TaxTMI 
TaxTMI 
2011 (11) TMI 145
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny would be fought for. Instant writ petition tells one such story. 2. The story commenced when in March 2011 the first respondent published a notice inviting tender. Offers were invited for supply of 367.93 lakh dose of BCG vaccines. The petitioner submitted an offer quoting a price of 28.60 per dose of BCG vaccine and as per the offer clearly stated that VAT as applicable from time to time would be charged extra. The second respondent also submitted an offer quoting likewise i.e. the unit price per dose of BCG vaccine at 28.60 and clearly stated that VAT as applicable would be charged. 3. Petitioner's manufacturing unit is situated in the State of Maharashtra, where with effect from 1.4.2000, VAT chargeable on BCG vaccines was increased....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndent requiring the second respondent to supply 61.32 lakh dose of BCG vaccines. An event of some significance had occurred in between. Effective from 11.7.2011, the State of Tamil Nadu increased the VAT on BCG vaccines from 4% to 5% and thus as per the indent dated 29.7.2011, the price payable by the first respondent to the second respondent was 28.60 + 5% VAT for each dose of BCG vaccine i.e. the same price which was quoted by the petitioner. But, it needs to be told, being integral and relevant to the story, that the second respondent agreed to bear the extra 1% VAT and thus as per the supply effected by the second respondent the first respondent continued to be the beneficiary of a less gross price being paid. It paid 28.60 per dose of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... its product and thus the criteria adopted by the first respondent to determine the lowest bid with reference to the ex-factory price + VAT chargeable was arbitrary; for it was urged that this would amount to discrimination on the reason that a fact not within the control of a party could not be used against the party. (ii) That acceptance of the offer submitted by the second respondent was not a contract where a definite quantity stood contracted to be supplied. It was a case of a standing offer and acceptance of the tender did not convert the offer into a binding contract. In the legal sense, it was urged that each act of requisition by the offeree i.e. the respondent No.1 would be an individual act of acceptance which would create a sep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the State shall not deny to any person the equality before the law. In the locus classicus on the subject i.e. the decision reported as AIR 1979 SC 1628 Ramanna Dayaram Shetty Vs. IAAI the principles of reasonableness, rationality and nonarbitrariness as projected under Article 14 of the Constitution of India; being the characteristic of every State action, whether it be under the authority of law or in exercise of the executive power of the State were recognized. The public law character of actions of the State against an individual in matters pertaining to contract, on specific being a contract for tenancy, was highlighted in the decision reported as AIR 1989 SC 1642 Dwarka Dass Marfatia & Sons Vs. Board of Trustees of the Port of Bomb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ilable makes an offer and the gross price payable by the purchaser is less. Others raise the issue that the net price quoted by them is low. They plead that the fortuitous circumstance of they having their manufacturing units in States where tax is paid cannot handicap them. The first party responds by saying that it is enjoying a tax holiday because it has set up the unit in a backward area and thus the cost borne by it to manufacture the goods is higher. It further responds by informing that whereas electricity tariff in the State where it has set up the unit is say Rs. 6/- per unit and that the electricity tariff in the State where the rival party has set up its unit is 4/- per unit. Is it the obligation of the State to get involved in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case, said legal position need not be even debated for the reason when VAT was enhanced in the State of Tamil Nadu from 4% to 5%, the second respondent bore the extra burden, a fact which is not in dispute, and thus vis-à-vis the price quoted by the petitioner, the net outflow from the first respondent to the second respondent, continued to be less. 15. Before concluding we may note that during the pendency of the writ petition, the first respondent wrote to the petitioner on 17.11.2011 that if it was prepared to supply the vaccines @ 28.60 + 4% VAT per dose and bring its offer at par with that of the second respondent, the Government was prepared to place an indent upon the petitioner. The petitioner wrote back the same day i.e. on....