M/S Haque Construction Company vs. Union Of INDIA
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The petitioner, M/s Haque Construction Company, applied for a government contract requiring GST registration. They engaged an agent who provided an invalid GST number (36ABPPH848ODLZ3). Upon discovery, the petitioner informed the Additional Director General (ADG), Hyderabad, and was allowed to submit a corrected GST number in a previous writ petition (WP No. 32828 of 2024). Despite this, the respondent issued an order on February 14, 2025, debarring the petitioner for one year. The petitioner argued this was contradictory as their GST number was rectified. The respondent contended that submitting a non-existent GST certificate violated CPWD Enlistment Rules, specifically Rule 13.6 (d) and (e), making the petitioner liable for disciplinary action under Rule 13.7. The petitioner has ongoing contracts in various states and claims no prior adverse record.
Held
The Court held that the impugned debarment order dated February 14, 2025, is set aside. The Court reasoned that on a previous occasion, the respondent issued a show cause notice for furnishing invalid/false GST information, and the petitioner approached the Court in WP No. 32828 of 2024. This Court directed the respondent to consider the corrected GST certificate furnished by the petitioner for enlistment as a PWD contractor, as per law. The Court noted that the petitioner admittedly submitted the corrected documents regarding their GST Certificate. Therefore, the respondent ought to have considered the petitioner's eligibility for enlistment based on the valid/corrected documents submitted. Once the petitioner furnished the corrected/valid particulars, the Court found no basis for the respondent to continue pursuing clauses related to the earlier incorrect filing, which was the subject of the prior writ petition. The Court directed the respondent authority to consider the candidature of the petitioner for enlistment as a PWD contractor, based on the documents furnished by them, without reference to the aspect of the previously furnished incorrect certificate.
Key Issues
1. Whether the debarment order issued by the respondent, despite the petitioner rectifying their GST number and the court's previous direction to consider corrected documents, is arbitrary and violative of natural justice, particularly in light of the petitioner's reliance on an external consultant for the initial GST registration? Petitioner's arguments: The petitioner contends that the debarment order is illogical and contradictory because their GST number was rectified, and the previous writ petition directed the respondent to consider the corrected documents. They argue that the error was an 'inconsequential error' as per the Supreme Court's ruling in Tata Cellular vs. Union of India, and that the debarment is excessively severe, impacting their livelihood without justification. They also highlight that the issue arose due to an agent misleading them. Respondent's arguments: The respondent argues that the petitioner submitted a non-existent GST certificate at the time of application, violating paragraph 6.6 of the CPWD Enlistment Rules. They assert that the petitioner is fully accountable for the authenticity of submitted documents and that the claim of an external consultant's error is denied as CPWD does not recognize third-party agents for enlistment. The submission of false information and a non-existent document meets the criteria under Rule 13.6 (d) and (e), warranting disciplinary action under Rule 13.7.
Sections Cited
Rule 13.6, Rule 13.7, Section 51, Article 226
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Cause title — parties, addresses and appearances
The Court made the following: ORDER
.ltf-tf' HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No. 5315 oF 2025 OR DER: Petitioner Company operates in constmction sector and had aPPlied for a government contract that required GST Number. To comPlY with this' submission of a valld Petitioner engaged an agent and paid the fees; however' GST Number provided by the agent was subsequently found to be invalid. During the application for enlistment' Petitioner inadvertently submitted a GST Registration Certificate bearing No. 36ABPPH 848ODLZ3 It was later discovered that this GST mrmber was invaiid due to an error committed by an external consultantwhohadbeenengagedtoassistintheGST registration process' In response to this' GST authorities issued show cause notice dated 12-11-2024' warning that Petitioner Company would be penatized unless a proper explanation was submitted.
In response to show cause notice' Petitioner filed Writ Petition No. 32828 of 2024 which was disposed of on 22-ll-2o24, permitting Petitioner to submit reply within seven days. Petitioner promptly submitted explanation' which was apparently accepted by the Respondent' Despite permitting :
2 rectification of GST Number, the authorit5r issued order dated 14-02-2025, impugned in this Writ petition, debzrrring petitioner Company for one year. petitioner contends that this is an illogical and contradictory order because while rectirrcation of GST number was allowed, the same o.d.. i-po".d a severe penalty of debarment for one year. Due to this perceived injustice, Petitioner is compeiled to approach this Court again.
It is stated, petitioner Company curren y holds ongoing works and contracts in various States, including Uttar Pradesh, Madhya pradesh (Bhopar), and other rocations. The impugned order thus delivers a major setback and is perceived to be vindictive in nature. petitioner further asserts that it has no adverse record or biack marks in Telangana or aly other State in India. The GST Authority,s impugned order is viewed as severely affecting their right to livelihood without justification.
