired, the demand failed and consequential relief followed.

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Issues: (i) Whether individual houses constructed as part of a layout with common facilities fall within the definition of "residential complex" under the Finance Act, 1994; and (ii) whether the demand was barred by limitation and the extended period could be invoked.

Issue (i): Whether individual houses constructed as part of a layout with common facilities fall within the definition of "residential complex" under the Finance Act, 1994.

Analysis: The definition of "residential complex" in Section 65(91a) of the Finance Act, 1994 was read as covering a complex comprising more than twelve residential units together with common area and prescribed facilities within an approved layout. The Explanation inserted for removal of doubts states that a "residential unit" means a single house or a single apartment, and that "personal use" includes permitting use on rent or without consideration. On that construction, individual houses with common facilities were held to be covered by the definition.

Conclusion: Individual houses with common facilities fall within the definition of "residential complex".

Issue (ii): Whether the demand was barred by limitation and the extended period could be invoked.

Analysis: The demand related to a period when an earlier Tribunal decision in the appellant's own case had already taken the view that similar construction activity was not taxable. In those circumstances, non-registration, non-filing of returns and non-payment by themselves were held insufficient to justify invocation of the extended period. The normal limitation under Section 73 of the Finance Act, 1994 had expired before issuance of the show cause notice.

Conclusion: The demand was barred by limitation and the extended period was not invocable.

Final Conclusion: The appeal succeeded because the impugned demand could not survive on limitation, and the assessee was held entitled to consequential relief.

Ratio Decidendi: Where a taxpayer acts during a period covered by a then-existing favourable Tribunal view, invocation of the extended period requires more than mere non-registration or non-filing of returns, and a demand raised beyond the normal limitation cannot be sustained.

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