2010 (12) TMI 1093 - HC - VAT and Sales Tax

Whether the respondents before terminating the contract or rejection of the tender application submitted by the petitioner company have not at all appreciated the fact that the demand due already stood satisfied on October 11, 2010, that is prior to inviting fresh tenders on October 13, 2010? Held that - The respondents instead of doing so granted an opportunity to the petitioner to deposit the due amount but he did not choose to do so. In these circumstances, the decision taken by the respondents on October 4, 2010 to cancel the petitioner s tender is in accordance with the terms and conditions of the tender notice. The respondents before terminating the contract or rejection of the tender application submitted by the petitionercompany have not at all appreciated the fact that the demand due already stood satisfied on October 11, 2010, that is prior to inviting fresh tenders on October 13, 2010The petitioner, not only before the respondents but before this court too, tried to conceal the terms and conditions applicable for grant of a contract, those are quite material for adjudication of the issue. The petitioner, along with the petition for writ has placed on record copy of the notice inviting tender but has not placed on record the terms and conditions prescribed by the Commercial Taxes Department for grant of contract. No adequate explanation is also given for not placing such an important document on record. Thus not inclined to invoke extraordinary powers of this court as prayed for in this matter. Appeal dismissed.

Summary

Issues:
- Interpretation of tender conditions regarding existing departmental dues
- Validity of cancellation of tender and issuance of fresh notice
- Consideration of conduct of petitioner in granting relief under article 226 of the Constitution of India

Interpretation of Tender Conditions Regarding Existing Departmental Dues:
The case involved a dispute where the petitioner submitted a tender for revenue collection but had an existing departmental due against them. The respondents canceled the tender based on clause 14 of the tender conditions, which prohibited acceptance of tenders with existing dues. The petitioner argued that the due had been satisfied before the fresh tenders were invited. However, the court held that the mere pendency of a rectification application did not absolve the petitioner from the liability of the existing demand. The court found that the rejection of the tender was in accordance with the terms and conditions of the tender notice due to the existing departmental dues.

Validity of Cancellation of Tender and Issuance of Fresh Notice:
The respondents canceled the petitioner's tender and issued a fresh notice inviting tenders. The petitioner challenged this decision through writ petitions seeking to quash the fresh notice and reinstate the original contract. The court noted that the petitioner failed to deposit the due amount despite being given an opportunity. The court found that the decision to cancel the tender and invite fresh tenders was in line with the tender conditions. The court emphasized that the petitioner's conduct, including concealing departmental dues and misleading statements, did not entitle them to relief under article 226 of the Constitution of India.

Consideration of Conduct of Petitioner in Granting Relief under Article 226:
The court highlighted the petitioner's conduct in denying departmental dues while applying for the tender, which was seen as an attempt to mislead the department. The court noted that the petitioner intentionally concealed important information and made false statements to secure the tender. The court found that the petitioner's conduct, including delayed filing of writ petitions, did not warrant the invocation of extraordinary powers of the court. Therefore, the court dismissed the writ petitions based on the totality of facts and circumstances presented.

In conclusion, the court upheld the cancellation of the petitioner's tender due to existing departmental dues, validated the issuance of a fresh tender notice, and denied relief to the petitioner based on their conduct and failure to comply with the tender conditions.