3 Petitioner immediately informed the Additional Director General (ADG), Hyderabad, 26-70-2024, :upon on becoming aware that GST number submitted with enlistment application was invalid. petitioner in its representation stated that it was shocked that GST Registration Certihcate bearing No. 36ABPPH 848-DtZ3, submitted along with the tender Application, was declared invalid. It is emphasized that the ;
3 entire issue arose because the agent who assisted in obtaining theGSTnumbermisledthem,resultinginthisunfortunate situationforwhichtheyarenowbeingpenalized.Further, Petitioner highlights that it has all-India operations and that imposing such a harsh punishment would be excessively severe' Respondent, after having accepted the correct GST number subsequently provided by Petitioner' illogically rmposed the penalty regardless. It is also pointed out that Petitioner has no record of any black marks in any tenders being conducted either in Telangana, Madhya Pradesh' Uttar Pradesh' or Delhi 1 .
Petitioner states that GST number was rectified later and that this minor error did not cause any major or material harm. The error should be consldered an 'inconsequential error' or'non-essential error' as established by the Hon'ble SuPreme Court ir Tata Cellular us. llnion of Indial. Hence, the Writ Petition'
Respondent fded counter stating that stating that petitioner applied for enlistment under CPWD Class I Buildings & Roads category on line ol 29 'O4'2O24 uia CEMS portal' submitting various documents including GST registration certificate bearing GST No' 36ABPPH848 OD|Z3 ' Based on this tAIR 1996 sc- I 1
4 1 application and supporting documents, petitioner frrm was enlisted in Class 1 - Buildings & Roads category as per Office Memorandum dated 19.O2.2024. This enlistment was processed under the Rules for Enlistment of contractors in CPWD and is subject to the provisions and regulations According to item No. 2 of the stipulated by those mles. enlistment order dated 19.OT.2024, the enlisted contractor must abide by all the rules mentioned in the Enlistment Rules 2023, as amended or latest, which is the Rules for Enlistment of contractors in CpWD, 2024. Further, as per item No. 14(c) of the enlistment application, the firm provided a certif,rcation stating that if arry information or documents submitted are found incorrect or forged during or after the enlistment process, the Application or enlistment is liabie to be cancelled, and the firm shall be debarred for rwo years from the date of issuance of the order. 2.I. On 06.09.2024, the hrm submitted on line application through CEMS portal to request changes in its constitution, status and name, which was reviewed and prior approval granted by the Enlisting Authority by letter dated 27 .O9 .2024. In connection with a tender invited by the Executive Engineer, president,s Estate, a communication dated I I
..:'' 5 03.1O.2024 was received from the ADG, Delhi Ofhce indicating that GST registration of petitioner was invalid as of the last tendersubmissiondate.onoT.lo.2024,acommlrnicationwas received uia etrrall indicating that a check on the GST portal showed the firm's GST registration certihcate as invalid' According to paragraph 6'6 of the CPWD Enlistment Rules' contractors are required to have a valid GST registration certilrcateatthetimeoftheirenlistmentapplication;however, the GST registration submitted by petitioner was found invaLid as of the Application date Petitioner, through e mail dated 26.1O.2024, acknowledged that GST registration certificate provided with enlistment application was invalid as of the Application date and claimed that an individual' who helped with GST registration, allegedly provided a fraudulent certificate, which was then submitted with Application' Petitioner attached a corrected GST registration certihcate issued on 27.Og.2O24 and requested to update the enlistment order by changing the GST registration number'
Further communications dated 05 '17 '2024 ' 23.12.2024 and 13.01.2025 received uo e natl from different individua-ls, indicated that GST registration certificate submitted by petitioner was fake. The respondent emphasizes that every
6 applicant is fuliy accountable for the authenticity of all the documents submitted with their Application. GST registration certificate provided was a non_existing document on the date of application, constituting violation of paragraph 6.6 of the Enlistment Rules. It remains unclear how a non-exrsting GST certificate was obtained and submitted as part of the application. By submitting false inforrnation and a non_existent document, the firm engaged in falsification of records, meeting the criteria under conditions (d) and (e) of Rule 13.6 of the Enlistment Rules.
As a result, failure to comply with paragraph 6.6 indicates that the firm no longer met the eligibilit5r criteria at the time of application, which formed the basis for its enlistment, thus also meeting condition (m) of Rule 13. 6. Consequently, a show cause notice was issued to petitioner ulde letter dated 12.17.2024, requiring a reply within 15 days expiaining why disciplinary action should not be initiated under Rule 13.7 of the Enlistment Rules. petitioner filed Writ petition No. 32g2g of 20241 chdlenging the show_cause notice as arbitrary, illegal, and void, seeking a direction to update the GST registration number and to allow the firm to continue participating in future tenders. The matter was heard and this Court, by order dated I I i i I I
_----- ':**'*q$q.=7 1 22.|l.2024,directedthatpetitionerbegivenanopportunityto bring the corrected documents before the respondent within 7 days from 25.71.2024 and that no disciplinary proceedings be initiatedbeforethepetitionerisgivenafa.iropportunityto present its case. It was further clarihed that a-ny action must be taken in accordance with law as per the CPWD Rules
After being afforded this opportunity' petitioner submitted reply to the show cause notice on 29 1'l2O24 along r,vith supporting documents, including the corrected GST registration document bearing number 36ABPPH848ODIZD' However, the petitioner failed to ad'equately address certain critical points raised in paragraphs 4 and 11 of the show cause notice, which substantiated the falsification of GST certihcate submitted originalty. Therefore, the conditions of Rule 13 6 (d) and (e) are met, making petitioner liable for disciplinary action under Rule 13.7.
