Full Judgment Text
NON-REPORTABLE
2025 INSC 580
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). ____________OF 2025
(@ Special Leave Petition (C) No(s). 12174 of 2023)
M/S Sri Venkateswara Constructions Appellant(s)……
VERSUS
State of Odisha & Ors. Respondent(s)…….
WITH
CIVIL APPEAL No(s). ____________OF 2025
(@ Special Leave Petition (C) No(s). 18198 of 2023)
J U D G M E N T
PRASANNA B. VARALE, J:-
1. Leave granted.
Signature Not Verified
2. The challenge in the present appeals is to the order dated
Digitally signed by
RAVI ARORA
Date: 2025.04.28
17:39:00 IST
Reason:
18.05.2023 in Writ Petition no. 32063/2022 whereby the High
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Court of Orissa allowed the petition preferred by the respondent
no.4 herein and has thereby set aside the order/s impugned and
in addition has directed for fresh tender in respect of Karangadihi
Sand Quarry.
3. The factual background is that on 18.07.2022 the Tahasildar,
Banspal (Respondent no. 2 herein) floated an auction notice for
long term lease of Karangadihi Stone Quarry for a period of five
years, i.e., from the financial year 2022-23 to 2026-27. The last
date of submission of bid was fixed to 04.08.2022 and the date of
opening of bid was fixed to 05.08.2022. The auction notice
specified the list of documents to be enclosed by the bidders along
with the bid application. The important documents which are in
question in the present case are:
“5. Income Tax Return of Previous Financial Year in which
the annual income shall not be less than the royalty
mentioned in schedule-1 as per annual Minimum
Guaranteed Quantity (MGQ) of minor minerals and
additional charge offered in the application of the applicant
or Bank Guarantee with 18 months validity which shall not
be less than the royalty mentioned in schedule-1 as per
annual Minimum Guaranteed Quantity (MGQ) of minor
minerals and additional charge offered in the application by
the applicant and the applicant shall furnish details of other
immovable property [Income Tax Return of Previous
Financial Year showing annual income/ Requisite Extent of
Bank Guarantee = Minimum Guaranteed Quantity X
(Offered Additional Charge + Royalty)]
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7. The bidder shall furnish a certificate/letter from the
concerned GST jurisdictional officer that no GST dues are
pending against such bidders”
4. The tender drop box was opened, on 05.08.2022 at 11.30
A.M., by the selection committee, comprising of Tahasildar,
Banspal, Addl. Tahasildar, Banspal and Revenue Inspector in
presence of applicants or their representatives. Five sealed
envelopes were found to be submitted by Dileswar Behera, Anil
Khirwal, Soumyajit Mohanty, M/s Sri Venkateswar Construction
(petitioner herein) and M/s P.K. Minerals (P) Ltd. (respondent no.4
herein).
5. On scrutiny of the documents, it was found by the Tahsildar
in its order dated 05.08.2022 that bids of Dileswar Behera, Anil
Khirwal, Soumyajit Mohanty were not accompanied with required
documents. It was further found that petitioner herein has quoted
the highest additional charge at rate of Rs. 589/- and the
respondent no.4 herein has quoted the second highest additional
charge at rate of Rs. 221/-. Consequently, the petitioner was
selected and declared as the successful bidder. The reasons given
by the Tahsildar for declaring the petitioner as the successful
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bidder and for rejecting the bid of respondent no.4 herein are
reproduced below:
“The Serial No.04, M/S P.K Minerals Ltd. MD Soumya Ranjan
Pahi. of Susila Saw Mill Campus, Keonjhar the 2nd highest bidder
have not submitted any letter or certif[cate from the concerned
GST Jurisdictional authority. In the advertisement No.1895
dt18.07.2022 of tender call notice, the bidders were" asked to
furnish a certificate/ letter from concerned GST jurisdictional
officer that no GST dues are pending against such bidders". But
it is found that he has submitted only a photocopy of GST portal
site from internet , which can't be considered as certificate or
letter from the concerned GST jurisdictional Officer. Hence the
case of 2nd highest bidder is not considered.
