TMI Blog2019 (6) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... e to tax or wholly exempt from tax or an agriculturist, to the extent of supply of produce out of cultivation of land. Thus section 23 is not contrary to section 22 but is clear expression of the intent of Section 23. From conjoint reading of Section 9 and section 24 of the Act, since the applicant is required to pay tax under reverse charge, they have to compulsorily register under GST and the requirements of Section 22(1) pertaining to taxable supply and the threshold limit are not applicable to them. The principles of jurisprudence namely the rule of harmonious construction and the rule against redundancy, the applicant would go out of the scope of Section 23 of the GST Act because he is making certain quantity of taxable supply of goods transport service by way of reverse charge mechanism and would fall within the scope of section 24 of the GST Act for the purpose of registration and hence he would be required to obtain registration under the Act in order to discharge his duty liability under reverse charge, notwithstanding the turnover limits specified in sub-section (1) of Section 22 of the GST Act. Applicant is liable to take registration in view of provisions of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and independent and is not overruled by section 24, it is covered under sec 23 and not required to take registration under the CGST Act, 2017. Section 24 specifically starts with Notwithstanding anything contained in sub-section (1) of section 22, so as to overrule sec 22 and not sec 23. Most of the persons in the supply of Exempted goods and services require services under which reverse charge is payable. And hence there would be no need of section 23 as everyone would be covered under sec. 24. Section 22 of CGST Act, 2017 from bare act: - Section 22 of CGST Act - Persons liable for registration every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees: Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees, (2) Every person wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, whether or not separately registered under this Act; (vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise; (viii) Input Service Distributor, whether or not separately registered under this Act; (ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic Commerce operator who is required to collect tax at source under section 52; (x) even electronic commerce operator; (xi) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and (xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council. ADDITIONAL SUBMISSIONS ON 11.03.2019 Background of the firm: 1. Jalaram Feeds is registered partnership firm having its registered office at K-31/2A, MIDC, Hingna road, Nagpur-16. 2. Jalaram Feeds is engaged exclusively in manufacturing and sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e section he is not liable to take registration because the turnover criteria is only applicable for taxable supply: Suppose for an instance, if the supplier in addition to the above supplies a Taxable Good or Service for say INR 10 Lakhs, he would be liable for registration as the Aggregate Turnover would exceed the specified limit. Which is not the case of Jalaram Feeds, as the firm is exclusively into supply of Cattle Feed (HSN: 2309) which is an Exempted Supply. Hence Jalaram Feeds is not liable to take registration under sec 22(1) Dealing Exclusively in Exempt Supplies Section 23 of CGST Act deals with persons not liable for registration is reproduced here for ready reference. The following persons shall not be liable to registration, namely: (a) Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tar Act; (b) An agriculturist, to the extent of supply of produce out of cultivation of land. As per sec 23 (a), Jalaram Feeds engaged exclusively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 24 does not mention anything about sec 23 as it is a specific section. Applying the interpretation rules of Law, it can be very well concluded that the legislation has chosen consciously section 24 to override the provisions of section 22(1) and has deliberately left-out section 23 from section 24 as sec. 23(Exempted Supplies) is a specific section. Let us understand the intention of the Legislature using the Example: As per this Section, if a person obtains a service of a GTA, or a Lawyer, or any goods or service with reverse charge liability, irrespective of the turnover is liable to obtain registration. If this section overrules sec 23 (which is not mentioned anywhere), then majority of the persons in the business of exempted goods will be liable for registration as they obtain GTA services for transportation of these goods. Hence drafting of sec 23 in GST Act has no relevance since each and every person doing any commercial activity even for one Rupee becomes liable to take registration under GST including a Farmer who supplies Fruits/ Vegetables/ Maize from his fields to the market. He requires to obtain services of GTA as he himself doesn t have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Ruling are as under: As per the provisions of section 9(3) or CGST / SGST(UTGST) Act, 2017 / section 5(3) IGST Act, 2017, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. Accordingly vide Notification No. 13/2017-CentraI Tax (Rate) dated 28.06.2017 services were specified on which tax shall be paid on reverse charge basis by the recipient of such services. Goods Transport Service is one among them. Section 22 of the CGST Act mandate every supplier liable to registered under Act is aggregate turnover of taxable supply or goods or services or both exceeds twenty Lakhs in a financial year. Section 23 exempt any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax of wholly exempt from tax under this Act of under the Integrated Goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 05/2017-CT dated 19.06.2017, Suppliers exclusively involved in providing services notified for payment of tax under reverse charge have been exempted for taking registration. In that case if contention of the applicant is accepted then neither the supplier of