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2025 (4) TMI 55 - HC - GSTBlacklisting of the petitioner by the respondents - violation of principles of natural justice - HELD THAT - It is not in dispute that the Purchase Orders were issued to the petitioner on 10.10.2022 and 28.10.2022 specifying timelines for such supplies of 45 days and 30 days respectively but the timelines were not adhered to by the petitioner. The petitioner instead was complaining about certain discrepancies in the Purchase Orders with the tender. Similar delay occurred in supply pursuant to the purchase order dt. 24.11.2023. If the petitioner was not supplying the materials pursuant to purchase orders within the timelines and the respondents had issued show-cause notice for blacklisting and considered the explanation offered by the petitioner and then decided to blacklist the petitioner for 03 years on 19.07.2024 the action of the respondents cannot be found fault with. There has been no violation of principles of natural justice and if at any point of time the petitioner felt that the respondents were at fault nothing prevented the petitioner from terminating the agreement. Petition dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS Issue 1: Blacklisting of the Petitioner The legal framework surrounding blacklisting involves ensuring that the process is not arbitrary and complies with principles of natural justice. The respondents issued multiple purchase orders to the petitioner, which were not fulfilled within the specified timelines. The petitioner contended that the blacklisting was a mala fide action intended to exclude it from future tenders. The Court examined the sequence of events, including the issuance of show-cause notices and the petitioner's responses. The respondents' decision to blacklist was based on repeated delays by the petitioner in fulfilling contractual obligations, as evidenced by the purchase orders dated 10.10.2022, 28.10.2022, and 24.11.2023. The Court found that the respondents had duly considered the explanations provided by the petitioner before deciding on blacklisting. In applying the law to the facts, the Court concluded that the respondents' actions were justified and not arbitrary. The petitioner had not adhered to the timelines, and the respondents had followed due process by issuing show-cause notices and considering the petitioner's replies. Issue 2: Violation of Principles of Natural Justice The principles of natural justice require that a party be given a fair opportunity to present their case before any adverse action is taken. The petitioner argued that these principles were violated in the blacklisting process. The Court found that the petitioner was given multiple opportunities to respond to the show-cause notices. The explanations provided by the petitioner were evaluated by the Tender Committee, which ultimately rejected them based on the contractual obligations outlined in Clause 12 of the Agreement. The Court determined that the petitioner had been afforded a fair hearing and that there was no violation of natural justice. Issue 3: Alleged Discrepancies in Purchase Orders The petitioner claimed that discrepancies in the purchase orders, specifically regarding the inclusion of GST contrary to the tender specifications, justified its non-compliance. The petitioner communicated these discrepancies to the respondents and requested corrections. The Court noted that the petitioner did not supply the materials within the timelines and instead focused on alleged discrepancies. The petitioner had the option to terminate the agreement if it believed the respondents were at fault, but it did not pursue this course of action. In addressing competing arguments, the Court emphasized that the petitioner was required to fulfill its contractual obligations regardless of the discrepancies, as it had not taken formal steps to resolve the issue through termination or legal challenge at the appropriate time. SIGNIFICANT HOLDINGS The Court held that the blacklisting of the petitioner was justified and not arbitrary. The respondents followed due process by issuing show-cause notices and considering the petitioner's explanations. The Court found no violation of principles of natural justice, as the petitioner had ample opportunity to present its case. The Court concluded that the petitioner failed to comply with the purchase orders within the specified timelines and did not take appropriate action to address the alleged discrepancies. The petitioner's writ petition was dismissed, and a cost of Rs. 25,000 was imposed, to be paid to the Jharkhand High Court Services Committee within four weeks.
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