2009 (10) TMI 520 - SC - VAT and Sales Tax

Interpretation of the second paragraph submitted by respondent No. 1 (Arraycom) - According to the High Court, the bid of Rs. 51.57 crores was an inclusive bid and no amount of Central sales tax could have been added to that amount - Held that - Appeal allowed. Paragraph 2 of the bid of Arraycom is ambiguous and this is the fault of Arraycom itself by giving such an ambiguous proposal. Respondent No. 1 should have given a clear cut bid either by stopping after the first sentence, or by adding another sentence after the second sentence that even if the concessional forms C/D are not given the bid of Rs. 51.57 crores is an inclusive bid.

Summary

Issues:
Interpretation of bid terms regarding sales tax inclusion, Scope of judicial review in administrative matters.

Interpretation of Bid Terms:
The case involved a dispute over the interpretation of bid terms related to the inclusion of sales tax in the quoted prices. The respondent had submitted a bid stating that Central sales tax was inclusive in the price, but also mentioned that concessional forms C/D needed to be provided. The court analyzed the bid terms and concluded that the bid was ambiguous as it could be interpreted in two ways: either as an inclusive bid where no sales tax could be added, or that sales tax could indeed be added to the bid. The court noted that the respondent should have provided a clearer bid to avoid ambiguity. Ultimately, the court upheld the interpretation taken by the party responsible for making the payment, considering it a reasonable and possible interpretation.

Scope of Judicial Review in Administrative Matters:
The judgment also discussed the scope of judicial review in administrative matters. It emphasized that in administrative issues, judicial review is limited, and the judiciary must exercise restraint. Citing precedent, the court highlighted that administrative decisions should generally not be interfered with unless they are unreasonable or illegal. In this case, the court found that the interpretation taken by the party responsible for payment was reasonable, and therefore, the High Court should not have intervened. The judgment reiterated the limited scope of judicial review in administrative matters and upheld the decision in favor of the party responsible for payment, setting aside the High Court's judgment.

Conclusion:
The Supreme Court allowed the appeal, setting aside the impugned judgment of the High Court. The court emphasized the importance of clear bid terms to avoid ambiguity and upheld the reasonable interpretation taken by the party responsible for payment. Additionally, it reiterated the principle of limited judicial review in administrative matters, emphasizing that courts should exercise restraint and not interfere unless the administrative decision is unreasonable or illegal.