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2024 (11) TMI 1268 - HC - Income TaxTender bid disqualified by the Technical Evaluation Committee - as alleged petitioners had submitted documents, which were not in conformity with Clause 13(h) of the NIT - petitioners counsel submits that the petitioners technical bid had been rejected on the ground that the petitioners had not submitted the copy of the income tax returns for the years 2022-23 - documents required under Clause 13(h) would come within the ambit of the Average Annual Financial Turnover provided as per Clause 3(b) of the NIT HELD THAT - Average Annual Financial Turnover would have to be considered to be different than an Income Tax Return and the exemption given under Clause 3(e) to MSEs, from submitting the Average Annual Financial Turnover in Clause 3(b) does not include within it s ambit Clause 13(h) of the NIT. There is also no provision for submission of the Average income tax returns for the last 3 years in either Clause 3(b) or Clause 3(h). Though the Income Tax Return can be supportive of the Average Annual Financial Turnover, the Average Annual Financial Turnover cannot be said to be the same as an Income Tax Return or vice versa. As an Income Tax Return cannot said to be an Average Annual Financial Turnover document, this Court holds that the relaxation provided to MSEs under Clause 3(e) would not cover the Income Tax Returns required to be submitted by a bidder under Clause 13(h). As the petitioners have submitted only the Income Tax Returns for 2 years, which is not in consonance with the requirement of filing the Income Tax Returns for 3 years, this Court does not find any infirmity with the decision of the respondent authorities in disqualifying the petitioners Technical Bid.
Issues Involved:
1. Whether the documents required under Clause 13(h) of the NIT fall within the ambit of "Average Annual Financial Turnover" as per Clause 3(b) and whether Clause 3(e) exempts the petitioners from submitting Income Tax Returns for three years. 2. Distinction between "Turnover" and "Income Tax Return." 3. Judicial restraint in the interpretation of tender documents by courts. Detailed Analysis: 1. Applicability of Exemption under Clause 3(e) to Clause 13(h): The core issue was whether the exemption provided to Micro and Small Enterprises (MSEs) under Clause 3(e) of the Notice Inviting Tender (NIT) also applied to the requirement of submitting Income Tax Returns as per Clause 13(h). The petitioners argued that as MSEs, they were exempt from submitting documents related to average annual financial turnover and experience under Clause 3(b) and 3(c), and hence, should not be required to submit Income Tax Returns for the year 2022-23. However, the court found that Clause 13(h), which mandates the submission of Income Tax Returns and annual audited reports for the last three financial years, is distinct from the requirements under Clause 3(b). The exemption under Clause 3(e) does not extend to Clause 13(h), as the latter pertains to the "Schedule of Requirement" for the technical bid, which is crucial for bid evaluation. Therefore, the court concluded that the petitioners' failure to submit the Income Tax Return for 2022-23 justified the rejection of their technical bid. 2. Distinction between "Turnover" and "Income Tax Return": The court elaborated on the difference between "Turnover" and "Income Tax Return." Turnover is defined as the total revenue generated from sales before deducting expenses, serving as a measure of business activity. In contrast, an Income Tax Return is a comprehensive report filed with tax authorities, detailing income, deductions, and tax liabilities, which may include income from various sources beyond sales. The court emphasized that while turnover is a criterion for assessing financial strength, Income Tax Returns are necessary for tax compliance. The court cited the Supreme Court's interpretation in the case of Commissioner of Income Tax-VII, New Delhi vs. Punjab Stainless Steel Industries, which clarified that "turnover" refers to "total sales" and does not include non-operational income. Consequently, the court determined that the two terms are not interchangeable, and the exemption for turnover under Clause 3(e) does not apply to the requirement of submitting Income Tax Returns under Clause 13(h). 3. Judicial Restraint in Tender Document Interpretation: The court underscored the principle of judicial restraint in the interpretation of tender documents, citing precedents from the Supreme Court. It reiterated that the author of the tender document is best positioned to interpret its requirements, and courts should exercise minimal interference unless the decision is arbitrary or unreasonable. The court referred to the cases of Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. and Silppi Constructions Contractors vs. Union of India, which emphasize that courts should defer to the expertise of the tendering authority and avoid substituting their judgment for that of the authority. The court concluded that the interpretation of the tender requirements by the respondent authorities was not arbitrary or unreasonable, and thus, judicial intervention was unwarranted. Conclusion: The court dismissed the writ petition, holding that the petitioners' failure to submit the required Income Tax Returns for three years, as mandated by Clause 13(h), was a valid ground for disqualification. The exemption under Clause 3(e) did not extend to the requirements of Clause 13(h), and the distinction between turnover and Income Tax Returns was upheld. The court emphasized the importance of adhering to the specific requirements of tender documents and the limited scope of judicial review in such matters.
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