2015 (3) TMI 872 - HC - VAT and Sales Tax

Rejection of assessee's tender - tender of the petitioner has been rejected for the reason that the petitioner has not produced the TIN number and has also collected the demand draft of amount of earnest money - Held that - It is the terms and conditions of each department as to whether the registration under the Act is required or not. In fact, the terms and conditions, as attached with the petition, does not make any of the condition as directory. It appears that the tenderers are required to respond to each of the conditions - The purpose of registration under the Act is for deduction of tax at source from the works contract for which tenders were invited. Not only the petitioner is not registered under the Act but the petitioner has also taken his earnest money back. In view thereof, the petitioner ceases to be a willing tenderer in response to the tender for construction of pre-fab shelter. - inadvertent mistake in the communication will not confer any right as TIN number is a requirement of the Act whereas the Permanent Account Number is the requirement of the Income Tax Act,1961. - No merit in appeal - Decided against assessee.

Summary

Issues:
Challenge to rejection of tender offer due to non-disclosure of Taxpayer Identification Number (TIN)/Central Sales Tax (CST) Number.

Analysis:
The petitioner's challenge in the writ petition was against the rejection of their offer in response to a tender for the construction of a pre-fab shelter due to non-disclosure of the Taxpayer Identification Number (TIN)/Central Sales Tax (CST) Number as required by the terms and conditions of the tender. The communication dated 30.01.2015 stated that the petitioner failed to produce the TIN number and had collected the demand draft for the earnest money without meeting the specified requirements. The petitioner argued that since other departments where they worked did not require the TIN number, it was not mandatory. However, the court found no merit in this argument, emphasizing that it is up to each department to decide on such requirements, and the tender form did not make the condition of registration under the Act as directory.

The court noted that the purpose of registration under the Act was for tax deduction at source from works contracts, for which tenders were invited. Since the petitioner was not registered under the Act and had taken back the earnest money, they were no longer a willing tenderer for the pre-fab shelter construction project. The court highlighted that the TIN number requirement was distinct from the Permanent Account Number required by the Income Tax Act, 1961. Therefore, the inadvertent mistake in the communication regarding the necessity of the TIN number did not grant the petitioner any rights.

In conclusion, the court dismissed the writ petition, stating that the rejection of the petitioner's tender offer due to non-disclosure of the TIN number was justified based on the terms and conditions of the tender, which all participants were required to adhere to uniformly. The court upheld the decision of the tendering board to reject the bid as the petitioner did not meet the defined terms and conditions, including the requirement of disclosing the TIN number, necessary for tax deductions in works contracts.