Sri Venkateswara Constructions Vs State of Odisha & Ors (Supreme Court of India)
Conclusion: Orissa High Court had committed a gross error in interfering with the original selection of the bidder and directed a fresh tendering process as submission of a valid Income Tax Return and GST clearance certificate was sufficient compliance for bidder qualification under the tender conditions.
Held: Assessee challenged the High Court’s order which had quashed the original selection of the bidder and directed a fresh tendering process. There was an auction notice announced by the Tahasildar, Banspal (Respondent No.2 herein) for the long-term lease of the Karangadihi Sand Quarry for five years. After the opening and scrutiny of the bids, it was found that assessee had quoted the highest additional charge of ₹589, while Respondent No. 4, M/s P.K. Minerals (P) Ltd. had quoted the second highest additional charge of ₹221. Subsequently, Tahasildar declared Venkateswara Constructions as the successful bidder on the ground that all requisite documents, including the latest Income Tax Return and GST certificate from the jurisdictional officer, were duly submitted. The announcement was unsuccessfully contested by P.K. Minerals before the Sub-Collector.Aggrieved, P.K. Minerals challenged the validity of the tender process before the Orissa High Court and sought cancellation of the award in favour of assessee. The Orissa High Court noted that Sri Venkateswara Constructions had filed ITR for the financial year immediately preceding the bid submission date, and therefore failed to meet the mandatory condition under Rule 27(4)(iv) of the Odisha Minor Minerals Concession (Amendment) Rules, 2022. Ranjeet Singh, appearing for assessee submitted that assessee was a tax-audited firm with turnover exceeding ₹1 crore, and that the Income Tax Return for FY 2021–22 was not due until 31.10.2022, hence, submission of the FY 2020–21 return was lawful and valid at the time of bid submission. Additionally, the GST certificate issued by the Superintendent of Central GST confirmed no outstanding dues and that the re-tender order resulted in loss of competitive advantage and investments already made in connection with the lease. Meanwhile, Respondents was of the opinion that assessee criticized the veracity of the Income tax return and the GST certificate adduced while critiquing the “premature action” taken by the Tahsildar and failure to verify the authenticity of the certificates. It was held that Tahsildar was justified in accepting the Income Tax Return for FY 2020–21, since the FY 2021–22 return was not yet due. It was affirmed that the certificate from the GST authority sufficiently indicated compliance, despite carrying standard caveats. The apex court found no illegality in the process adopted by the revenue authorities, and observed that the appellant’s bid was substantially higher, which could have benefited the State exchequer. Respondent, on the other hand, failed to submit an official GST no-dues certificate and merely provided a GST portal screenshot, which did not satisfy the tender conditions. Consequently, the Orissa High Court had committed a gross error in interfering with a fair and valid selection.