GTA service nor recipient would pay service tax nor would government lose revenue. This will defeat the basic purpose of reverse charge mechanism. Thus the applicant shall be required to be registered as per Section 24 (iii) of CGST Act, 2017 ( Persons who are required to pay tax under reverse charge ) 04. HEARING Preliminary hearing in the matter was held on 20.02.2019. Sh. Jinish Katariya, CA appeared and requested for admission of their application as per details therein. It was brought to his notice to pay balance fee of ₹ 5000. Jurisdictional Officer was not present for hearing. The application was admitted and called for final hearing on 12.03.2019. Sh. Jinish Katariya, CA and Ms. Ruby Malviya appeared and made oral and written submissions along with payment challan of ₹ 5000/-. Jurisdictional Officer Ms. Sonal Jawanjal Asstt. Commr. Of CGST Division Hingna, N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or is exempted from registration under section 23? The contention of the applicant that section 24 over rules section 22 only and not section 23, (section 23 being a specified section and independent and not overruled by section 24), and therefore not required to take registration, is not acceptable following reasons. Scheme GST being a tax on the event of supply every supplier needs to get registered. However, as per the scheme of the Act, not every supplier is required to get registered. Only those suppliers, whose aggregate turnover of all supplies exceeds the threshold limit as prescribed under Section 22 (including exempted and taxable supplies). Thus to be registered a person satisfies two conditions namely, supply of taxable goods or services or both and aggregate turnover in a financial year exceeds threshold limit. The expression taxable supply has been defined under the Act, as below: Section 2(108): taxable supply means a supply of goods or services or both which is leviable to tax under this Act; Thus a person who is engaged exclusively in the business of supplying goods or services or both that are not liable to tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other person or class of persons as may be notified by the Government on the recommendations of the Council. Section 24 deals with compulsory registration with respect to categories of persons specified therein. As per Section 24, persons who are required to pay tax under reverse charge shall, notwithstanding anything contained in subsection 1 of Section 22, be required to get registered under the Act. The term reverse charge has been defined under the Act as below: Section 2(98): reverse charge means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act; Further, Government is vested with powers to specify by way of notification, categories of supply, the tax on which shall be paid on reverse charge basis by the recipient of such supplies. The relevant section of the GST Act are as below: Section 9(3): The Government may, on the recommendations of the Council, by notification, specify categor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or (c) any co-operative society established by or under any law; or (d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and services Tax Act; or (e) any body corporate established, by or under any law; or (f) any partnership firm whether registered or not under any law including association of persons; or (g) any casual taxable person Goods Transport Agency (GTA) (a) Any factory registered under or governed by the Factories Act, 1948(63 of 1948); or (b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or (c) any co-operative society established by or under any law; or (d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uivaIent citations: (2008) 116 TTJ Ahd 415 = 2008 (3) TMI 400 - ITAT AHMEDABAD-C It is an established rule of interpretation that one should not interpret a provision in such a manner so as to make what has been enacted in other provisions of the Act as redundant. The legislature does not enact anything in the statute without any meaning or purpose. (iii) Kerala High Court: T.V. Abdul Nazar And Anr. vs P.K. Mohammed Kutty, Drug on 19 July, 1985: Equivalent citations: 1986 CriLJ 1534 = 1985 (7) TMI 381 - KERALA HIGH COURT Even if there is conflict between the provisions, the object and purpose of interpretation should be to give effect to both the provisions to the extent possible. Interpretation will have to be made with that object in view. The object of interpretation must be to have a compromise between the rival provisions to the extent possible. The object of interpretation should not, as far as possible, be to make one of the provisions redundant . Further it is in the fitness of things to bear in mind certain established principles of law on the interpretation of law by renowned jurists as stated in Eicher Tractors Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d one provision of the Act should be construed with reference to other provisions in the same act so as to make a consistent enactment of the whole statute. Such a construction has the merit of avoiding any inconsistency of repugnancy either within a section or between a section and other parts of the statute. It is the duty of the courts to avoid a head on clash between two sections of the same Act and, whenever it is possible to do so, to construe provisions which appear to conflict so that they harmonise. it should not be lightly assumed that Parliament had given with one hand what it took away with the other . The provisions of one section of a statute cannot be used to defeat those of another unless it is impossible to effect reconciliation between them. The same rule applies in regard to sub-sections of a section. In the words of Gajendragadkar, J.: The sub-sections must be read as parts of an integral whole and as being interdependent an attempt should be made in construing them to reconcile them if it is reasonably possible to do so, and to avoid repugnancy. As Stated by Venkatarama Aiyar, J. : The rule of construction is well settled that when there a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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