GST Inclusion in Generator Set Contract Bid Rates Upheld, Petitioner's Additional Payment Claim Rejected

HC dismissed petitioner's writ petition challenging GST payment in a generator set contract. The court ruled that tender documents clearly mandated GST inclusion in bid rates, and the petitioner could not claim additional GST after contract execution. University's obligation to pay GST on intra-State services was upheld, rejecting the petitioner's post-contract claim as impermissible.

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Issues:
1. Payment of balance amount due towards GST in a contract for supply and service of a diesel generator set.
2. Interpretation of tender document provisions regarding inclusion of GST in bids.
3. Legal obligation of the University to pay GST on services availed.
4. Claim of GST amount by the petitioner after securing the contract.

Analysis:

Issue 1: Payment of balance amount due towards GST
The petitioner, having submitted running bills for supply and service, requested the release of the balance amount due towards GST. The respondent released a partial amount but rejected the request citing the University's practice of not paying GST on service contracts. The petitioner sought a writ of mandamus for the outstanding balance. The argument was based on the statutory obligation of the University to pay GST on all intra-State supplies, including services, as per the Goods and Services Tax Act.

Issue 2: Interpretation of tender document provisions
The petitioner contended that the tender document did not specify inclusion of GST in bids, allowing him to submit a bid without GST. However, the Standing Counsel highlighted Clause 11(f) of the General Conditions of Tender, which mandated that all rates quoted should be inclusive of sales tax, now understood as goods and service tax post-GST regime. The petitioner's acceptance of payments without GST and failure to clarify the GST inclusion before bidding were emphasized.

Issue 3: Legal obligation to pay GST on services
The University argued that the petitioner, by participating in the tender and securing the contract, could not claim GST amount additionally. Payment inclusive of 18% GST for the generator set was made, establishing the University's liability to pay GST for other electrical works as well. The petitioner's acceptance of payments without GST for the initial parts of the contract was used to counter the claim for additional GST.

Issue 4: Claim of GST amount post-contract
The petitioner's counsel argued that the tender schedule did not allow for including GST, preventing corrections post-submission. However, the Court held that the tender document mandated inclusion of GST, and the petitioner's post-contract claim for GST was not sustainable. It was emphasized that challenging bid conditions post-securing the contract was impermissible, and factual disputes were not to be resolved through a writ petition under Article 226.

In conclusion, the Court dismissed the writ petition, emphasizing that the petitioner's challenge to bid conditions post-contract was untenable, and the University's liability to pay GST for services availed was established through the terms of the tender document and the petitioner's actions during the contract execution.

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