M/s. KOTHAMANGALAM AGGREGATES Versus KERALA STATE ELECTRICITY BOARD VYDYUTHI BHAVAN
GST
2018 (5) TMI 365 – KERLA HIGH COURT – TMI
KERLA HIGH COURT – HC
Dated:- 6-4-2018
W. P. (C) Nos. 1112, 2221, 2450 & 4034 of 2018
GST
MR. SHAJI P.CHALY J.
BY ADVS.SRI.M.RAMESH CHANDER (SR.), SMT.K.A.SANJEETHA And SRI.BALU TOM
MR. ABHIJITH SURANA., R1 & R2 BY SRI.RAJU JOSEPH SENIOR ADVOCATE, BY SRI.GEORGEKUTTY MATHEW, SC, BY SRI.P.A.AHAMED, SC, R3 BY ADVS. SRI.BOBY MATHEW And SMT.K.MEERA
JUDGMENT
The captioned writ petitions are materially connected in respect of a tender invited by the 1st respondent, Kerala State Electricity Board for supply of 8M and 9M Pre Stressed Concrete Poles (PSC Poles) to the Electrical Circles under Southern and Central Region, for a period of two years, as per Ext.P1 notification dated 28.09.2017. The legal as well as factual contentions raised in the writ petitions are almost typical in nature. For the disposal of the writ petitions, I am relyi
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ocessing, for the reason that, for the manufacture of pre stress concrete poles, the rawmaterials required are cement, steel, coarse aggregates and fine aggregates. When the petitioner sells the PSC Poles to the Board, then GST is imposed, which is known as output GST. When the raw-materials are purchased, there is input credit of GST. However, the GST incurred by the petitioner at the time of purchase of the raw-materials shall be adjusted towards GST payable at the time of sale of Poles and net amount shall be paid to the Government. So also, the input tax credit varies from time to time based on the cost of raw-materials. It was highlighting the said aspect, Ext.P2 letter was issued. However, without hearing the petitioner, the Board issued Ext.P4 corrigendum dated 19.10.2017, informing that, no change in the clauses of tender documents is necessary.
3. It is the case of the petitioner that, as evident from Ext.P4 corrigendum, there is no change either in the general conditions of
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there is violation of the general conditions of contract and special conditions of contract. It is also the case of the petitioner that, the 3rd respondent has submitted documents which were not called for in the tender notice, and therefore, there is a clear violation.
5. Petitioner has produced Ext.P7 attachment given by the 3rd respondent, stating that he has quoted the price after giving the effect of GST credit, which according to the petitioner, is impermissible in accordance with the Instructions to the Bidders as well as the general conditions of contract and special conditions of contract. Therefore, according to the petitioner, the 3rd respondent has violated the basic conditions of the documents by which the 3rd respondent is not technically qualified to participate in the commercial bid. It is thus seeking the following reliefs, the writ petition is filed:
“i) Issue a writ of mandamus or other appropriate writ order or direction directing or compelling the respondents 1
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stated that, the writ petition is not maintainable, since as per the special conditions of contract, petitioner has agreed to approach the civil courts at Thiruvananthapuram in the event of disputes arising pertaining to the contract. Therefore, according to the said respondents, the writ petition is not maintainable under law. The averments contained in various paragraphs with respect to Clause No.B.20 'Taxes', of Ext.P3 special conditions of contract and the violation of the general conditions of contract and the issue with respect to the qualification of the 3rd respondent are all denied by the said respondents. According to the respondents, Clause B.20 is formulated in order to specify fair, logical and transparent conditions to suit their requirements while procuring materials. It is also clearly stipulated that the benefit of the input credit will be passed on to KSEBL as per Sec.171 of CGST Act, and in the very next sentence, it has been stated that, 'any reduction i
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conditions, evident from Ext. R1(a). From Ext. R1(a), it is evident that, in respect of 8m poles except for the Electrical Circle, Kattakkada, 3rd respondent is the lowest one. As far as 9m poles are concerned, except for Electrical Circles, Kollam, Kattakkada and Kottarakkara, the rate quoted by the 3rd respondent is the lowest. There is a marked difference of Rs. 9,63,35,681/-. If the tender is finalized, as per the above stated price bids, the respondents who are an agency or instrumentality of the State, will be benefited to the tune of Rs. 7.23 Crores. According to the respondents, the said amount is arrived at based on the difference in rates quoted by the 3rd respondent and the 2nd lowest, and where 3rd respondent is the L1 after taking into consideration the difference in amount wherever 3rd respondent is the L2, evident from Ext. R1(b). Therefore, according to the respondents, petitioners have not made out any case in order to secure the reliefs sought for in the writ petition
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and Shri. K. Jaju Babu, learned Senior Counsel for the petitioner in W.P.(C) No.2450 of 2018 and the other Advocates appearing for the petitioners in the other writ petitions, Sri. Raju Joseph, learned Senior Counsel appearing for respondents 1 and 2 and also the learned counsel appearing for the 3rd respondent. Perused the documents on record and the pleadings put forth by the respective parties.
