Submission of ITR Contrary to Requirements of Auction Notice: Orissa HC quashes Decision-Making Process in Bid as Arbitrary [Read Order]

The Orissa High Court quashed the decision-making process in bid as arbitrary as the Income Tax Returns (ITR) was submitted contrary to the requirements of auction notice.

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 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 highest rate of additional charges will be selected.

The opposite party had enclosed a check list along with its bid application and vide sl.no.5 though it had enlisted “income tax return of FY 2021-22”, but in effect it had enclosed the income tax return for the assessment year 2021-22 for the financial year 2020-21. The tender notification was issued on 18.07.2022 and, therefore, the bidder was required to submit the income tax return for the financial year 2021-22 ending 31.03.2022.

The petitioner, M/s P.K. Minerals Private Ltd, raised objection to the effect that the bid application of opposite party is incomplete and, therefore, the same is liable to be rejected. But the selection committee, instead of rejecting the bid of opposite party, deferred the selection of the bid and decided to seek clarification from the concerned Department of the Government as to the validity of the income tax return submitted by opposite party for the assessment year 2021-22.

U.C. Beura, counsel for opposite party contended that the opposite party is legally liable to submit its audit report up to 7th October 2022 and income tax returns attaching the said order on or before 31st October, 2022, for which the previous year return of the opposite party no.4 is financial year 2020-21 relating to assessment year 2021-22, which was filed by opposite party no.4 along with the bid documents.

The Two-Judge Bench of the Orissa High Court observed that “Since in the instant case opposite party no.4 has not complied with the conditions, as stipulated in the auction notice, and the committee has decided to make a verification and confirmation from the concerned authorities, instead of doing so, the same could not have been settled in favour of opposite party and it is made clear 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 law”.

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M/s P.K. Minerals Private Ltd. vs State of Odisha , 2023 TAXSCAN (HC) 842 , M/s S.K. Dash, A.K. Otta,S. Das, A. Sahoo,P. Das , Mr. P.P. Mohanty