It is stated, as per ER-2023, tk-e work experience required for enlistment in Class-I (B&R) category was completion of building or road work of a minimum magnitude of Rs. 12 crores in one work category' However, or:. 23 'O7 '2024 ' the enlistment rules changed to ER-2O24, which require an applicant for Class-l (B&R) category to have experience of one
8 completed building work as defined in rules 2.2(il, (ltl, or (iii) with a minimum magnitude of Rs.24 crores in one work category as specified in Table_2 of ER_2O24. The department had honored the court Order by considering petitioner,s new GST number and issuing a revised enlistment order dated L0.O2.2O25 instead of cancelling the enlistment order entireiy. Nonetheless, as per CpWD Enlistment Rules, petitioner met the conditions under Rule 13.6 (d) and (e) warranting disciplinary action. Hence, the Disciplinary Authority issued the impugned order debarring petitioner company for a period of one year. It is clarified that during the period from enlistme nt (IZ .O7.2024) to the date of debarment otder (14.02.2025), petitioner was not prevented from participating in tenders of the enristed crass_I category.
It is stated, petitioner claims that an external agent was responsible for the invalid GST certifrcate; however, as per the process, the GST certificate confirmation is sent directly to the applicant,s registered mail and mobile number and no role of third-party agents is recognized by cpwD for enlistment. Petitioner remains fully accountable for the authenticity of all documents submitted Thus, the claim of error due to an external consultant or agent is denied. Respondent clarifies I
9 that the department complied with the High Court's direction by considering petitioner's corrected GST number and issuing a revised enllstment order dated IO 02 '2025 ' rather than cancelling the enlistment lt is further clarifred that the period of debarment starts from the date of issuance of debarment order and g,il] be deemed revoked automaticaliy upon expiry of the specihed period. Importantly, contracts conciuded prior to thedebarmentorderremainunaffectedbythi ecision,and debarmentdoesnotaffectanyothercontractualorlegalrights of the procuring entitles.
Heard Sri Mir Mohd' Naser Ali' learned counsel for petitioner as well as learned Deputy Solicitor General on behalf of resPondent. 4. it is to be noted that on earlier occasion' respondent authority issued a show cause notice to petitioner for furnishing invalid / false information with regard to GST' pursuant to which petitioner approached this Court in Writ Petition No' 32a2a of 2024, dated' 22 17 '2024, whereupon this Court directed the Authority to consider the corrected details/correct certihcate furnished by petitioner for enlistment as PWD contractor as Per law However, resPondent out to ParagraPhs 4 aulhonlY, uide and 11 of the impugned order, Points ',.a 10 Enrolment Application which pertaining to the action on information. are declaratory statements fumishing false/ incorrect
At this juncture, it is to be noted that this Court in Paragraph No.3 of the order dated 22.11.2024 in Writ petition No. 32828 of 2O24 directed as follows:
"
Considering the fact that the petitioner,s GST Registration Certificate was subsequently corrected, the petitioner shall be given an opportunity to bring the corrected documents 25.t1.2024 and take respondent approprtate shall not action initiate before the respondent within 7 days from The respondent shall consider these documents on these documents. The aly disciplinary proceedings against the petitioner before the petitioner is given sufhcient opportunity to present its case along with the corrected documents before the respondent...." It is to be noted that petitioner admittedly, regarding his GST submitted the corrected documents Certificate, therefore, respondent ought to have considered his eligibility for enlistment based on the va-lid/ corrected documents submitted by petitioner- once petitioner furnished the corrected/valid particulars, there can be no further haunting by pressing into service the clauses relating to earlier incorrect filing, that was the subject matter of earlier Writ petition in which a direction was passed by this Court. 6 li
11 7 . In that view of the matter, the impugned debarment order dated 14.O2.2O25 is set aside and respondent authority is directed to consider the candidature of petitioner for enlistment as PWD contractor, based on the documents furnished by them' without reference to the aspect of previous certificate furnished by them With this, the Writ Petition stands allowed No Consequently, Miscellaneous Appiications, if any shall stand closed 8. costs.
V.KAVITHA DEPUTY REGISTRAR o ! f To ///' 'EcrloN oFFlcER ui*1R:rl",i,:'l'",:13[:i,I,LY,tiRt)%]Jli",ii,:i.?sT,:?u*5fi f -"*'*o Hvderabad , Central puotrc WJi's 'o'eplrtinent' Nirman Bhawan' Sultan g*;l,rySt,-alfi-',ft 's?fsti".'30f..',1r9^19,1ecateropUCl 6riE # i" 6lirtv a;ii;itor General of lndia [oPUC] Two CD CoPies hr- 'ur I 2. 3. 4. PSK. PSK.
CC TODAY HIGH COURT DATED:2410912025 ORDER WP.No.5315 of 2025 ALLOWING THE WRIT PETITION WITHOUT COSTS (, \n 1a 1
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.