Tender Bid Dispute: GST Certificate Technicality Overturned, Higher Bid Reinstated with Mandatory Fresh Evaluation

Bid Rejection Case: HC analyzed GST certificate requirements for market settlement tender. Petitioner's bid was improperly rejected due to absence of GST certificate, despite falling below statutory registration threshold. Court invalidated previous market settlement, directed respondents to re-evaluate bids considering petitioner's higher bid value, and mandated fresh tender selection within one week in public interest.

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Issues involved:
The rejection of a bid for settlement of a market based on the non-submission of a GST certificate, and the subsequent challenge to this rejection.

Issue 1: Rejection of bid based on non-submission of GST certificate
The respondent No. 3 invited bids for the settlement of a market, and the petitioner submitted a bid without a GST certificate, which was deemed necessary according to the tender notice. The petitioner argued that as per the CGST Act, since their annual turnover did not exceed Rs. 20,00,000, they were not required to be registered under the CGST Rules and thus the GST certificate was not submitted. The respondent authorities settled the market in favor of another bidder who submitted a lower bid value, leading to the challenge of the rejection of the petitioner's bid.

Issue 2: Legal interpretation of GST requirements
The court analyzed Section 22(1) of the Central Goods and Services Tax Act, 2017, which states that a supplier shall be liable to be registered under the GST Act if their aggregate turnover exceeds twenty lakh rupees in a financial year. Since the petitioner's bid value was only Rs. 1,01,000, well below the threshold, it was determined that the petitioner was not required to include the GST clearance certificate in their bid. The court found that the rejection of the petitioner's bid based on the absence of the GST certificate was not justified under the law.

Conclusion:
The court ruled in favor of the petitioner, setting aside the selection of the successful bidder and directing the respondent authorities to reconsider the petitioner's bid along with other eligible candidates. The court emphasized that the settlement of the market should be done in the public interest, considering the petitioner's higher bid value compared to the previously selected bidder. The respondent authorities were instructed to make a fresh selection of the successful tenderer within one week from the date of the court's order. The writ petition was disposed of accordingly.

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