High Court Upholds Tender Rejection Over Invalid GST Submission by Bidder:

High Court Upholds Tender Rejection Over Invalid GST Submission by Bidder

The petitioner, an “A” Class Government contractor, participated in multiple tenders floated by the Himachal Pradesh State Forest Development Corporation for forest-related works in District Hamirpur. He claimed to be the lowest bidder (L-1) in all three tenders but was not awarded the contracts, which were instead granted to other bidders quoting higher rates. Aggrieved, the petitioner sought information under the Right to Information Act and learned that his bid was rejected due to non-submission of his individual GST number.

He argued that he had submitted the GST number of his partnership firm, which had been accepted in previous tenders, and that there was no explicit requirement mandating the submission of an individual GST number. The Corporation maintained that the petitioner submitted bids in his individual capacity but failed to furnish a valid personal GST number. It was also pointed out that in one tender the GST number submitted was inactive, while in others, the GST belonged to a partnership firm and could not be treated as the individual bidder’s GST.

Central Issue: Whether rejection of the petitioner’s bid for failure to submit a valid personal GST number was arbitrary or justified under the tender conditions.

HC's Ruling: The High Court dismissed the petitions and upheld the Corporation’s decision, holding that submission of a valid GST number was a mandatory tender requirement. Since the petitioner bid in his individual capacity, he was required to furnish his personal GST number. The Court clarified that a partnership firm is a separate legal entity and its GST registration cannot be treated as that of an individual bidder.

It noted that in one tender the GST number was inactive and in the others it belonged to a partnership firm, making the bids non-compliant. The Court observed that other bidders had submitted valid GST numbers of their sole proprietorship concerns while bidding in their individual capacities; therefore, no arbitrariness or mala fide could be attributed to the tendering authority.

To Read Full Judgment, Download PDF Given Below