Bidder wins challenge after disqualification for false GST information when authority had waived compliance requirements

The Bombay HC ruled in favor of a bidder who was disqualified for allegedly providing false GST information in a tender. The court found that the tendering authority had waived condition 11 requiring GST returns and certificates, as evidenced by qualifying another non-compliant bidder and the rational basis for waiver under government exemptions. The authority's initial qualification of the petitioner despite GST non-compliance constituted a deliberate waiver, making subsequent disqualification on the same grounds unjustified. The petitioner was declared qualified and entitled to participate as the lowest bidder (L-1) in the tender process.

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Issues involved:
The issues involved in the judgment are the disqualification of the petitioner from the E-Tender process due to non-compliance with GST registration requirements, the alleged arbitrary actions of the Tendering Authority in disqualifying the petitioner, and the waiver of certain tender conditions by the Tendering Authority.

Disqualification due to GST non-compliance:
The petitioner challenged the disqualification from the E-Tender process based on non-compliance with GST requirements. The petitioner argued that the condition regarding GST registration was non-essential as services for the work under the tender were exempted from GST. The petitioner contended that another bidder who did not submit GST returns was still declared qualified. The Respondent justified the disqualification citing the petitioner's failure to submit the GST clearance certificate and cancellation of GST registration. The Court observed that the Tendering Authority had waived the condition no.11 regarding GST compliance, considering it non-essential, based on rational grounds. The Court concluded that the subsequent disqualification of the petitioner based on the same condition was arbitrary and malafide, intending to accommodate other bidders.

Alleged Arbitrary Actions of the Tendering Authority:
The petitioner objected to the actions of the Tendering Authority in inviting negotiations with the three lowest bidders instead of issuing the work order to the lowest bidder (L-1). The petitioner contended that such actions were contrary to the tender conditions. The Court found that the Tendering Authority's decision to call for negotiations instead of issuing the work order to the petitioner, who was the lowest bidder, was arbitrary and malafide. The Court noted that the Tendering Authority's actions seemed intended to accommodate other bidders who were ranked lower.

Waiver of Tender Conditions by the Tendering Authority:
The Court examined the waiver of condition no.11 by the Tendering Authority, which required GST registration and compliance. The Court found that the Authority had deliberately waived this condition, considering it non-essential, based on the nature of the contract and the exemption of services from GST. The Court cited previous judgments to support the Authority's right to deviate from strict compliance with tender conditions in appropriate cases. The Court concluded that since the petitioner was declared qualified despite not meeting the GST requirements initially, the subsequent disqualification based on the same condition was unjustified.

Conclusion:
The High Court of Bombay allowed the Writ Petition partly, quashing the communications that disqualified the petitioner from the E-Tender process. The Court held that the petitioner was qualified and entitled to participate in the further process of the E-Tender as the Lowest Bidder (L-1). The Court deemed the actions of the Tendering Authority as arbitrary and malafide and disposed of the Writ Petition accordingly, without imposing any costs.

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