2025 (10) TMI 56 - HC - GST

Failure to file updated GSTR-3B was material non-compliance making bid non-responsive; petitions dismissed for lack of merit

HC held the requirement to submit an updated GSTR-3B with the tender was a material condition; the petitioner's failure to file the return within the ... Requirement of submitting the latest GSTR-3B return under Condition No. 4 of the e-NIB - merely procedural or a material condition? - requiremnet to file within the prescribed date - HELD THAT:- As per the documents examined therein and the facts presented, the appellant therein was required to attach an updated GSTR Form No.3B to the tender documents, however, the present petitioner(s) have failed to comply with the said requisite and therefore, the same were declared non-responsive by the Technical Bid Evaluation Committee. The Court further notes that there is no cogent explanation is made by the learned counsel appearing for the petitioner–firm as to why the return for March, 2024–25 was filed only after a lapse of nearly three months and not within the stipulated time prior to the last date of bid submission. Moreover, in a similar controversy, in Arav Infratech Private Limited [2021 (12) TMI 1532 - BOMBAY HIGH COURT] the Court has declined to interfere, holding that the requirement of GST compliance was mandatory. The Court therein also ruled that non-acceptance of bids on account of such non-compliance could not be termed as perverse, arbitrary, or mala fide. It was further observed that in the absence of overwhelming public interest or demonstrable mala fides, judicial review was not warranted. Upon due consideration of Rule 59 of Rajasthan Transparency in Public Procurement Rules, 2013, this Court is of the considered view that the non-filing of the GSTR–3B return within the prescribed period by the petitioner–firm constitutes a material deviation and omission. Moreover, the same is inconsistent with the bidding conditions and substantially affects the validity of the bid, thereby falling within the ambit of material non-compliance. Moreso, reliance can be placed upon the ratio enunciated in Jagdish Mandal Vs. State of Orissa and Ors. [2006 (12) TMI 447 - SUPREME COURT], wherein, it was directed that judicial review should not be exercised in tender matters. This Court finds no ground to interfere in the matter. Consequently, the writ petitions being bereft of any merits are hereby dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether failure to submit the 'latest GSTR-3B return' by the bid submission cut-off constitutes a material deviation or a curable procedural lapse under Rules 59-61 of the Rajasthan Transparency in Public Procurement Rules, 2013. 2. Whether the procuring entity's interpretation of a tender condition making GSTR-3B mandatory is amenable to judicial interference in absence of mala fides, arbitrariness or overwhelming public interest. 3. Whether belated filing of the GSTR-3B (filed after bid cut-off) can be treated as compliance for purposes of responsiveness when competing bidders complied within time. 4. Whether the petitioner's other technical documents (turnover/experience certificate) suffer such deficiencies as to affect eligibility under the tender's Evaluation and Qualification Criteria (including seven-year experience and financial resource requirements). ISSUE-WISE DETAILED ANALYSIS Issue 1 - Materiality of non-submission of 'latest GSTR-3B' (Legal framework) Rule 59 of the Rules of 2013 defines 'material deviation, reservation or omission' and prescribes that a material deviation is one which, if accepted, affects the scope, quality or performance of procurement or limits rights/obligations or, if rectified, would unfairly affect other bidders. Rules 60-61 deal with determination of responsiveness and curable defects. Precedent Treatment The Court refers to prior decisions (including Arav Infratech and Jagdish Mandal principles) holding that mandatory documentary compliance in tender conditions may be treated as essential and that courts will not ordinarily interfere absent mala fides or perversity. Interpretation and reasoning The tender condition explicitly required submission of a GST Registration Certificate and the 'Latest GSTR-3B return' along with the bid by the last date. The Technical Evaluation Committee interpreted this requirement as mandatory. The record showed the relevant GSTR-3B was filed on a date after the bid cut-off. Applying Rule 59(3) the Court concluded that non-filing by the bid date: (a) was inconsistent with the bidding conditions; and (b) affected the validity of the bid, because the requirement related directly to assessment of statutory compliance and financial worthiness. Ratio vs. Obiter Ratio: