M/S Shanti Enggicon Private Limited vs. Ntpc Limited

Held

The Court found considerable force in the Petitioner's submissions. It was held that the Respondents were obligated to provide separate columns for different GST rates in the tender documents, given the notification dated 22.08.2017 which stipulated different rates for Section B (12%) and Section C (18%) roads. The Court emphasized that Clause 12.4 of the ITB, read with Section 9 of the GST Act, clearly established the awarder's liability to pay GST, making the bidder's mention or non-mention of the rate inconsequential as it was a 'constant figure'. The Court reasoned that if there was any defect in the bid regarding taxes payable, the Respondents had the power to re-evaluate the bid under Clause 23.3 read with Clause 23.2.3 of the ITB, rather than hastily pursuing proceedings. The impugned order (Annexure P/8) was set aside. The Court directed the Respondents to re-evaluate all bids, treating the Petitioner's quote as excluding GST, and to finalize the bid proceedings. Alternatively, the Respondents could opt for a re-tender with proper clarifications and necessary columns for different rates.

Facts

The Petitioner, M/s. Shanti Enggicon Private Limited, challenged an action by NTPC Limited (Respondents) to withdraw their bid, forfeit Earnest Money Deposit (EMD), and blacklist them for not separately mentioning the GST rate in their tender. The tender, issued on 09.09.2019, was for construction of roads for coal evacuation (Section B) and for township approach (Section C). A subsequent notification dated 22.08.2017 stipulated different GST rates: 12% for Section B (public purpose) and 18% for Section C (private purpose). The tender required bidders to quote a basis price excluding GST and mention the applicable GST rate separately. The Petitioner left the GST column blank, quoting Rs. 18,24,58,353.06. NTPC treated this quote as inclusive of GST, reduced it, and deemed it an 'Abnormally Low Rate', demanding additional performance security.

Key Issues

1. Whether the Respondents' action of treating the Petitioner's bid as inclusive of GST and subsequently deeming it an 'Abnormally Low Rate' was arbitrary and illegal, considering the tender conditions and the prevailing GST rates for different road constructions? (Question of law and mixed fact and law, turning on Clause 12.4 of ITB, Section 9 of GST Act, and Annexure P/4). Petitioner's Arguments: The Petitioner argued that the Respondents failed to provide separate columns for different GST rates applicable to Section B and Section C roads, despite the notification dated 22.08.2017 being in force. They contended that the tender stipulated that the bid amount should exclude GST and that the employer's liability was to pay the GST. Therefore, leaving the GST column blank should not have led to their bid being treated as inclusive of GST or declared as an abnormally low rate. They relied on C.A. George v. State of Kerala. Respondents' Arguments: The Respondents' specific arguments are not explicitly detailed in the provided text, but their actions indicate they believed the Petitioner's failure to quote a GST rate rendered the bid defective and potentially inclusive of GST.