Facts of the Case

This case is a government tender/contract-law dispute, not a GST case, though the tender documents required bidders to furnish proof of GSTR-3B returns among other financial documents. The petitioner, M/s Fazal Rehman Dar, an unsuccessful bidder in a PMGSY (Pradhan Mantri Gram Sadak Yojana) road-upgradation tender in Rajouri District, J&K, challenged the technical qualification of the winning bidder, respondent No.3, M/s A.H. Wani Infratech Pvt. Ltd. The petitioner's central grievance was that respondent No.3 had submitted only Income Tax Return (ITR) acknowledgements — not full ITRs with balance sheets and profit & loss accounts — for the preceding five years, and had relied on a bank credit certificate that disclaimed the bank's own responsibility, contrary to the tender's Standard Bidding Document (SBD).

Issues Involved

  1. Whether submission of ITR acknowledgements (rather than complete ITRs with financial statements) rendered respondent No.3's bid non-responsive.
  2. Whether the bank credit certificate submitted by respondent No.3, which disclaimed bank liability, satisfied the SBD's requirement of evidence of access to credit.
  3. Whether respondent No.3 could rely on ITR acknowledgements filed by its predecessor proprietorship concern, whose business it had taken over.
  4. The scope of judicial review available to a High Court in commercial tender disputes.

Petitioner's Arguments

  • ITR acknowledgements alone did not satisfy Clause 4.4 B(a)(iii)(b) of the SBD, which required income tax returns for the last five financial years along with balance sheets and profit & loss accounts, to allow proper cross-verification of the annual turnover certificate.
  • The bank certificate submitted by respondent No.3 explicitly disclaimed any bank responsibility, and so was, in substance, no certificate at all.
  • Respondent No.3 could not rely on the ITR acknowledgements of the individual proprietor whose concern it had taken over, as it was a separate corporate entity.
  • Other bidders had reportedly been disqualified for lesser, comparable deficiencies, showing inconsistent treatment.

Respondent's Arguments

  • The purpose of requiring ITR documents was only to verify tax compliance; the actual financial capacity of a bidder was assessed from the five-year Chartered Accountant-certified turnover certificate (bearing a UDIN), balance sheet, and profit & loss account — all of which respondent No.3 had furnished separately and correctly.
  • No specific format for the bank credit certificate had been prescribed, and similar certificates from various banks had been accepted for other bidders as well.
  • Respondent No.3 had, by a registered deed, taken over all assets, liabilities, experience and qualifications of the proprietorship concern of Abdul Hafiz Wani, entitling it to rely on the earlier ITR acknowledgements.
  • The petitioner never raised any objection to respondent No.3's technical qualification within the five-working-day complaint window provided under the tender conditions, and only challenged it after losing the financial bid.

Court Order / Findings

  • The Court held that the tender-inviting authority (TIA) is the best judge of how its own tender conditions should be interpreted, and courts should interfere only where the TIA's interpretation is arbitrary or perverse, citing Silppi Constructions Contractors vs Union of India and Air India vs Cochin International Airport.
  • On the ITR issue, the Court found the TIA's stand — that ITR documents were meant only to establish tax compliance, while financial capacity was independently verified from the CA-certified turnover certificate, balance sheet, and P&L account — to be neither arbitrary nor perverse.
  • On the bank certificate, since no specific format was prescribed and similar certificates from various banks (including one accepted for the petitioner himself) had been accepted for other bidders too, no fault could be found with the TIA's acceptance.
  • On the corporate takeover issue, the Court accepted the registered deed showing respondent No.3 had acquired all assets, liabilities, experience and qualifications of the earlier proprietorship, distinguishing the petitioner's cited Delhi High Court precedent on its facts.
  • The Court also noted the petitioner had not challenged respondent No.3's eligibility within the stipulated five-working-day window and had earlier pressed for early finalisation of the tender.
  • Finding no perversity or public-interest ground for interference, the writ petition was dismissed as devoid of merit.

Important Clarification

This is a tender/contract-law ruling on the limited scope of judicial review of technical bid evaluations — it does not decide any point of GST law, notwithstanding that GSTR-3B proof was one of many eligibility documents required by the tender.

Sections Involved

  • Constitution of India, 1950 — Article 226 (limited scope of judicial review in tender/contract matters)
  • Standard Bidding Document under the PMGSY tender framework

Decision – In Favour of

Decided against the petitioner; the writ petition challenging the tender award was dismissed. Not a GST ruling.

Case Details

Court: High Court of Jammu & Kashmir and Ladakh at Jammu
Case No.: WP(C) No. 72/2023, CAV No. 104/2023
Coram: Hon'ble Mr. Justice Rajnesh Oswal
Date of Judgment: 4 August 2023

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