2022 (10) TMI 991 - HC - GST

AI/ML Reservoir Modeling Tender Halted Over GST Rate Inconsistencies, Interim Order Blocks Procurement Process

Oil India Limited NIT for AI/ML reservoir modeling services challenged due to GST rate discrepancies. HC issued interim order halting tender proceedings, ... Levy of GST - work pertains to hiring of services for Artificial Intelligence Machine Learning based reservoir modeling, both static and dynamic - petitioner alleges that the tender notice fails to specify a uniform GST rate applicable to all bidders for the services - HELD THAT:- On balancing the equities, this Court is of the opinion that interest of justice as well as public interest would be served if an interim order is passed at this stage. Accordingly, it is provided that no further action be taken by the respondent nos. 1 & 2 OIL in furtherance to the LOI dated 01.07.2022 and the respondent no. 3 is accordingly directed not to further advance with the work which is the subject matter of this writ petition till the returnable date. Since, the work is of public interest, an endeavor would be made to dispose of the writ petition on the returnable date, on which date, the learned counsel representing the OIL is directed to produce the records - List this case after 4(four) weeks. Issues:1. Challenge to evaluation mechanism in a NIT issued by Oil India Limited regarding hiring of services for Artificial Intelligence Machine Learning based reservoir modeling.2. Allegation of lack of uniform GST rate specification in the tender notice leading to evaluation discrepancies.3. Discrepancy in bid values and GST rates quoted by the petitioner and respondent no. 3.4. Maintainability of the writ petition due to already issued Letter of Intent (LOI) and mobilization by the respondent.5. Request for an interim order to halt further actions by the respondents pending a detailed review.Analysis:1. The writ petition challenges the evaluation mechanism in a Notice Inviting Tender (NIT) issued by Oil India Limited for hiring services related to Artificial Intelligence Machine Learning based reservoir modeling. The petitioner alleges that the tender notice lacks a uniform GST rate specification for all bidders, leading to discrepancies in bid evaluation based on diverse GST rates quoted by the parties. This discrepancy is argued to compromise the concept of competitive bids.2. The petitioner's bid value is approximately Rs. 7.51 Crores with GST quoted at 18%, totaling Rs. 8.87 Crores, while the respondent no. 3 bid is around Rs. 8 Crores with GST quoted at 12%, totaling Rs. 8.96 Crores. The petitioner contends that despite the requirement to quote GST, there should be uniformity in the rates for the services offered to maintain fairness in the bidding process.3. The respondent no. 3 argues that the writ petition is not maintainable as the Letter of Intent (LOI) has already been issued, and mobilization for the work has commenced. The respondent further claims that any ambiguities should have been clarified during the pre-bid meeting, and since the petitioner did not seek clarification then, they are estopped from raising issues post bid evaluation.4. After considering the submissions from both parties and balancing the equities, the Court decides to issue an interim order. The order prohibits further actions by Oil India Limited and directs the respondent no. 3 to halt progress on the subject work until the next hearing date. The Court emphasizes the importance of serving the interest of justice and public interest in making this decision.5. Due to the public interest nature of the work involved, the Court aims to expedite the disposal of the writ petition on the returnable date. The counsel representing Oil India Limited is directed to produce the necessary records on that date. The case is listed for the next hearing after four weeks to review the progress and submissions made by both parties.