TaxTMI 
TaxTMI 
2020 (12) TMI 944
X X X X Extracts X X X X
X X X X Extracts X X X X
.... respondents had brought out a Notice Inviting Tender (NIT) for supply of stores/equipments/SITC (supply, installation, testing & commissioning)/ SETC (supply, erection, testing & commissioning). The petitioner states that Clause 6.10.3 of Annexure-1 which is the "Instructions to the Bidders" to the NIT stipulates that the bidder had to indicate in the bid, the amount of the product with exact rate of customs duty and the applicable rate of customs tariffs under which it is covered. It is also stated that the amount of excise and sales tax on the ultimate fixed products had to be shown separately in the bid. The petitioner further states that Annexure-4 to the tender documents provides that all taxes applicable must be quoted and shown separately and bidders should quote the prices of stores and taxes(VAT/CST/Excise duty/CBT/service tax) as applicable separately in the bid. 3. There was an amendment to the aforesaid tender on 04.01.2019, whereby Clause 6.10.15 was added to the "Instructions to the Bidders" which stipulated that the bidder has to state in their offer, the GST/IGST/SGST/CGST/customs duties/surcharge etc. whichever is applicable in India over and above the prices b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the offer, the GST/IGST/SGST/customs duty/surcharge etc. as extra whichever is applicable in India, over and above the prices being quoted by it failing which, the tender will be out rightly rejected. She therefore states that the bid submitted by the respondent No.4 which does not mention the GST, ought to have been rejected by the respondents No.1 to 3. Ms. Arora further states that if the GST component is removed from the bid of the respondent No.4, the petitioner's bid would turn out to be lower. 8. Per contra, Mr. Rajiv Sharma, learned counsel for the respondents No.1 to 3/Prasar Bharti contends that the plea of the petitioner that respondent No.4 has not indicated any amount against items No.4 and 5 towards GST/IGST and therefore its bid should have been rejected, is untenable. According to him, respondent No.4 had agreed not to pass on the sales tax component to the respondent No.1 to 3/Prasar Bharti and therefore it had not indicated any amount towards GST/IGST. He submits that nothing prevented the petitioner from doing so and it is a bidder's option not to pass on the tax element to Prasar Bharti. 9. Mr. Sharma has filed a comparative tabulate statement for i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioner) 1 2 3 4 5 6 7 8 9 Item No. Description of Work Total Quantity Unit Rate INR Total Price Excluding GST Total Price Including 18% GST Unit Rate INR Total Price Excluding GST Total Price Including 18% GST 4 Supply of 250 Watt Dummy Load mounted in pre-wired rack as per AIR Specification 100 9000 900000 10602000 10300 1030000 1215400 5 Supply of Pre-wired Rack including Stereo Distribution Amplifier etc. 100 360000 36000000 42480000 302500 30250000 35695000 TOTAL 36900000 43542000 31280000 36910400 11. We have heard Ms. Meenakshi Arora, learned Senior Advocate appearing for the petitioner and Mr. Rajeev Sharma, learned counsel for the respondents and carefully perused the record. 12. The relevant Clauses of the NIT which are necessary to adjudicate the controversy in issue, read as under:- 6.10.3 The bidder(s) will indicate in their bid the amount with exact rate of custom duty and the applicable item of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot find any anomaly in the decision making process adopted by the respondent No.1 to 3/Prasar Bharti. 15. In Michigan Rubber (India) Ltd. v. State of Karnataka, reported as (2012) 8 SCC 216, after examining the case law laid down on the scope of interference by courts in tender matters, the following principles have been carved out:- "23. From the above decisions, the following principles emerge: (a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t was for the petitioner to have decided as to whether it wanted to absorb the tax component in its price bid or not, at the appropriate stage. 18. We are also not impressed by the argument advanced by Ms. Arora, Senior Advocate that the decision of the respondent No.4 to absorb the tax component amounts to giving a discount and that no discount can be taken into account for evaluation purposes, as mentioned in Instruction No.7. Discount is on the cost price of the product. In this case, respondent No.4 has not reduced its cost price. It has only decided not to pass on the tax element to the respondent No.1 to 3/Prasar Bharti. Therefore, it cannot be said that respondent No.4 has given any discount to the respondents No.1 to 3. The respondent No.4 decided to absorb the tax component and it was equally open for the petitioner to have adopted the same procedure. 19. In our opinion, reliance placed by Ms. Arora, Senior Advocate on the judgment of the Supreme Court in Bakshi Security & Personnel Services (P) Ltd. v. Devkishan Computed (P) Ltd., reported as (2016) 8 SCC 466, to contend that essential conditions in the NIT cannot be relaxed and the bid must be rejected for non-comp....