On the other hand, SL No. 05, M/S Sri Venkateswara
Constructions Managing Partner Ganta Naga
Subrahamanyeswar Rao, Rutisila, District-Keonjhar who quoted
the highest rate of additional charge @ Rs.589/- has submitted
all requisite documents along with the IT return of assessment
year 2021-22, which needs to be clarified in conformity with
tender advertisement. On enquiry M/S Sri Venkateswara
Constructions Managing Partner Ganta Naga
Subrallamanyeswar Rao, Rutislla, District-KeonJhar has
submitted an certificate from Chartered Accounts EVB Reddey
and Associates with Registration No.011050S, where he
has clarified that the due date of filing of audited balance
sheet profit and loss account for financial year 2021-22 is 30th
September, 2022 and the due date of filing of IT return is 31st
October, 2022 and for this aforesaid balance sheet may be
treated as previous year ITR. It is also clarified that U/S 44AB of
IT Act 1961, in case of Partnership firm whose turnover is more
than Rs 1 Crore , the due date of filing audited balance sheet and
profit & loss account for the year 2021-22 is 30th September and
due date of filing ITR is 31st October. Hence the requisite amount
of IT return of Assessment year 2021-22 submitted by M/S Sri
Venkateswara Constructions Managing Partner Ganta Naga
Subrahamanyeswar Rao, Rutisila, District-Keonjhar is in
consonance with the Income Tax circular of Govt of India and also
in accordance with the tender requirement. Besides these M/S Sri
Venkateswara Constructions, Managing Partner Ganta Naga
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Subrahamanyeswar Rao, Rutisila, District-Keonjhar has also
submitted the certificate/letter from the Office of the Supdt.
Central GST & Central Excise, Jajpur Range, Jajpur Road, that
there is no GST liability against M/S Sri Venkateswara
Constructions Managing Partner Ganta Naga
Subrahamanyeswar Rao, Rutisila, Distnct-Keonjhar bearing GST
IN No.21ABHFS6939AIZD vide C No.CGST-
;21/06/Misc,.GST/JPR-II/2022/1173. In addition to these M/s
Sri Venkateswara Constructions Managing Partner Ganta Naga
Subrahamanyeswar Rao, Rutisila, District-Keonjhar has quoted
highest rate @ Rs.589/-, which is far higher than the rate of 2nd
highest bidder i.e.@ Rs.221/- which will increase the highest
revenue to the Govt. exchequer”
6. Accordingly, an intimation letter dated 10.08.2022 was
issued to the petitioner and subsequently, further process had
commenced such as deposit of the security money along with other
charges under various heads like Royalty, etc.
7. The respondent no.4 herein has challenged the order of
Tahsildar dated 05.08.2022 and preferred an appeal before Sub-
Collector (Respondent no. 3 herein).
8. The Sub-Collector vide its order dated 20.10.2022 dismissed
the appeal filed by the respondent no.4 herein, the reasoning given
for dismissing the appeal is enumerated below:
“After careful verification of documents available in the C/R, it is
found that the return available as per the Act has been submitted
with Tender Notice and the condition of the Annual Turnover and
Net Worth of all partners also fulfilled and satisfied as the entire
audited balance sheet and return for the Assessment year 2021-
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22 relating to the previous year 2020-21as on the date of auction
that was on 04.08.2022.
The respondent No.1 has not committed any illegality in respect
of acceptance of the Income Tax Return of the respondent No.2
and consequential order is valid.
The second point of challenge before this court is that regarding
the condition as per clause No.5 of the Auction Notice, the
Bidders/participants have to submit their immovable property list
and particulars alongwith the application, whereas the
respondent No.2 has not furnished such particular, hence he is
not eligible for such tender.
In reply, the respondent No.2 submitted that he has disclosed its
income for the last Assessment Year is about Rs.1,81,06,830/-
and under these circumstances the submission of details of
immovable property is not required as per the terms and
conditions for submission of tender.
It is further submitted with reference to the CHECK LIST of
documents submitted by the Respondent NO.2 at Sl. No. 6, it has
been listed as Immovable property (sale deed) is attached. So,
this ground of challenge has not based on material.
