Tender condition barred sales tax collection from registered building-material dealers after contract acceptance

Condition No. 21 of the tender was construed to bar collection of sales tax on bajri from registered dealers dealing in building materials, because the registration certificates covered goods such as stones, marbles, granites, cement, cement wares and similar building materials. Bajri was treated by the department as a building material, and the reference in the clause to registered dealers in the mineral was not limited to dealers exclusively dealing in bajri. On that construction, the contractor was bound by the auction terms after accepting the contract and could not override them. The challenge to the notice, communication and Tribunal order therefore failed, and collection of sales tax from the concerned registered dealers was not permitted.

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Issues: Whether condition No. 21 of the tender barred the contractor from collecting sales tax on bajri from registered dealers dealing in building materials and, on a proper construction of the contract, whether the petitioner was entitled to collect such tax.

Analysis: The registration certificates showed that the dealers were registered for dealing in stones, marbles, granites, cement, cement wares, building materials and similar goods. Bajri was treated by the department as a building material, and the notification dated 9 September 1971 was relied on only to show that building material included bajri. On that basis, the reference in condition No. 21 to registered dealers dealing in the mineral was not confined to dealers exclusively dealing in bajri. The contractual clause therefore prohibited collection of tax from registered dealers of building materials in the auctioned area, and the petitioner could not avoid the contractual terms after accepting the contract.

Conclusion: The petitioner was not entitled to collect sales tax from the registered dealers concerned, and the challenge to the notice, communication and Tribunal order failed.

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