M/S Alpha Test House Services vs. Union Of INDIA And Others

Facts

The petitioner, M/s Alpha Test House Services, filed a writ petition challenging the order dated 06.05.2026 by the Bureau of Indian Standards (BIS), respondent No.4, which continued the suspension of its recognition. This was the second round of litigation; in the first instance, this Court had directed the petitioner to appear before BIS with proof of refund of overcharged amounts and for BIS to reconsider the matter in light of Clause 7.2 of BIS/LRS/2020. BIS, in its impugned order, noted that while the laboratory had been suspended for two weeks, the corrective action was not satisfactorily demonstrated. The petitioner argued that it had refunded the overcharged amount, and any differences were due to freight and GST calculations based on proforma invoices or exchange rate variations. The respondent argued that the petitioner had engaged in cheating, citing a discrepancy where an invoice preceded a quotation for one client, M/s Thai Asia Metal and Techno Industry Co. Ltd., and alleged similar illegality in other cases.

Held

The Court held that the petitioner had undoubtedly overcharged M/s Thai Asia Metal and Techno Industry Co. Ltd. and accepted its mistake, having already refunded the excess amount. Regarding other clients, the Court found a prima facie confusion concerning GST and freight charges, which depended on the terms of the contract (e.g., whether it was inclusive of taxes, FOB, or CIF). The Court acknowledged that the petitioner's laboratory had been closed since 24.04.2026 and considered a one-month suspension sufficient punishment for overcharging one client, while also recognizing the impact of overcharging foreign clients on the country's credibility. Consequently, the Court set aside the impugned orders dated 06.05.2026 and 23.04.2026. The respondents were granted liberty to proceed with a notice dated 13.05.2026, allowing them to take action if overcharging was found for clients other than M/s Thai Asia Metal and Techno Industry Co. Ltd. The Court directed authorities to examine quotations/proforma invoices/contracts and potentially seek opinions from foreign clients before passing final orders. The petitioner was directed to file a reply to the notice dated 13.05.2026 within one week.

Key Issues

1. Whether the continued suspension of the petitioner's laboratory recognition by respondent No.4, BIS, vide order dated 06.05.2026, is justified, considering the petitioner's compliance with the Court's previous order dated 04.05.2026 and the provisions of Clause 7.2 of BIS LRS 2020? Petitioner's contentions: The petitioner argued that it had refunded the overcharged amount and that discrepancies in other cases were due to differences in freight and GST charges, or exchange rate variations, as per proforma invoices/quotations. They contended that a mistake with one client, M/s Thai Asia Metal and Techno Industry Co. Ltd., had been corrected and the refund made. Respondent's contentions: The respondents (Union of India and others, specifically BIS) argued that the petitioner had engaged in cheating, particularly with M/s Thai Asia Metal and Techno Industry Co. Ltd., by issuing an invoice before a quotation. They asserted that the evidence submitted by the petitioner was insufficient to establish satisfactory corrective action under Clause 7.2 of BIS LRS 2020, and that similar illegality was suspected in other cases.