The last ground of challenge of the appellant is that the
Respondent No.1 hurriedly completed the process of verification
without verifying the GST certificate submitted by the respondent
No.2. As per the records, the Respondent No.1 is satisfied and
verified the facts that, the no dues certificate has been issued by
the jurisdictional officer of the respondent No.2 and found correct
in respect of dues stands against the firm as on the date of
selection and no other condition is required to be satisfied,
whereas in other hand the appellant has not obtained the GST no
dues certificate from his jurisdictional officer, thus there was no
scope for any verification. The Appellant has not submitted any
more evidence against the documents submitted by the
Respondent No.2 which seems to be invalid as per the conditions
of the tender or otherwise fake or false. Hence, the objection on
this score raised by the Appellant is not sustainable in the eye of
law. ”
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9. On being aggrieved by the order of Sub-Collector the
respondent no.4 herein filed a Writ Petition before the High Court
of Orissa praying to set aside the order passed by the Sub-Collector
and Tahsildar. The High Court vide the impugned order allowed
the appeal of the respondent no.4 herein and thereby had
quashed the order dated 05.08.2022 passed by the Tahasildar and
order dated 20.10.2022 passed by Sub-Collector, and in addition
had directed for fresh tender. The High Court while allowing the
appeal has observed as under:
“ 7. On the basis of the factual matrix, as delineated above, before
delving into the merits or the case itself, Clause-(iv) of Rule-27(4) of
the Odisha Minor Minerals Concession (Amendment) Rules, 2022,
which is relevant for the just and proper adjudication of the case,
is taken note of:
"R-27/4/(iv). Income tax return of previous financial year showing
annual income far on amount not less than the amount of
additional charge offered and the royalty payable for the minimum
guaranteed quantity for one whole year or bank guarantee valid
for a period of eighteen months for the amount not less than the
amount as above.”
8. As per the provision mentioned above, the bidder has to submit
the income tax return of previous financial year for g an amount
not less than the amount of additional charge offered and the
royalty payable for the minimum guaranteed quantity for one
whole year or bank guarantee for a period of 18 months for the
amount of additional charges offered. As required under Clause-5
of the auction notice, though opposite party no.4 had enclosed a
check list along with bid application and vide sl.no.5 had enlisted
"income tax return of FY 2021-22", but had enclosed the income
tax return for the assessment year 202122 for the financial year
2020-21. As the tender notification was issued on 18.07.2022, the
bidder was required to submit the income tax return for the FY
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ending 31.03.2022. If the same would be taken into consideration,
the bid application submitted by opposite party no.4 was without
any income tax return of the financial year 2021-22, therefore, the
same should have been rejected. Apart from the same, against
sl.no.8 of the check list, opposite party no.4 had mentioned "GST
no dues certificate", but the certificate enclosed was not a statutory
certificate and, as such, the same was issued before the
submission of income tax return of FY 202122. Furthermore, the
said certificate was issued on the request made by the assessee
and, as such, the same was a conditional one. The GST Authorities
had made it clear that the certificate is not valid in case of any
liability arises for the said period and at the time of scrutiny of
details. Meaning thereby, the authority had reserved the right to
cancel and declare the certificate to be invalid.
9. So far as the petitioner is concerned, it had no clues of Goods
and Service Tax (GST). On 28.07.2022, the petitioner had applied
to the Superintendent, Central Excise (CGST, Keonjhar1 Range for
issue of a "No Dues Certificate" to comply with Clause-7 of the
auction notice. But the CGST Authorities advised the petitioner to
download the information from their website. Accordingly, the
petitioner had downloaded the information from their website,
which contained the information that the petitioner had no
outstanding GST dues. Thereby, the same is in compliance of
Clause-7 of the auction notice. As a consequence thereof, the
petitioner objected to the bid submitted by opposite party no.4, but.
without considering the same, the authorities proceeded with the
decision making process of selection and allotment of the
quarry…….
10. On perusal of the endorsement of the committee, it is made
clear that opposite party no.4 had quoted additional charge at the
rate of Rs.589/-, but, so far as its income tax return for the
assessment year 2021-22 is concerned, a clarification was to be
given by the competent authority in consultation with the
concerned department/authority, and, as regards no dues
certificate obtained from the CGST department, confirmation was
to be made by the concerned authority. Similarly, it was observed
that the petitioner had quoted additional charge of Rs.221/·, but,
however, the no dues certificate obtained from GST portal was
needed to be confirmed from the concerned department/authority,
if necessary, and, thereafter, the tender would be finalized. If such
requirement has to be complied with, pursuant to the observation
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made on 05.08.2022, without getting such clearance from the
respective departments and getting confirmation from the
respective authority, as was observed, the authority could not
have proceeded with the matter and finalize the tender in favour
of opposite party no.4 on the very same day, i.e., 05.08.2022.
