Union Of India Vs Bharat Forge Ltd

The case involves a writ petition filed by the first respondent (referred to as the “Writ Petitioner”) which was granted leave by the court. The High Court, in its impugned judgment, disposed of the writ petition and issued directions. The primary direction pertains to respondent no. 2, the General Manager of the Diesel Locomotive Works in Varanasi. The direction specifies that if the GST value is to be included in the base price to determine the total price of an offer for procurement of products in a tender, and if it is also used to determine interse ranking, certain actions or considerations should be taken. However, further details or specifics of these actions or considerations are not provided in the summarized text.

The case revolves around a writ petition filed by the first respondent (referred to as the “Writ Petitioner”) concerning a judgment issued by the High Court. The High Court, in its judgment, disposed of the writ petition with specific directions regarding the inclusion of GST (Goods and Services Tax) value in the base price for procurement of products in a tender process.

The High Court directed the General Manager of Diesel Locomotive Works, Varanasi (referred to as “respondent no. 2”) to clarify the issue of GST applicability and correct HSN (Harmonized System of Nomenclature) code of the procurement product. This clarification was to be mentioned in the Notice Inviting Tender (NIT) to ensure uniform bidding and a level playing field for all participants.

The appellants, who are the aggrieved parties, objected to both the rationale behind the High Court’s decision and the final direction provided.

The background of the case involves a global tender published by Diesel Locomotive Works for the procurement of turbo wheel impeller balance assembly on April 11, 2019. The writ petitioner was one of the tenderers, along with respondents 6 to 8. Respondent No. 6 in the writ petition corresponds to respondent No. 2 in this appeal. Respondents 7 and 8 were initially involved in the case but later removed from the proceedings at the request of the appellants.

In summary, the dispute centers on the interpretation of GST inclusion in the base price for tender procurement and the necessity for clarity and uniformity in tender documents to ensure fair competition among bidders.

appellants to re-evaluate the bids submitted in response to the tender in question, taking into account the correct GST rates and HSN codes, and award the tender accordingly.

1.The primary contention of the appellants revolves around the applicability of GST (Goods and Services Tax) and the correct Harmonized System of Nomenclature (HSN) code pertaining to the procurement product. They argue that the High Court’s direction to clarify the issue with GST authorities and specify the correct HSN code in the tender documents would impose an unnecessary burden on the tendering process and could lead to ambiguity and inconsistency in bidding.

2.The appellants further assert that the determination of interse ranking in the tender process should not be contingent upon GST value or HSN code, as it may not necessarily reflect the true merit or competitiveness of the bids. They contend that such factors are extraneous to the evaluation criteria laid down in the tender documents and could potentially disadvantage certain bidders.

3.Conversely, the first respondent, the writ petitioner, contends that clarity regarding GST rates and HSN codes is essential to ensure fair competition among bidders and prevent any disparities arising from incorrect or inconsistent tax treatment. They argue that specifying the correct HSN code and GST rate in the tender documents would facilitate uniform bidding and create a level playing field for all participants.

4.The crux of the dispute lies in balancing the need for clarity and consistency in tax treatment with the imperative of maintaining a fair and transparent tendering process. The High Court’s direction to clarify the issue with GST authorities and specify the correct HSN code in the tender documents reflects an attempt to address this tension and ensure equitable participation in the procurement process.

5.In adjudicating the matter, the Supreme Court must weigh the competing interests of promoting efficiency in procurement procedures and safeguarding the principles of fairness and equal opportunity. The resolution of this case will have implications not only for the parties involved but also for the broader framework of public procurement and taxation policies in the country.

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