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2020 (12) TMI 944 - HC - GSTSeeking quashing of the selection of the respondent No.4 as L-1 bidder - seeking declaration that the bid of the respondent No.4 should be rejected as being non-responsive - It is the contention of the petitioner that the bid of the respondent No.4 does not comply with the tender conditions viz Clause 6.10.3, Clause 6.10.5 and 18 of the Instructions to the Bidders and it ought to have been rejected as non-responsive - HELD THAT - The bidder had to indicate the exact rate of customs duty and applicable item of custom tariff under which it is covered. The amendment dated 04.01.2019 whereby a new Clause 6.10.5 was introduced, mandated that the tenderer had to state in its offer, the GST etc. whichever is applicable in India, over and above the prices being quoted. Instruction 7 of Annexure-1 prescribed that the bidders must not indicate the separate discount, if any. A perusal of the technical bid shows that the petitioner has indicated the rate of the GST which was applicable. However, in the commercial bid, respondent No.4 has indicated 000 against the column total amount of GST/IGST meaning thereby, that respondent No.4 was not passing on the tax element to the respondent No.1 to 3/Prasar Bharti. As rightly submitted by Mr. Sharma, learned counsel for the respondent No.1 to 3/Prasar Bharti that there is nothing in the tender which shows that it is mandatory for a bidder to pass on the tax element to respondent No.1 to 3/Prasar Bharti. It is up to the bidder to decide whether or not to pass on the tax element to the respondent No.1 to 3/Prasar Bharti. It is not mandatory in law that a dealer has to collect the tax from the purchaser and pass it on to the Government. A dealer is permitted to absorb the tax element in the price offered. The Government is only interested in getting the tax payable on the sale and is not concerned as to whether the tax element is passed on to the consumer or not. In this view of the matter, there are no anomaly in the decision making process adopted by the respondent No.1 to 3/Prasar Bharti. Since it is not necessary to pass on the tax element to the consumer and the respondent No.4 has decided to absorb the tax element in the cost of the products itself, respondent No.1 to 3/Prasar Bharti was justified in coming to the conclusion that the respondent No.4 is L-1 - there are no fault in the approach adopted by the respondents No.1 to 3/Prasar Bharti. There are no flaw in the decision making process adopted by the respondent No.2. Nor can the decision of the authority be said to be so arbitrary or irrational, that would warrant interference under Article 226 of Constitution of India - petition dismissed.
Issues Involved:
1. Compliance with tender conditions. 2. Evaluation of financial bids. 3. Absorption of tax component by the bidder. 4. Judicial review of tender decisions. Issue-wise Detailed Analysis: 1. Compliance with Tender Conditions: The petitioner sought the quashing of the selection of respondent No.4 as the L-1 bidder, arguing that respondent No.4's bid was non-responsive due to non-compliance with specific tender conditions, particularly Clauses 6.10.3, 6.10.5, and 18 of the "Instructions to the Bidders." The petitioner contended that respondent No.4 failed to separately mention the GST component in their bid, which was a mandatory requirement. 2. Evaluation of Financial Bids: The petitioner argued that the financial bid of respondent No.4 did not comply with the tender instructions, as it did not specify the GST rate separately. According to the petitioner, if the GST component was excluded from respondent No.4's bid, the petitioner's bid would have been lower. However, the respondent countered that respondent No.4 chose not to pass on the sales tax component to Prasar Bharti, which was permissible under the tender terms. 3. Absorption of Tax Component by the Bidder: The court noted that the tender documents did not mandate bidders to pass on the tax element to Prasar Bharti. It was within the bidder's discretion to absorb the tax component in the price offered. The court found that the approach adopted by respondent No.4, where they indicated "000" against the GST column, was not a deviation from the tender conditions. The court also rejected the petitioner's offer to waive off the tax component at this stage, stating it would amount to rewriting the bid post submission. 4. Judicial Review of Tender Decisions: The court referred to principles laid down in previous judgments, emphasizing that judicial interference in tender matters is limited to instances where the process is found to be arbitrary, irrational, or mala fide. The court concluded that the decision-making process by Prasar Bharti was neither arbitrary nor irrational. The court cited the case of Michigan Rubber (India) Ltd. v. State of Karnataka, outlining the limited scope of judicial review in tender processes. Conclusion: The court dismissed the writ petition, holding that there was no flaw in the decision-making process of Prasar Bharti. The court found that respondent No.4's decision to absorb the tax component did not amount to a discount and was within the permissible tender conditions. The petitioner's late offer to absorb the tax component was not entertained, as it would constitute an amendment to the bid post submission. Final Judgment: The writ petition was dismissed as meritless, and no orders as to costs were issued.
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