Selection of Highest Bidder in Auction without Considering 'No Dues Certificate' from GST Dept: Orissa HC quashes Order [Read Order]

The Orissa High Court quashed the order since the opposite party got selected in the bid merely because it had quoted the highest price without considering the 'no dues certificate' from the Goods and Service Tax department.

M/s P.K. Minerals Private Ltd, the appellant challenged the order dated passed by the Appellate Authority-cum-Sub-Collector, Keonjhar, as well as the order passed by the Competent Authority-cum-Tahasildar, Banspal in Sand Stone Quarry Case No. 4/2020-21, and to issue direction to the opposite parties to settle the Karangadihi Stone Quarry by law.

The Tahasildar floated an auction notice for a long-term lease of Karangadihi Stone Quarry for a period of five years. The last date of submission of the bid was fixed to 04.08.2022 and the date of opening of the bid was fixed to 05.08.2022. The auction notice also specified the list of documents to be enclosed by the bidders along with the bid application.

Duly complying with the conditions of the auction notice, the petitioner submitted its bid incorporating the documents as required. The tender drop box was opened, on 05.08.2022 at 11.30 A.M., by the selection committee, comprising Tahasildar, Banspal, Addl. Tahasildar, Banspal and Revenue Inspector.

The tender notice contained a mandate that the incomplete applications will not be taken into consideration and those will be rejected, and that the bid applications will be scrutinized in the presence of the bidders or their representatives, and only the bid applications complying with all the terms will be taken into consideration, and the bidder quoting the highest rate of additional charges will be selected.

The petitioner had enclosed all the required documents along with the bid application. As per Rule 27(4)(iv) of the Odisha Minor Minerals Concession (Amendment) Rules, 2022, which required the bidder to submit the income tax return of the previous financial year for an amount not less than the amount of additional charge offered and other dues or bank guarantee valid for a period of 18 months for the amount of additional charges etc.

The petitioner had no dues of Goods and Service Tax (GST) to comply with Clause-7 of the auction notice. But, the CGST authorities advised the petitioner to download the information from their website and the petitioner had downloaded the information from their website, which contained the information that the petitioner had no outstanding GST dues.

It was observed that even if the petitioner is called upon to match the highest price, its bid will suffer from deficiency like that of opposite party no.4. Therefore, the question of calling upon the petitioner to match the highest price offered by the opposite party no.4 may not arise.

A two-judge bench comprising Dr Justice B R Sarangi and Justice M S Raman held that “the decision-making process in selecting opposite party no.4, being arbitrary, unreasonable and contrary to the provision of law, cannot be sustained in the eye of the law. Consequentially, the order passed by the Tahasildar, Banspal settling the source in favour of opposite party no.4 The opposite party authorities are directed to go for fresh tender in respect of Karangadihi Sand Quarry as expeditiously as possible in the interest of justice, equity and fair play.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates