Territorial writ jurisdiction and GST-inclusive bid treatment under tender terms were both rejected as grounds for unilateral reduction.

The Chhattisgarh HC held that territorial jurisdiction existed because the tender concerned a project in Chhattisgarh and part of the cause of action arose there under Article 226(2); a contractual jurisdiction clause could not exclude constitutional writ jurisdiction on that basis. On the tender merits, the Court held that where the conditions required the quoted base price to exclude GST and the tax was to be borne by the employer, the bid could not be unilaterally reduced by treating it as GST-inclusive, nor could coercive steps such as forfeiture of earnest money or blacklisting be imposed. The impugned action was quashed, leaving the respondents free to re-evaluate the bids or proceed afresh under the tender terms.

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Issues: (i) whether the High Court had territorial jurisdiction to entertain the writ petition; (ii) whether the respondents were justified in treating the bid as inclusive of GST, reducing the quoted amount, and threatening forfeiture of the earnest money deposit and blacklisting.

Issue (i): whether the High Court had territorial jurisdiction to entertain the writ petition.

Analysis: The tender related to a project situated in Chhattisgarh and part of the cause of action arose within the State. Article 226(2) of the Constitution of India permits exercise of writ jurisdiction where the cause of action, wholly or in part, arises within the territorial limits of the Court. A contractual clause conferring jurisdiction on another place could not by itself exclude the constitutional jurisdiction where part of the cause of action arose locally.

Conclusion: The objection to territorial jurisdiction was rejected and the writ petition was maintainable.

Issue (ii): whether the respondents were justified in treating the bid as inclusive of GST, reducing the quoted amount, and threatening forfeiture of the earnest money deposit and blacklisting.

Analysis: The tender conditions required the base price to be quoted excluding GST, while GST was to be borne by the employer. Section 9 of the Central Goods and Services Tax Act, 2017 fixed the tax liability, and the nature of works contract under Section 2(119) of that Act supported the conclusion that GST was not a variable element affecting bid comparison. If the bid was defective or ambiguous, the tender conditions permitted re-evaluation of the bid rather than unilateral reduction of the quoted amount or coercive action against the bidder. The respondents also failed to account for the amended GST rate structure applicable to the project.

Conclusion: The impugned action was unsustainable and was set aside.

Final Conclusion: The writ petition succeeded, the impugned proceedings were quashed, and the respondents were left at liberty to re-evaluate the bids or proceed afresh in accordance with the tender conditions and law.

Ratio Decidendi: Where tender terms require quoted prices to exclude GST and the tax is statutorily recoverable from the employer, the bid cannot be unilaterally reworked by deducting GST from the quoted amount; any defect must be dealt with through the tender's prescribed evaluation mechanism.

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