Tender eligibility clauses cannot impose local office barriers without rational nexus to procurement objectives and equal opportunity.

A tender clause requiring bidders to have an office in the State and in the consignee or specified districts, reflected through GST registration, was held unreasonable because it created an artificial local barrier with no rational nexus to procurement objectives. The Court noted that GST registration is valid throughout India and cannot be used to force district-specific registrations or local establishment requirements. It held that public procurement can lawfully focus on financial capacity, technical competence and past performance instead of place of business. The condition was found inconsistent with equal opportunity in public tenders and violative of the constitutional right to carry on trade and business, and was struck down.

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Issues: Whether the tender condition requiring availability of an office in the State and in the consignee district or specified districts during the last three years, as reflected in GST registration, was arbitrary and violative of the right to carry on trade and business.

Analysis: The condition was examined against the object of public procurement and the requirement that tender eligibility criteria bear a rational nexus with the purpose sought to be achieved. The Court held that GST registration is valid across India and cannot be used to insist on multiple district-specific registrations or to confine participation to bidders having a local establishment in the tender district. The Court further held that procurement objectives can be met by assessing financial capacity, technical competence, and past performance, without creating an artificial barrier based on place of business. The restrictive condition was therefore found to be unreasonable and inconsistent with the principle of equal opportunity in public tenders.

Conclusion: The tender condition was held to be violative of Article 19(1)(g) of the Constitution of India and was quashed in favour of the petitioner.

Final Conclusion: The tender authority was directed to delete the impugned eligibility condition and proceed with the tender after extending the relevant dates.

Ratio Decidendi: A tender eligibility clause that creates an artificial local-barrier and lacks a rational nexus with the object of procurement is liable to be struck down as arbitrary and infringing the right to carry on trade and business.

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