Advocates Appeared:
For the Appellant(s) : Mr. N. Venkataraman, ASG Mr. Amrish Kumar, AOR
For the Respondent(s): Mr. Mahesh Agarwal, Adv. Mr. Ankur Saigal, Adv. Mr. Divyanshu Srivastava, Adv. Mr. Kaustubh Singh, Adv. Mr. E. C. Agrawala, AOR Ms. Reshmi Rea Sinha, AOR

The Supreme Court of India, in the case of Union of India & Others v. Bharat Forge Ltd. & Another, Civil Appeal No. 5294 of 2022, has clarified the scope of a writ of Mandamus and the court's jurisdiction in judicial review concerning government tenders and GST.

Key Points from the Judgment:

• Writ of Mandamus: While a public authority vested with discretionary power can be directed to exercise that discretion, it is generally not permissible to direct a statutory functionary to exercise discretion in a specific manner. The court emphasized that a writ of Mandamus has a wide scope in India and should be issued wherever there is a public duty and a failure to perform it, without being bound by technicalities, to ensure justice. (!) (!)

• GST on Government Tender: The liability to pay tax under the GST regime rests with the supplier. Suppliers are responsible for making inquiries and determining the correct HSN Code and applicable tax rate for their goods or services. The purchaser, including the government, is not obligated to ascertain and announce these details to bind tenderers or fetter the jurisdictional officer's power. (!) (!) (!) (!)

Additional Insights:

• Judicial Review in Contractual Matters: Courts can review the decision-making process of the State in contractual matters to ensure it is fair, reasonable, and not arbitrary, illegal, or malafide. However, courts are generally hesitant to interfere with the terms of a tender or contract unless they are clearly flawed. (!) (!)
• Level Playing Field: While the concept of a "level playing field" is important, especially in the context of the "Make in India" policy, it does not impose a mandatory duty on the purchaser to specify the HSN Code in tender documents. The responsibility to quote the correct HSN Code and GST rate lies with the bidders. (!) (!)
• Supplier's Responsibility: The judgment highlights that bidders are expected to be aware of applicable taxes and duties. If tax information is not explicitly provided in an offer, it will be considered inclusive, and any tax liability will be borne by the firm. (!)
• Court's Role: The court cannot act as an appellate authority on the wisdom of government policies or tender conditions. Interference is warranted only if the action is capricious, arbitrary, or lacks a discernible reason. (!)
• Direction for Compliance: The Supreme Court directed that in all cases where a contract is awarded, a copy of the award document, containing all material details, should be forwarded to the concerned jurisdictional officer. Tenderers are also required to indicate the details of their Assessing Officers in their bids to facilitate this compliance. (!)

In essence, the Supreme Court allowed the appeal, setting aside the High Court's judgment, and emphasized that the responsibility for correctly classifying goods and services and quoting the applicable GST rate lies with the suppliers/bidders, not the tendering authority.