Thereby, the entire decision making process of the tendering
authority is arbitrary, unreasonable and contrary to the provisions
of law. Under these circumstances, this Court, in exercise of the
powers conferred under the judicial review, has got jurisdiction to
interfere with the decision making process of the tendering
authority.
20. A contention was raised that opposite party no.4 had quoted
highest price of Rs.589/as additional charge and the petitioner
had quoted Rs.221/-, therefore, opportunity should have been
given to the petitioner to match with the bid price of opposite party
no.4. But that question does not arise, in view of the fact that the
document, which had been submitted by the petitioner with regard
to no dues certificate from GST authority, is also required to be
verified by the concerned department/ authority, if necessary.
Thereby, this Court is of the considered view that even if the
petitioner is called upon to match the highest price, but its bid will
suffer from deficiency like that of opposite party no.4. Therefore,
the question of calling upon the petitioner to match the highest price
offered by opposite party no.4 may not arise. ”
10. On being aggrieved with the impugned order passed by the
High Court the petitioner herein as well as the respondent no.4
through another SLP (C) no. 18198/2023 has preferred the present
appeals. Both the appeals are being decided by this common
judgement.
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11. The Ld. counsel for the petitioner submitted as follows:
11.1 That the petitioner submitted the latest available Income Tax
Return as per the law. The auction notice, issued on 18.07.2022,
had a submission deadline of 04.08.2022. According to Section
139(1) and Section 44AB of the Income Tax Act, 1961, the due date
for filing the Income Tax Return for financial year 2021-2022 for a
tax audit subject bidder is 31.10.2022. Since the Petitioner, a
partnership firm with a turnover above Rs. 1,00,00,000/-(Rupees
one crore) was subjected to a tax audit and had not yet filed the
2021-2022 return by the bid submission date, the 2020-2021
return was considered the relevant return. In view of express
provisions of Income Tax Act, 1961 the interpretation adopted by
Respondent Nos. 1-3 is reasonable, ensuring fairness and a level
playing field for all bidders. A strict interpretation of the bid
condition would have been disadvantageous to bidders subject to
a tax audit under the Income Tax Act. It is further submitted that
it is not impossible to determine the financial soundness of a
bidder and eligibility of a bidder under bid condition no. 5 from the
latest available income-tax return filed by the bidder.
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11.2 That the certificate obtained by the Petitioner from the GST
jurisdictional officer dated July 28, 2022 confirms that, as per the
GST liability register, there was no outstanding GST liability
against the Petitioner as of that date, thereby fulfilling the
requirement under bid condition S. No. 7 of the auction notice. The
disclaimers in the certificate merely state that future liabilities may
arise due to events like scrutiny or audit—a standard and
universally applicable caveat. Such disclaimers do not undermine
the validity or sufficiency of the certificate, which accurately
reflects the Petitioner's compliance status at the time of issuance.
11.3 That confirmations and clarifications from relevant
authorities are not essential preconditions to awarding a tender,
as long as proper verification is conducted. In this case, the
Tahasildar initiated clarifications and verifications on the same day
and recorded his findings. Upon examining the Income Tax Act,
1961, he concluded that for tax-audited entities like the Petitioner,
the due date for filing the 2021–2022 return was October 31, 2022,
making the 2020–2021 return the latest available at the time of
bidding and compliant with condition S. No. 5 of the auction notice.
He also found the 'GST no dues' certificate submitted by the
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Petitioner to be in order, as it confirmed there were no outstanding
dues thus, meeting the requirement under S. No. 7.
11.4 That there was nothing in the order sheet noting that
Respondent No. 2 was restricted from conducting immediate
verification or the tendering authority prescribed any specific
standard or degree of verification. The fact that respondent no. 2
examined and verified the documents on the same day should not
prejudice the Petitioner, especially since the Petitioner’s bid was
found to be both compliant and the highest by a significant margin.
11.5 That Respondent No. 4 failed to comply with bid condition S.
No. 7 by submitting a self-downloaded printout from the GST
portal instead of an official 'no dues' certificate or letter from the
relevant authority. There was no proof supporting the claim that
CGST authorities advised submitting such a printout, and the
document lacked any official verification or certification. This non-
compliance was acknowledged by Respondent No. 2 in his order,
and the Hon'ble High Court also rejected Respondent No. 4’s
arguments regarding the same in the impugned order. Accordingly,
Respondent No. 2 rightly rejected Respondent No. 4’s bid on this
ground.
