2007 (11) TMI 560 - HC - VAT and Sales Tax

Participation in auction - Notification dated June 11 2007 challenged - Held that - High Court shall not adopt any generous and casual approach in applying the right to livelihood under article 21 of the Constitution of India to a case involving contractual dispute. In this case the petitioner having agreed to the terms and conditions of the notification and consciously participated in the auction and his bid was also confirmed is estopped from seeking any relief contrary to the tender notification. The tender conditions cannot be altered after the parties entered into the arena. The petitioner failed to comply with the conditions mentioned in the tender notification dated July 11 2006 besides that the period of licence already expired and that the impugned notification dated June 11 2007 was cancelled and fresh tender notification dated June 21 2007 was issued by the third respondent in which the fourth respondent has offered the highest amount this court is of the view that both the writ petitions are liable to be dismissed and accordingly they are dismissed.

Summary

Issues:
1. Dispute regarding payment of sales tax and surcharge for a fishing license.
2. Challenge against the issuance of a fresh tender notification by the third respondent.
3. Highest bid offered by the fourth respondent in an auction.

Issue 1: Dispute regarding payment of sales tax and surcharge for a fishing license:
The petitioner participated in an auction for fishing rights and rearing fingerlings in a lake. The petitioner offered the highest bid, and the auction was confirmed in his favor. However, the third respondent demanded payment of sales tax and surcharge, which the petitioner contested citing a sales tax exemption on fish. The court previously ruled in favor of the petitioner regarding the tax issue. The third respondent issued a fresh tender notification without renewing the license, leading to a legal challenge.

Issue 2: Challenge against the issuance of a fresh tender notification by the third respondent:
The third respondent issued a fresh tender notification despite the pending legal matters and without renewing the petitioner's license. The respondent argued that the petitioner failed to pay the full bid amount within the stipulated time, making him ineligible for renewal. The court examined the relevant rules governing fishery rights leases, emphasizing the authority of local bodies to enhance lease amounts annually. The court highlighted the limitations of invoking Article 226 for contractual disputes and cited Supreme Court decisions emphasizing adherence to tender conditions.

Issue 3: Highest bid offered by the fourth respondent in an auction:
The fourth respondent offered the highest bid in a subsequent auction conducted by the third respondent. However, the court granted an interim order, preventing the confirmation of this bid. The court considered the petitioner's failure to comply with tender conditions, the expiry of the license period, and the subsequent cancellation of the impugned notification. Consequently, the court dismissed the writ petitions challenging the fresh tender notification and auction outcome.

In conclusion, the court dismissed the writ petitions due to the petitioner's failure to meet tender conditions, the expiration of the license period, and the subsequent auction conducted with a higher bid. The court emphasized adherence to tender terms and limitations on invoking legal remedies for contractual disputes.