The court emphasized the obligation of the employer to satisfy the GST, the need for re-evaluating bids, and the illegality of reducing the bid amount for not mentioning the GST rate separately.

JUDGMENT

P.R. Ramachandra Menon, CJ. - The arbitrary action on the part of the Respondents threatening and forcing the Petitioner vide Annexure P/8 dated 09.01.2020 to withdraw the bid, despite rating the Petitioner as L-1, with an attempt to forfeit the Earnest Money Deposit ( for short ''the EMD'' ) and to blacklist the Petitioner from participating in future Tenders for not having separately mentioned the GST rate in the tender, however taking a differential treatment in the case of the remaining three bidders and to have it awarded to the party of their choice, is put to challenge in this writ petition.

2. Annexure P/2 Notice Inviting Tender (for short ''the NIT'') was issued by the 2 nd Respondent on 09.09.2019 for Talaipalli Coal Mining Project situated in the Raigarh District of the State of Chhattisgarh, which is under the control of the 3rd Respondent. The tender was floated for construction of the road for Coal Evacuation ( Section B ) and road for Township approach for Talaipalli Coal Mining Project ( Section C ). The purpose of construction of the above two roads was quite different insofar as Section B road was to be used for coal evacuation which will be located outside the Township area and can be used by the general public as well, whereas Section C road was to be constructed inside the township area, which was strictly to be a private road. As a matter of fact, when the Goods and Service Tax Act, 2017 was introduced from July, 2017, the rate of taxes payable, it being a work contract, was fixed as 18% (9% CGST + 9% SGST). Subsequently, as per Annexure P/4 dated 22.08.2017, pursuant to the meeting of the GST Council, the rate was modified, segregating the rate of tax with reference to the purpose of the road by virtue of which construction of Section B road; was to attract a tax liability of only 12% (6% CGST + 6% SGST), whereas Section C road which was for internal/township purpose, it was to carry a higher rate of 18% (9% CGST + 9% SGST).

3. As mentioned above, when Annexure P/2 NIT was issued on 09.09.2019, Annexure P/4 modified rate of GST had already been brought into force from 22.08.2017, but in the relevant column of the form contained in the web portal, there was only one column for mentioning the GST rate. The tender conditions specifically stipulated that the Probable Amount of Contract ( for short ''the PAC'' ) was Rs.24,32,45,371.37 and that the rate had to be quoted by the bidder by "percentage" - higher or lower, including all taxes/duties.

4. Clause 11.1.3.2 of the Instructions to Bidders ( for short the ITB ) provided that the bidder shall quote (i) the basis price (including all taxes and duties etc. but excluding GST) and (ii) applicable GST% as asked for in the Bill of Quantities. Clause 11.3 of the ITB provided that if the bid was defective in any manner, it was to be rejected which will not entail any forfeiture of any EMD as warranted in the case of withdrawal of a bid. As per clause 12.3 of the ITB, it was clearly stipulated that the rate to be quoted was excluding the GST, as the GST had to be quoted separately. Under Clause 12.4 of the ITB, it was clearly provided that payment of the GST was to be the employer''s liability (awarder''s liability).

5. Clause 26 of the General Conditions of Contract ( for short the GCC ) dealing with the taxes, duties, levies etc. specifically insists (under clause 26.2) that it shall be the employer''s duty to pay the GST.

This virtually is an exception to the stipulation under clause 26.1 which casts the liability upon the contractor to satisfy all the taxes, duties, levies etc.

6. Clause 14.5 of the ITB is to the following effect:

''14.5 The Bid Security shall be forfeited in any of the following circumstances without any notice or proof of damage to the Employer:

(a) If the Bidder withdraws or varies his bid during the period of Bid validity.

(b) If the successful Bidder does not accept the correction of its Bid Price pursuant to ITB sub-clauses 23.2.