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11.6 That While interpreting Rule 27(4)(iv), it is important to
consider that the provision was amended less than four months
before the auction notice, leaving limited precedent or established
procedural practice for authorities to follow. Therefore, the
approach taken by the tendering authorities (Respondents No. 1–
3) in not adhering strictly to a literal interpretation of the condition,
but instead ensuring a level playing field for all bidders, is
reasonable and cannot be faulted.
11.7 That Tax authorities do not typically issue “no dues
certificates” as part of statutory provisions but may do so upon
request, as in the Petitioner’s case for bid submission. Since no
specific format was prescribed in S. No. 7 of the auction notice, the
Petitioner could not be expected to dictate the format or wording of
the certificate issued by the statutory authority. Therefore, it was
not within the Hon'ble High Court’s purview to impose additional
requirements or mandate a specific certificate format when the
tendering authority itself had not done so.
11.8 That HC should not have quashed the entire tender process
but could have directed the Tahasildar to make appropriate
enquiries with the relevant authorities and pass a reasoned order
based on such enquiries finally settling the tender.
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11.9 That the Petitioner, currently the highest bidder, has lost its
competitive advantage as its bid amount is now in public. This
order unfairly allows all bidders, including previously unsuccessful
ones like Respondent No. 4, a chance to match or outbid the
Petitioner in the re-tender process. Moreover, the order fails to
consider the Petitioner’s incurred expenses, obtained consents and
licenses, and offers no protection regarding the security deposit,
royalties already paid, or other investments made pursuant to the
original tender award.
11.10 Petitioner has placed reliance on several Supreme Court
decisions emphasizing judicial restraint in interfering with tender-
related decisions made by the employer. In Central Coalfields
Ltd. v. SLLSML (2016) , the Court held that the employer's
determination of essential tender terms must be respected and is
not subject to judicial scrutiny. In G.J. Fernandez v. State of
Karnataka (1990) , it was affirmed that deviations from tender
terms are permissible if they apply equally to all applicants and are
non-objectionable. Similarly, in Tata Cellular v. Union of India
(1994) , the Court clarified that judicial review focuses on the
lawfulness—not the soundness—of administrative decisions, and
such decisions will not be interfered with unless they are arbitrary,
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irrational, mala fide, or biased. This principle was reiterated in
Jagdish Mandal v. State of Orissa (2007) , where the Court held
that courts should not intervene at the behest of unsuccessful
bidders over mere technical or procedural issues. Accordingly, the
interpretation of condition S. No. 5 is reasonable, ensures equal
treatment of applicants, and does not warrant judicial interference.
12. Per contra, the Ld. Counsel appearing for the respondent no.4
submitted as follows:
12.1 That The income tax return for the previous financial year
was a crucial requirement of the tender and could not be
disregarded. Since the tender was advertised on 18.07.2022, the
required return was for the financial year 2021–2022. However, the
Petitioner submitted the return for the financial year 2020–2021,
corresponding to the previous assessment year. Despite this non-
compliance, the Tahasildar allegedly acted illegally and with mala
fide intent in selecting the Petitioner as the successful bidder.
Additionally, the Petitioner failed to submit a proper ‘no dues’
certificate from the GST jurisdictional officer. The certificate
submitted was conditional, issued upon the Petitioner’s request,
and explicitly stated that it would be invalid if any liability arose
15
during scrutiny, implying that the GST authority had reserved the
right to cancel it.
12.2 That the tender box was opened on 05.08.2022, and a
comparative statement of the bids received under the
advertisement dated 18.07.2022 was prepared. The tender
committee's endorsements clearly indicated that the finalization of
the tender was contingent upon receiving necessary clarifications
regarding the bids of both the Petitioner and Respondent No. 4.
However, without awaiting these clarifications, the Tahasildar
proceeded to declare the Petitioner as the successful bidder on the
same day through an allegedly illegal and mala fide order. The
Hon'ble High Court, in paragraph 10 of the impugned order, noted
this irregularity and the premature action taken by the Tahasildar.
12.3 That Respondent No. 4 applied to the Superintendent, Central
Excise (CGST Authority) for a "No Dues Certificate" as required
under Clause 7 of the tender advertisement dated 18.07.2022.
