Tender conditions require strict compliance; VAT-related papers and exclusive-of-tax quotations cannot cure non-conforming bids.

Judicial review in tender matters is confined to the legality of the decision-making process, and courts interfere only for arbitrariness, bias, lack of transparency, motive, or illegality; essential tender conditions require strict compliance. A sales tax clearance requirement may reflect the substance of a tax on sale of goods even if VAT nomenclature is used, but a registration certificate under a composition scheme for civil works does not satisfy a tender for supply of blankets. A quotation expressed exclusive of VAT also fails where rates must be inclusive of all taxes and charges. The earnest money condition was met on the accepted contract value, so no disqualification arose on that ground.

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Issues: (i) whether a writ appeal can entertain a new legal plea and the extent of judicial review in tender matters; (ii) whether a requirement of furnishing a sales tax clearance certificate in a tender notice could be satisfied by a VAT-related certificate and whether a registration certificate under a composition scheme for civil works complied with the tender condition; (iii) whether a tender quoted exclusive of VAT satisfied a condition requiring rates inclusive of all taxes and charges; (iv) whether the appellant failed to comply with the earnest money condition.

Issue (i): Whether a writ appeal can entertain a new legal plea and the extent of judicial review in tender matters.

Analysis: A writ appeal is a continuation of the original writ proceeding, and a new pure question of law, or a matter already supported by undisputed record materials, may be examined if it assists complete adjudication. At the same time, judicial review in contractual matters is confined to the decision-making process and interference is justified only where the action is arbitrary, biased, non-transparent, motivated, or contrary to law or public interest. Essential tender conditions ordinarily require strict adherence.

Conclusion: The new plea based on the VAT registration certificate could be examined, and the scope of interference remained limited to legality of the tender process.

Issue (ii): Whether a requirement of furnishing a sales tax clearance certificate in a tender notice could be satisfied by a VAT-related certificate and whether a registration certificate under a composition scheme for civil works complied with the tender condition.

Analysis: VAT is a modern form of sales tax levied on sale of goods, and the shift in nomenclature does not alter the essential character of the levy. A tender condition requiring a sales tax clearance certificate was therefore to be understood as requiring proof that no tax on sale of goods remained outstanding. However, the certificate produced by the writ petitioner was a registration certificate under the composition scheme for civil works, and the supply of woollen blankets was a contract for sale, not a works contract. The certificate was thus unrelated to the item tendered and did not satisfy the tender requirement.

Conclusion: The writ petitioner did not comply with the requirement of furnishing the prescribed tax registration or clearance certificate, and the tender was invalid on that count.

Issue (iii): Whether a tender quoted exclusive of VAT satisfied a condition requiring rates inclusive of all taxes and charges.

Analysis: The tender notice required quoted rates to be inclusive of all taxes and charges. The writ petitioner's quotation expressly stated that rates were excluding VAT. Once VAT was added, the effective rate became higher than the appellant's rate. A bare declaration of willingness to abide by tender conditions could not cure non-compliance with an essential pricing condition.

Conclusion: The writ petitioner's quoted rate did not satisfy the tender condition and could not be treated as the lowest valid bid.

Issue (iv): Whether the appellant failed to comply with the earnest money condition.

Analysis: The tender required earnest money at two per cent of the estimated value of the articles tendered for. The appellant had deposited earnest money sufficient for the contract value ultimately accepted by the authorities, and the tender process contemplated only the accepted item and rate. The amount deposited therefore met the tender requirement.

Conclusion: The appellant did not incur disqualification for want of earnest money compliance.

Final Conclusion: The writ petitioner had failed to satisfy essential tender conditions, the award in favour of the appellant was sustainable, and the judgment of the single judge was liable to be set aside.

Ratio Decidendi: In judicial review of tenders, the court interferes only when the decision-making process is unlawful or arbitrary, and essential tender conditions must be strictly complied with; a certificate or quotation that does not match the tender's substantive requirement cannot be treated as valid compliance.

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