11. The paramount contention advanced by learned Senior Counsel for the petitioners is that, as per the Bid specification, Part-I, Pre-qualification bid, Part-B, it was directed to send only the hard copies of agreement in Kerala Government stamp paper as per Appendix IV of General Conditions of Contract along with the Bid form (Part-III, Annexure-II) in Kerala Government stamp paper. But it is noticed that the 3rd respondent has submitted many other documents as hard copies, which discusses about price. It is also the contention that, mention of price details at any place other than the de
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e 14 of Section-A (Bid specifications Part-II, Instruction to Bidders), the indication of price anywhere else other than in price bid (BOQ) will render the tender invalid and will be liable to be rejected. Therefore, according to the learned Senior Counsel, Ext.P7 enclosure produced along with the bid is violative of clause 14. It is also the case of the learned Senior Counsel that, as per clause 15 of Section-A, conditional offers are liable to be rejected, and therefore, the bid submitted by the 3rd respondent ought to have been rejected by the Board. Other arguments are also advanced in tune with the pleadings made in the writ petition.
13. Yet another contention advanced is that, the 3rd respondent does not have sufficient water tanks for water dipped curing of poles as per the specification of KSEB Ltd., except one small tank they have constructed recently to satisfy the pre-qualification condition. That apart, it is contended that, the 3rd respondent is not having sufficient 9M
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ention for the petitioners that the 3rd respondent has violated the special conditions of contract and the only contention is that, they have added Ext.P7 along with the bid document, which is in no way causing any manner of prejudice to the petitioners or violating the terms and conditions contained in the special conditions of contract and the general conditions of contract.
16. It is also submitted that, so far as respondents 1 and 2 are concerned, when a price is quoted by the tenderer, it is the price in commensurate with the tender conditions, and therefore, even if Ext.P7 is submitted by the 3rd respondent, the same can be ignored by the Board. So also, it is contended that, the price difference is more than Rs. 7 crores from the second lowest bidder, as per the calculations specified and quoted above. Learned counsel appearing for the 3rd respondent also advanced contentions in tune with the contentions advanced by respondents 1 and 2.
17. I have evaluated the submissions mad
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implication with respect to the terms and conditions of the contract, and respondents 1 and 2 are entitled to overlook the same and consider the bid submitted by the respective parties.
18. Clause 14 of Section-A stipulated that: “The indication of price anywhere else other than in the price bid (BOQ) will render the bid invalid and will be liable to be rejected”. Therefore, the said stipulations are also specific and clear to the effect that, what is prohibited is indication of price anywhere else other than in the price bid. Therefore, merely Ext.P7 communication is issued by the 3rd respondent, “that the effect of GST credit to be availed has been taken in account in the quoted price” will not in any manner interferes with clauses 14 and 15 of Section-A. Clause 21 stipulates that: “No deviations will be accepted”. There is no case for the petitioners that there is any deviation on the part of the 3rd respondent from the Instructions to Bidders, special conditions of contract or ge
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ally agrees to bear will be admitted at the rates applicable at the time of delivery, on the basis of an undertaking on Kerala Government stamp paper worth Rs. 500/- from the supplier in the following format:
“P.O. No………………………..dated …………….(Name & address of firm) hereby agrees that if any dispute on payment of taxes from concerned tax authorities occurs in future, the firm shall indemnify the KSEB Limited from such liabilities and supplier will be liable for the additions, loss or cost on account of such discrepancies/dispute”. The benefit of input tax credit will be passed on to KSEB Limited as per Section 171 of CGST Act. Any reduction in rates of tax on any supply of goods or services or the benefit of input tax credit shall be passed in to the recipient by way of commensurate reduction in prices. KSEB Limited is a registered dealer under the Goods and Service Tax Act. GST identification Number (GSTIN) of KSEB Limited in 32AAECK2277NBZ1.”
21. So far
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values of Whole Sale Price Index Number for Manufacture of Basic Metals (published by IEEMA) and Consumer Price Index Number (published by the Department of Economics and Statistics) during the month under consideration, from its values on the due date of tender.
Price variation will be given for the poles supplied as per the monthly delivery schedule (monthly supply less than or equal to monthly target/allocation) at the rates applicable for the actual month of supply.
Price variation for the monthly supply in excess of the monthly target to meet the quarterly target will be applicable at the rate of actual month of supply or scheduled month of supply (within the quarter), whichever is lower.
Price variation will be given for the excess poles supplied in a quarter (poles supplied in excess of quarterly target) at the rates applicable for the actual month of supply, only if the supply is made as per the written allocation given by the respective consignees of the Electrical Ci
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onsidered opinion, the General Conditions of Contract will have to be taken into account and read along with the special conditions of contract. First of all, there is no price variation clause put forth by the 3rd respondent. As I pointed out earlier, in Ext.P7, the 3rd respondent has specified an aspect with respect to the GST billing. From Section-A Instructions to Bidders, it is evident that if any communication from a contractor is not acceptable to the Board, it can be ignored by the Board. Even though a case is projected by the petitioners that the tender offered by the 3rd respondent is subject to conditions of verification of the documents, it cannot be said that the tender made by the 3rd respondent is conditional in nature. It is also clear that no manner of prejudice is caused to the petitioners on that account, especially due to the fact that such a course of action adopted by the 3rd respondent is not egregiously violative of the tender conditions.
23. When this writ pet
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