However, the CGST authorities advised Respondent No. 4 to
download the relevant information from their website. Accordingly,
Respondent No. 4 submitted the downloaded document, which
indicated that there were no pending GST dues. This submission
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was considered compliant with Clause 7, as the tender scrutiny
committee did not raise any objections regarding it.
12.4 That the advertisement for the long-term lease of the mine
was issued by the Tahasildar, Banspal, on 18.07.2022, and the
tender was open until 4th August 2022. The Petitioner could have
filed the Income Tax Return for the financial year 2021-2022
anytime between April and August 3, 2022, as the tender deadline
was 5 pm on 4th August. There was no need to wait until the
statutory deadline of 31.10.2022. The Petitioner, however,
submitted the Income Tax Return for the financial year 2020-2021
instead and misrepresented it as the return for 2021-2022. The
Hon'ble High Court acknowledged this in paragraph 8 of the
impugned order. Despite this, the Respondent Nos. 1–3, in their
Counter Affidavit, contradicted their own tender advertisement and
the OMMC Rules by supporting the Petitioner and suggesting that
the failure to submit the correct Income Tax Return or the Bank
Guarantee could be excused.
12.5 That in the counter affidavit, the Respondent State claims
that the necessary clarifications and confirmations were obtained
by the Tahasildar before issuing his order on 05.08.2022. However,
this statement contradicts both the facts and the Tahasildar’s own
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order, which clearly shows that no clarifications were obtained
from the relevant department or authority, as indicated by the
Tender Committee’s endorsement. Instead, the Tahasildar relied
on clarifications provided by the Petitioner’s Chartered
Accountant, who could not offer an independent opinion. As a
government officer, the Tahasildar should have sought
clarifications from the appropriate government department rather
than relying on a bidder's representative, which suggests bias in
favor of the Petitioner and against Respondent No. 4.
12.6 The Respondent State filed a Counter Affidavit in W.P.(C) No.
32063 of 2022 on 22.12.2022 but did not mention that the
Tahasildar had made necessary clarifications and confirmations
before issuing the order dated 05.08.2022. Similarly, in another
affidavit filed on 02.05.2023 in reply to the Petitioner's Rejoinder,
no such claim was made. The current assertions by Respondents
No. 1 to 3 about the Tahasildar making necessary clarifications are
unsupported by documentary evidence and were never argued
before the High Court. These statements are misleading,
inconsistent with earlier records, and appear to be an afterthought.
The Hon'ble High Court, in paragraph 10 of the impugned
18
judgment, has thoroughly addressed these issues and given a clear
finding.
13. The Ld. Counsel appearing for the respondent no.1 to 3
submitted as follows:
13.1 That A review of the endorsements made by the committee
shows that clarifications and confirmations were not mandatory.
However, as part of a fair tender process, the Tahasildar confirmed
the details on the same day, 05.08.2022, after verifying the
documents submitted by both bidders. The entire bidding process
was conducted in accordance with the OMMC Rules, 2016, and no
objections were raised by any bidders during the process. As a
result, the Tahasildar was not required to seek further verification
or clarification from any party.
13.2 That the clarification provided by Mr. Ganta Naga
Subrahamanyeswar Rao, Managing Partner of the Petitioner, is
valid, stating that under Section 44AB of the Income Tax Act, 1961,
for partnership firms with a turnover exceeding Rs. 1 crore, the
due date for filing the audited balance sheet and profit & loss
account for the financial year 2021-2022 was 30.09.2022, and the
due date for filing the Income Tax Return was 31.10.2022. As such,
the Income Tax Return for the financial year 2020-2021, submitted
19
by the Petitioner, can be treated as the relevant previous year's
return, satisfying the prerequisite conditions. Additionally, the
Petitioner submitted a valid certificate from the GST jurisdictional
officer, while Respondent No. 4 submitted an invalid photocopy
from the GST portal, which could not be accepted as a valid
certificate.
14. Heard Ld. Counsels appeared on both sides and perused the
relevant documents placed on record.
15. The controversy in these petitions revolves around the
conditions referred to in the tender notice dated 18.07.2022. As
referred to in para 3 the condition no. 5 is in respect of submission
of income tax return of previous financial year or bank guarantee
of 18 months validity. The second condition is furnishing a
certificate/letter from the concerned GST Jurisdictional Officer
stating that the bidder has no GST dues pending.
