2024 (2) TMI 184 - HC - GST

Rejection of bids for settlement of a number of markets including a market named Balipara Weekly Market - petitioner s bid had not been accepted by the authorities as he did not submit his GST clearance certificate along with his bid - HELD THAT - The notice inviting tender dated 27.06.2023 provides at Clause 6(IX) that GST clearance certificate would have to be annexed to the bid documents, if necessary - Section 22(1) of the Central Goods and Services Tax Act, 2017 provides that every supplier shall be liable to be registered under the GST Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees. In the present case, there is nothing to show that the petitioner s annual aggregate turnover in a financial year is above twenty lakh rupees. In fact, the petitioner s bid value for the settlement of the market is only Rs. 1,01,000/-. As such, it was not necessary for the petitioner to include the GST clearance certificate in his bid/quotation. The reason for disqualifying the petitioner s bid by the respondent authority is not sustainable. The petitioner s bid/tender would have to be considered by the respondent authorities for settlement of the market along with the other eligible candidates. As his bid is Rs.1,01,000/- compared to the bid of the successful tenderer, i.e., the respondent No. 4, who had submitted a bid amount of Rs. 65,200/-, the settlement of the market would have to be done by the State respondent, which should in public interest - Consequently, the selection of the respondent No. 4, vide letter dated 02.08.2023, as successful bidder is hereby set aside. This writ petition is accordingly disposed of.

Summary

Issues involved:
The rejection of a bid for settlement of a market based on the non-submission of a GST certificate, and the subsequent challenge to this rejection.

Issue 1: Rejection of bid based on non-submission of GST certificate
The respondent No. 3 invited bids for the settlement of a market, and the petitioner submitted a bid without a GST certificate, which was deemed necessary according to the tender notice. The petitioner argued that as per the CGST Act, since their annual turnover did not exceed Rs. 20,00,000, they were not required to be registered under the CGST Rules and thus the GST certificate was not submitted. The respondent authorities settled the market in favor of another bidder who submitted a lower bid value, leading to the challenge of the rejection of the petitioner's bid.

Issue 2: Legal interpretation of GST requirements
The court analyzed Section 22(1) of the Central Goods and Services Tax Act, 2017, which states that a supplier shall be liable to be registered under the GST Act if their aggregate turnover exceeds twenty lakh rupees in a financial year. Since the petitioner's bid value was only Rs. 1,01,000, well below the threshold, it was determined that the petitioner was not required to include the GST clearance certificate in their bid. The court found that the rejection of the petitioner's bid based on the absence of the GST certificate was not justified under the law.

Conclusion:
The court ruled in favor of the petitioner, setting aside the selection of the successful bidder and directing the respondent authorities to reconsider the petitioner's bid along with other eligible candidates. The court emphasized that the settlement of the market should be done in the public interest, considering the petitioner's higher bid value compared to the previously selected bidder. The respondent authorities were instructed to make a fresh selection of the successful tenderer within one week from the date of the court's order. The writ petition was disposed of accordingly.