TaxTMI 
TaxTMI 
2023 (6) TMI 491
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....n challenging the decision taken vide the said letter. 2. Shorn of details, the brief facts leading to the filing of instant writ petition are as under: i. The Respondent floated the Impugned Tender on 02.07.2022 for engagement of Mine Developer-cum-Operator (MDO) for Development & Operation of Mines at Taldih (7.0 Mtpa ROM feed) along with installation of 10 Mtpa Loading facility at Barsua Valley. ii. It is stated that the Petitioner submitted its techno-commercial bid in lieu of the Impugned Tender on 12.09.2022. iii. On 19.02.2023, the Respondent informed the Petitioner that it was in the process of evaluating offers for the Tender and provided its observations on the offer made by the Petitioner. The Petitioner replied to the said e-mail confirming and accepting the observations made by the Respondent and withdrew the deviations from the bid document submitted by it along with the Tender documents. iv. Thereafter, on 22.02.2023, the Respondent sought a declaration from the Petitioner to the effect that the quantity shown in the certificate of production is the billed quantity dispatched to the loading siding and not the ROM. It is stated t....
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.... on date. Our view as above is on the basis of generally accepted accounting principles." viii. On 19.04.2023, the Petitioner wrote a letter to its statutory auditor informing the Petitioner that it has asked for an opinion from the ICAI and also enclosed a certificate from an independent CA firm i.e. M/s P.A. & Associates and an opinion from an independent Registered Value, CA Dr. Prithvi Ranjan Parhi to support the authenticity of treatment of Deferred Tax Liability in computing Net Worth. ix. Thereafter, the Petitioner, on 22.04.2023 wrote to the Respondent stating that it had requested to the Statutory Auditor to have an opinion from the Institute of Chartered Accountants of India (ICAI) regarding treatment of deferred tax liability for computation of Net Worth and requested the Respondent not to take any adverse steps until the opinion of ICAI is obtained. x. It is stated that the Respondent refused to take into consideration the clarification provided by the Petitioner's Statutory Auditor, the Independent CA Firm as well as the Independent Registered Valuer and chose to reject the Petitioner's offer stating the same was not suitable for fur....
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....reme Court in Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489. 9. Heard learned Counsels for the parties and perused the material on record. 10. The short question which arises for the consideration of this Court is whether the action of the Respondent in rejecting the bid of the Petitioner on the ground that Net Worth of the Petitioner is not in compliance with the eligibility criteria (financial) is correct or not and whether it warrants interference by this Court while exercising its jurisdiction under Article 226 of the Constitution of India. 11. At this juncture, it is apposite to reproduce Clause 3.28 of the Bid which defines "Net Worth" and Clause 6.1.2 of the Bid Document, which provides the qualifying criteria (financial) of the NIT reads as under:- "3.28 "Net Worth": Net Worth is the sum total of paid up capital and free reserves. Free reserves means all reserves credited out of the profits and share premium account but do not include reserves credited out of revaluation of assets, write back of depreciation provisions and amalgamation. Further, any debit balance of profit and loss account and miscellaneous expenses to the extent no....
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....onsideration 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 and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited; (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted; (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fun....
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.... for the purposes of preventing arbitrariness, irrationality, bias, mala fides or perversity. The said principle has been reiterated by the Apex Court in Galaxy Transport Agencies, Contractors, Trader, Transporters and Suppliers v. New J K Roadways, Fleet Owners and Transport Contractors & Ors., 2020 SCC OnLine SC 1035. The Supreme Court in Silippi Constructions (supra) has observed as follows: "20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are....
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....ect. Section 115 JB of the Income Tax Act is a special provision which describes what 'book profit' of a company means for the purposes of determining the total income of a company for the purposes of payment of tax. Whereas Rule 11 UA of the Income Tax Rules, 1962 deals with the determination of fair market value for the purposes of determining income from other sources under Section 56 of the Income Tax Act. Both the provisions deal particularly with determining the income of a company for the purposes of payment of tax. The calculation of the net worth of a company and the calculation of income of a company for the purposes of payment of tax are two separate exercises and cannot be equated. It is, therefore, difficult for this Court to agree with the submission made by Mr.Rao that deferred tax liability should be included for the purposes of calculating the net worth of a company. 19. A perusal of Respondent's letter dated 11.03.2023 shows that the net worth of the Petitioner as calculated by the Respondent by referring to audited financial statements of the Petitioner for the FY 2021-22 shows that the net worth of the company is Rs. 393.73 crores. The Respondent ....