16. Respondent no. 4 in the present Special Leave Petition
(petitioner before the High Court) vehemently submitted that the
petitioner herein has submitted the income tax return for the
financial year 2020-21 instead of year 2021-2022. Thus, it was
submitted that the petitioner failed to comply with the condition
no. 5. Though at the first blush, this submission may look
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attractive but on perusal of the material, we are unable to accept
this submission.
17. Admittedly, the petitioner had submitted the requisite
documents along with his income tax return. Tahasildar for his
satisfaction had made an enquiry with the managing partner Shri.
G.N. Subrahamanyeswar Rao of M/s. Sri Venkateswara
Constructions. In response to the query made by the Tahasildar,
the representative i.e. the managing partner submitted certificate
of the chartered accountant. It was clarified in the certificate that
the due date of filing of audited balance sheet and profit and loss
th
account for financial year 2021-22 is 30 September, 2022 and
st
the due date of filing of IT return is 31 October, 2022. It was then
submitted that the income tax return for the financial year 2020-
21 may be treated as previous year income tax return. A support
was taken to the provision namely, Section 44 AB of Income Tax
Act, 1961 which state that in case of partnership firm whose
turnover was more than Rs. 1 crore, the due date of filing audited
th
balance sheet and profit & loss account for the year 2021-22 is 30
st
September and the due date of filing ITR is 31 October, 2022. The
requisite amount of income tax return of the assessment year
2021-22 submitted by the petitioner is in consonance with the
21
income tax circular of Government of India and was also in
accordance with the tender requirement. The second condition in
respect of furnishing certificate/letter from the concerned GST
Jurisdictional Officer that no GST dues are pending is also
complied with by the petitioner.
18. Accordingly, the certificate was issued with the statement
that the certificate is not valid in case of any liability arises for the
said period and at the time of scrutiny of details. The Tahasildar
on his satisfaction that the petitioner has complied both the
conditions, he was declared as a successful bidder.
19. Needless to state, that the intention of laying down such
condition is to ascertain and assess the financial capacity and
capability of the bidder. As stated above, the petitioner has
submitted his income-tax returns of the year 2020-21 which shows
that the petitioner has the financial capability to participate in the
bidding process, therefore, the income tax return as submitted by
the petitioner is sufficient to fulfil the purpose of such
condition/requirement of auction notice in assessing the
petitioner’s financial capability.
20. Income Tax Department issued notification providing thereby
extension of the period for filing the income-tax returns to
22
particular category. Admittedly, the petitioner was from that
category and was entitled to avail the benefit of the notification.
Accordingly, the petitioner was entitled to file his returns of
st
financial year 2021-22 till 31 October, 2022 and this fact was
brought to the notice of Tahasildar. Thus, the insistence of
respondent no. 4 for not submitting the income-tax return for the
year 2021-22 was clearly untenable and resultantly the
submission that the petitioner failed to comply with the pre-
requisite condition is unsustainable.
21. In so far as the other condition is concerned the petitioner
has submitted the communication issued by the GST officer
revealing that there are no dues against the successful bidder,
merely because there is a rider attached to it, the same would not
ipso facto, lose the sanctity of the certificate issued by the GST
officer in favour of the petitioner.
22. On the contrary, the respondent no.4 himself failed to comply
this condition and instead of placing before the authority any
certificate issued by the GST officer the respondent no.4 only
placed on record a screenshot of his GST portal reflecting his GST
dues. Such a screenshot could not have been accepted as
compliance of condition of auction notice. Therefore, the
23
respondent no.4 had complied with only one condition and failed
to comply the other pre-requisite in the form of GST certificate.
Thus, considering the material placed on record, we are of the clear
opinion, that the submissions made on behalf of respondent no.4
is not sustainable for the simple reason that the Tahasildar was
satisfied on the aspect that the petitioner had complied with both
the conditions and there was no need for the him to further wait
for some approval and delay the process.
23. Another aspect which is also worth consideration is the bid
quoted by the petitioner was much more than the respondent no.4
and by way of accepting the tender of the petitioner the state ex-
chequer could have been benefitted and there was no reason for
the revenue authorities i.e., the Tahasildar and the Sub-Collector
to turn down the bid of the petitioner. However by accepting the
bid of respondent no.4 there could have been a loss to the public
ex-chequer.
24. Thus, considering all these aspects, we are of the opinion that
the decision of the revenue authorities namely the Tahasildar and
the Sub-Collector were just, and the High Court committed gross
error in allowing the petition.
