2020 (8) TMI 734 - HC - GST

Levy of GST - Works Contract - composite tax paid - tender rejected on the ground that the petitioner has not disclosed tax burden - petitioner argued that the petitioner has not disclosed tax burden since the petitioner has paid Composition levy under Section 10 of the GST Act - HELD THAT - The petitioner produced Ext.P9 statement for payment of self-assessed tax. Ext.P9 would show that the payment of self-assessed tax for the quarter January March 2019-'20, has been filed. But, it was filed only on 16.07.2020, which is much after filing of the writ petition. There is nothing on record to show that the petitioner was composite dealer as on the date of filing of the tender application. As the petitioner left the columns relating to tax element blank, respondents 1 and 2 could not assess the actual cost of the work in his bid. As the tender submitted by the petitioner was not complete in all respects, respondents 1 and 2 rejected the same - there are no illegality or arbitrariness on the part of respondents 1 and 2 in doing so. The tender process started in the year 2020 and Ext.P7 test report allegedly submitted by the petitioner is of the year 2017. When respondents 1 and 2 demanded test report, the bidders are expected to provide test reports of recent origin. Uploading of a three year old test report will not serve the purpose. For this reason also, rejection of petitioner's bid is justified. Petition dismissed.

Summary

Issues Involved:
Challenge to award of works contract based on alleged favoritism and incomplete tender submission.

Analysis:
1. The petitioner, engaged in works contract business, challenged the award of a works contract to the 5th respondent by the 2nd respondent. The petitioner contended that being the lowest tenderer, the work should have been allocated to him, alleging favoritism in the award process.

2. Respondents 1 and 2 opposed the petition, stating that the petitioner's tender had deficiencies. The petitioner failed to quote GST percentage and tax amount in the tender, which affected the assessment of the actual cost of the work. The 5th respondent, on the other hand, complied with all requirements, including mentioning the GST component.

3. The counter affidavit highlighted that the petitioner did not upload a relevant test report and failed to submit samples of LED street lights as mandated in the tender notice. Due to these omissions, the Grama Panchayat Procurement Committee decided to award the work to the 5th respondent.

4. The 5th respondent, in response, asserted that he fulfilled all qualifications and executed the agreement promptly. The 5th respondent also pointed out that the petitioner's tender contained discrepancies, such as leaving columns blank and quoting the same amount for both "excluding taxes" and "including taxes."

5. The petitioner argued that the tender process lacked transparency and that the 5th respondent was unduly favored. The petitioner highlighted discrepancies in the warranty period required by the tender conditions and the final agreement signed with the 5th respondent.

6. After hearing all parties, the Court found that the rejection of the petitioner's bid was justified. The petitioner's failure to disclose tax amounts and submit recent test reports were considered valid reasons for rejection. The Court also noted that the petitioner's claim of being a composite dealer was not substantiated by timely evidence.

7. Regarding the warranty issue, the Court accepted the explanation that the warranty period was negotiated and finalized post-tender, dismissing the petitioner's allegation of favoritism. Consequently, the Court dismissed the writ petition, finding it lacking in merit.