Non-submission of the GSTR-3B by the prescribed bid deadline constituted a material omission under Rule 59 and rendered the bid non-responsive. Conclusions The non-submission of the latest GSTR-3B within the bid period is a material deviation and not a mere curable procedural lapse; it justified rejection of the bid as non-responsive. Issue 2 - Scope of judicial review of procuring entity's interpretation and absence of mala fides (Legal framework) Judicial review in tender matters is limited; courts check for arbitrariness, irrationality, mala fides or decisions that no reasonable authority could have reached (Jagdish Mandal principles). Precedent Treatment Arav Infratech and other cited authorities endorse deference to the procuring entity's interpretation of tender conditions where bona fide and public interest weigh against interference. Interpretation and reasoning The procuring entity, as author of the tender, was best placed to interpret the mandatory requirement of GSTR-3B. There was no cogent material before the Court demonstrating mala fides, arbitrariness or that acceptance of the bid would further overwhelming public interest. The Court noted competing bidders had complied and no public interest justification warranted upsetting the procurement process. Ratio vs. Obiter Ratio: In absence of mala fides, arbitrariness or overriding public interest, the Court will not interfere with a bona fide mandatory interpretation adopted by the procuring entity in tender evaluation. Conclusions The Court declined to substitute its view for that of the procuring entity; the interpretation treating GSTR-3B as mandatory was not perverse or arbitrary and did not attract judicial interference. Issue 3 - Effect of belated filing of GSTR-3B (Legal framework) Tender conditions fixing responsiveness by a cut-off date require documents to be available as on that date; post-cut-off compliance cannot retrospectively validate a bid where the condition was mandatory. Precedent Treatment Authorities cited confirm that acceptance of essential mandatory documents filed after the cut-off is impermissible unless exceptional public interest or demonstrable mala fides justify condonation. Interpretation and reasoning The record disclosed the GSTR-3B relevant to March 2024-25 was filed on 23.06.2025, after the 27.05.2025 bid deadline. No satisfactory explanation was given for the delay. Competing bidders had met the requirement. Allowing belated filing would upset equal treatment and competitive parity contemplated by Rule 59(3)(b). Ratio vs. Obiter Ratio: A GSTR-3B filed after the bid submission deadline cannot be treated as compliance to cure responsiveness where the tender condition was mandatory and other bidders complied within time. Conclusions Belated filing did not cure the material omission; the petitioner's bid remained non-responsive. Issue 4 - Deficiencies in other technical/eligibility documents (Legal framework) The tender's Evaluation and Qualification Criteria required demonstrable experience (seven years), financial resources, net worth and supporting certified documents with specific particulars (e.g., identification, GST/PAN/TIN references, bank credit limit certificates within specified validity). Precedent Treatment Procurement regimes demand authentic and particularized documentary proof of eligibility; generic or undifferentiated certificates ('to whomsoever it may concern') lacking identifiers are unreliable for meeting eligibility thresholds. Interpretation and reasoning The experience certificate produced lacked specific identification of the firm or joint venture, did not reference GST/PAN/TIN, and was addressed generically. The petitioner's GST registration dated 21.05.2021 indicated the bidder could not have met the seven-year experience window (01.05.2018 to 30.04.2025). These deficiencies prima facie undermined the claim of meeting prescribed eligibility. Ratio vs. Obiter Ratio: Documents that do not bear requisite particulars or do not establish existence/experience as of the cut-off cannot be treated as satisfying mandatory eligibility criteria. Conclusions The petitioner's supporting technical documents were deficient to establish compliance with the seven-year experience requirement and related financial prerequisites; such deficiencies justified exclusion from qualification. Relief and Costs (Court's conclusion) Applying the above principles, the Court dismissed the petitions for lack of merit, upheld the procuring entity's determination of non-responsiveness, and rejected the contention that the defect was merely procedural and curable. The Court imposed costs on each petitioner in view of public interest considerations and potential delay to public works.