2022 Supreme(SC) 711

SUPREME COURT OF INDIA
K.M. JOSEPH, HRISHIKESH ROY, JJ.
Union of India & Others - Appellants
Versus
Bharat Forge Ltd. & Another - Respondents
Civil Appeal No.5294 of 2022 (Arising out of SLP(C) No.4960 of 2021)
Decided On : 16-08-2022

IMPORTANT POINTS
(1) Writ of Mandamus – While in a given case, when a Public Authority is vested with a discretionary power under a Statute, it can be directed to exercise a discretion, it may not be legal to direct even a statutory functionary to exercise discretion in a particular manner.
(2) GST on Government Tender – Liability to pay tax under GST regime is on supplier.

Headnote:

(A) Constitution of India – Article 226 – Writ of Mandamus – Issuance of – Writ of Mandamus or a direction, in nature of a Writ of Mandamus, is not to be withheld, in exercise of powers of Article 226 on any technicalities – This is subject only to indispensable requirements being fulfilled – There must be a public duty – While duty may, indeed, arise form a Statute ordinarily, duty can be imposed by common charter, common law, custom or even contract – Fact that a duty may have to be unravelled and mist around it cleared before its shape is unfolded may not relieve Court of its duty to cull out a public duty in a Statute or otherwise, if in substance, it exists – Equally, Mandamus would lie if Authority which had a discretion, fails to exercise it and prefers to act under dictation of another Authority – Writ of Mandamus or a direction in nature thereof had been given a very wide scope in conditions prevailing in this country and it is to be issued wherever there is a public duty and there is a failure to perform and courts will not be bound by technicalities and its chief concern should be to reach justice to wronged. (Para 18)

(B) Constitution of India – Article 226 – Writ of Mandamus – Issuance of – While in a given case, when a Public Authority is vested with a discretionary power under a Statute, it can be directed to exercise a discretion, it may not be legal to direct even a statutory functionary to exercise discretion in a particular manner – Very idea of a discretionary power would suffer annihilation, if it ceases to be discretionary in hands of a Court ordering a Mandamus – There may be cases where facts are such that court is not powerless to direct Authority to do a thing which it considers absolutely necessary and just and legal to perform the act even when Authority seeks shelter on the basis that what is conferred on it, is a mere discretion. (Para 46)

(C) Government Contract – Ambit of Court’s jurisdiction in judicial review in contractual matters – Equals must be treated equally – All actions of State must be fair, which constitutes major plank of attack against State action in arena of contracts – This again is subject to self-restraint in matters, scope of which has been dealt with in regard to various aspects of the matter, starting with cases relating to challenge to very terms of tender and culminating in actual award of contract – Unless such actions are found to be clearly arbitrary, illegal, malafide or contrary to any Statute, courts would be loathe to fetter even limited area of freedom of State has to take decisions which are fair in cases relating to contractual matters. (Para 23)

(D) Central Goods and Services Act, 2017 – Sections 59 and 60 – GST on Government Tender – By global tender appellants called for e-tenders from intending suppliers of goods – Appellants stand in shoes of a purchaser of goods and services – Liability to pay tax under GST regime is on supplier – He must make inquires and make an informed decision as to what would be relevant HSN Code applicable to items and rate of tax applicable – Thereafter, when he makes bid, issue of competition for winning bid, would come into clear focus – Goal of bidder ordinarily is to emerge successful and bag the contract – Extent of profit that he would earn, is a matter, which is essentially a matter to be decided by him – This is a matter to be left to commercial expediency of bidder – When purchaser happens to be State, it would be not fair or reasonable to not expect it to accept bid of lowest bidder unless for reasons which are fair and legal – Appellants cannot be expected to find out HSN Code and announce it so as to bind tenderers or fetter power of jurisdictional officer of supplier. (Paras 37, 38, 40 and 55)

Facts of the case:

By impugned Judgment, High Court has disposed of the Writ Petition filed by the first respondent (Writ Petitioner) with a direction to General Manager, Diesel Locomotive Works, Varanasi that if GST value is to be added in the base price to arrive at the total price of offer for procurement of products in a tender and is used to determine Inter se ranking in the selection process, he would be required to clarify the issue, if any, with the GST authorities relating to applicability of correct HSN Code of procurement product and mention the same in the NIT (Notice inviting tender) tender/ bid document, so as 'to ensure uniform bidding from all participants and to provide all tenderers/bidders a 'Level Playing Field'.

Findings of Court:

In all cases, where a contract is awarded by the appellants, a copy of document, by which, contract is awarded containing all material details shall be immediately forwarded to concerned jurisdictional Officer. It is accordingly ordered. Towards this end, the appellants shall indicate that the tenderers will, in their bids, indicate the details of their Assessing Officers so that the appellants can effectively comply with this direction. The Union of India and the Railway Board shall ensure that this direction shall be complied with by all units.

Result : Appeal allowed.