In a significant ruling, the division bench of the Supreme Court of India consisting of Justice KM Joseph and Justice Hrishikesh Roy ruled that State has no Obligation to indicate HSN Code and GST Rates in Public Tender.
The Union of India is the appellant and Bharat Forge and Another is the respondent in the present appeal.
A global tender was published on 11.04.2019 by the third appellant (Diesel Locomotive Work through its Manager, Varanasi). E-tenders were invited for procurement of turbo wheel impeller balance assembly. The writ petitioner was one of the tenderers. So were among others Respondents 6 to 8 in the Writ Petition.
Further, the case of the writ petitioner is that neither the NIT(Notice inviting Tender)nor the bid documents, mention the relevant HSN ( Harmonised System of Nomenclature) Code applicable to the product.
The respondent filed a writ petition seeking the Tendering Authority to clarify the Procurement Product must be taxed at 18% under the Relevant HSN Code, to ensure Uniform Bidding from the parties, so as to ensure a level playing field for all Bidders or suppliers.
The High Court disposed of the writ petition stating that “We, therefore, find it expedient to Issue a direction to respondent no.2 namely, the General Manager, Diesel Locomotive Works, Varanasi that if the GST value is to be added in the base price to arrive at the total price of offer for the procurement of products in a tender and is used to determine Interse ranking in the selection process, he would be required to clarify the Issue.
If any, with the GST authorities relating to the applicability of correct HSN Code of the 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’.”
The Court observed that “There is no duty cast on the appellants to seek such direction. Therefore, the appellants are right in contending that there is no statutory duty, which could have been enforced in the manner done in the impugned Judgment. There is no public duty that is enforceable. “
N. Venkataraman, Additional Solicitor General appeared for the appellants and Amar Dave appeared for the respondents.
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