2020 (3) TMI 291 - HC - GST

Award of Contract - Tender for outsourcing of house keeping and security services - Determination of GST liability - HELD THAT - The bid offered by the 4th respondent need not be rejected. It has also been pointed out by the learned Senior Counsel for the 4th respondent that they would take up the burden of payment of GST. At this stage, this Court is not examining whether GST is applicable or not applicable for the Service for which the tender had been floated. This Court is not prepared to examine whether the prices offered by the 4th respondent and by the petitioner for Zone 1 to Zone 4 and Zone 5 respectively are competitive prices or not. They are to be decided only by the Tender Accepting Authority. This Court cannot substitute itself for the Tender Accepting Authority. Once the Tender Accepting Authority had decided not to reject the bid offered by the 4th respondent and had passed an order under Section 10 of the Tamil Nadu Transparency in Tenders Act, 1998, then, any aggrieved party can file an appeal as provided under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998. The scope of the Writ Petition cannot be expanded to determine whether the bid quoted by the 4th respondent is legal or illegal. The Writ Court while exercising its jurisdiction under Article 226 of the Constitution of India cannot venture into a roving examination of the facts and also cannot venture into applicability of certain provisions of law or not. The Writ Petitioners have embarked on a speculative journey to deliberately frustrate further progress in the tender process. Both the Writ Petitions have to suffer an order of dismissal and accordingly they are dismissed.

Issues Involved:
1. Legality of the bid submitted by the 4th respondent without including GST.
2. Compliance with the Tamil Nadu Transparency in Tenders Act, 1998 and Rules.
3. Premature filing of the writ petition before the completion of the tender process.
4. Determination of the lowest evaluated price and negotiation process.
5. Jurisdiction and scope of judicial review in tender matters.

Detailed Analysis:

1. Legality of the bid submitted by the 4th respondent without including GST:
The petitioner claimed that the 4th respondent's bid should be disqualified for not including GST, as mandated by the tender document. The 4th respondent justified the non-inclusion of GST based on Notification No.12/2017 – Central Tax (Rate) dated 28.06.2017, which exempts certain services from GST. The 1st respondent sought an opinion from a GST consultant, who confirmed the exemption. The court noted that the 1st respondent had satisfied themselves regarding the legality of the 4th respondent's bid and had called for price negotiations.

2. Compliance with the Tamil Nadu Transparency in Tenders Act, 1998 and Rules:
The 1st respondent followed the provisions of the Tamil Nadu Transparency in Tenders Act, 1998, and the Rules thereunder. The tender was governed by these provisions, and any aggrieved tenderer could appeal to the Government within 10 days of the Tender Accepting Authority's decision. The 1st respondent's actions, including seeking expert opinions and conducting price negotiations, were within the legal framework.

3. Premature filing of the writ petition before the completion of the tender process:
The court observed that the writ petitions were filed prematurely, as the tender process was still at the evaluation stage and had not been approved by the Tender Accepting Authority. The proper course of action for the petitioners was to file an appeal under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998, after the notification of the award. The court emphasized that judicial review should not interfere with the tender process at this stage.

4. Determination of the lowest evaluated price and negotiation process:
The 1st respondent followed the procedure for determining the lowest evaluated price, including considering GST applicability. The 4th respondent was called for price negotiations and offered revised prices, which were still the lowest for Zones 1 to 4. The petitioner was also called for negotiations for Zone 5. The court noted that the Tender Accepting Authority is the best judge of its requirements and that judicial intervention should be minimal.

5. Jurisdiction and scope of judicial review in tender matters:
The court cited several Supreme Court judgments emphasizing restraint in judicial review of tender matters. Interference is permissible only if the decision-making process is arbitrary, irrational, or biased. The court cannot substitute its view for that of the administrative authority. The court held that the petitioners' actions were speculative and aimed at frustrating the tender process, leading to the dismissal of the writ petitions.

Conclusion:
The court dismissed both writ petitions, directing each petitioner to pay costs of ?5,00,000 to the Chief Justice Relief Fund, High Court of Madras. The court expressed displeasure over the petitioner's last-minute request to withdraw with liberty, emphasizing professional ethics. The connected Writ Miscellaneous Petitions were also closed.

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