Case Note & Summary
The petitioners, SMS Limited and Mr. Nirbhay Sancheti, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court, Nagpur Bench, challenging the action of the respondents, Western Coalfields Limited and its General Manager, in treating the price quoted by the petitioner as inclusive of GST. The dispute arose from a tender invited by the respondents for coal mining services. Five bidders submitted bids, and after technical evaluation, the petitioner was declared L-1. The petitioner quoted a price which it claimed was exclusive of GST, but the respondents, relying on a clarification from GeM (Government e-Marketplace), treated the price as inclusive of GST. The petitioner requested that the dispute be referred to independent external monitors, but the respondents issued a letter of acceptance on 04-04-2025 calling upon the petitioner to furnish performance security based on the price inclusive of GST. The petitioner argued that the tender conditions clearly showed that GST was to be quoted separately and that the respondent's action was arbitrary. The respondents contended that the tender required the price to be inclusive of GST and that the petitioner had agreed to the terms. The court heard arguments from both sides, with Mr. M.G. Bhangde appearing for the petitioners and Mr. Anand Jaiswal for the respondents. The court reserved judgment on 08.09.2025 and pronounced it on 07.10.2025. The court allowed the petition, setting aside the letter of acceptance and directing the respondents to reconsider the matter afresh, taking into account the petitioner's representations and the tender conditions.
Headnote
A) Tender Law - Interpretation of Tender Conditions - GST Inclusion - Dispute regarding whether the bid price quoted was exclusive or inclusive of GST - The court examined the tender documents and held that the terms were ambiguous, but the respondent's interpretation was not arbitrary - However, the court directed the respondent to reconsider the matter in light of the petitioner's representations (Paras 3-5).
Issue of Consideration
Whether the price quoted by the petitioner in the tender was exclusive or inclusive of GST, and whether the respondent's action in treating it as inclusive was arbitrary and illegal.
Final Decision
The court allowed the writ petition, set aside the letter of acceptance dated 04-04-2025, and directed the respondents to reconsider the matter afresh, taking into account the petitioner's representations and the tender conditions.
Law Points
- Tender interpretation
- GST inclusion
- L-1 bidder
- letter of acceptance
- performance security
- writ jurisdiction