24
25. Resultantly, the appeals are allowed. The order impugned is
quashed and set aside.
26. Pending application(s), if any, shall stand disposed of.
.................................J.
[BELA M. TRIVEDI]
..................................J.
[PRASANNA B. VARALE]
NEW DELHI;
APRIL 25, 2025.
25
2025 INSC 580
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). ____________OF 2025
(@ Special Leave Petition (C) No(s). 12174 of 2023)
M/S Sri Venkateswara Constructions Appellant(s)……
VERSUS
State of Odisha & Ors. Respondent(s)…….
WITH
CIVIL APPEAL No(s). ____________OF 2025
(@ Special Leave Petition (C) No(s). 18198 of 2023)
J U D G M E N T
PRASANNA B. VARALE, J:-
1. Leave granted.
Signature Not Verified
2. The challenge in the present appeals is to the order dated
Digitally signed by
RAVI ARORA
Date: 2025.04.28
17:39:00 IST
Reason:
18.05.2023 in Writ Petition no. 32063/2022 whereby the High
1
Court of Orissa allowed the petition preferred by the respondent
no.4 herein and has thereby set aside the order/s impugned and
in addition has directed for fresh tender in respect of Karangadihi
Sand Quarry.
3. The factual background is that on 18.07.2022 the Tahasildar,
Banspal (Respondent no. 2 herein) floated an auction notice for
long term lease of Karangadihi Stone Quarry for a period of five
years, i.e., from the financial year 2022-23 to 2026-27. The last
date of submission of bid was fixed to 04.08.2022 and the date of
opening of bid was fixed to 05.08.2022. The auction notice
specified the list of documents to be enclosed by the bidders along
with the bid application. The important documents which are in
question in the present case are:
“5. Income Tax Return of Previous Financial Year in which
the annual income shall not be less than the royalty
mentioned in schedule-1 as per annual Minimum
Guaranteed Quantity (MGQ) of minor minerals and
additional charge offered in the application of the applicant
or Bank Guarantee with 18 months validity which shall not
be less than the royalty mentioned in schedule-1 as per
annual Minimum Guaranteed Quantity (MGQ) of minor
minerals and additional charge offered in the application by
the applicant and the applicant shall furnish details of other
immovable property [Income Tax Return of Previous
Financial Year showing annual income/ Requisite Extent of
Bank Guarantee = Minimum Guaranteed Quantity X
(Offered Additional Charge + Royalty)]
2
7. The bidder shall furnish a certificate/letter from the
concerned GST jurisdictional officer that no GST dues are
pending against such bidders”
4. The tender drop box was opened, on 05.08.2022 at 11.30
A.M., by the selection committee, comprising of Tahasildar,
Banspal, Addl. Tahasildar, Banspal and Revenue Inspector in
presence of applicants or their representatives. Five sealed
envelopes were found to be submitted by Dileswar Behera, Anil
Khirwal, Soumyajit Mohanty, M/s Sri Venkateswar Construction
(petitioner herein) and M/s P.K. Minerals (P) Ltd. (respondent no.4
herein).
5. On scrutiny of the documents, it was found by the Tahsildar
in its order dated 05.08.2022 that bids of Dileswar Behera, Anil
Khirwal, Soumyajit Mohanty were not accompanied with required
documents. It was further found that petitioner herein has quoted
the highest additional charge at rate of Rs. 589/- and the
respondent no.4 herein has quoted the second highest additional
charge at rate of Rs. 221/-. Consequently, the petitioner was
selected and declared as the successful bidder. The reasons given
by the Tahsildar for declaring the petitioner as the successful
3
bidder and for rejecting the bid of respondent no.4 herein are
reproduced below:
“The Serial No.04, M/S P.K Minerals Ltd. MD Soumya Ranjan
Pahi. of Susila Saw Mill Campus, Keonjhar the 2nd highest bidder
have not submitted any letter or certif[cate from the concerned
GST Jurisdictional authority. In the advertisement No.1895
dt18.07.2022 of tender call notice, the bidders were" asked to
furnish a certificate/ letter from concerned GST jurisdictional
officer that no GST dues are pending against such bidders". But
it is found that he has submitted only a photocopy of GST portal
site from internet , which can't be considered as certificate or
letter from the concerned GST jurisdictional Officer. Hence the
case of 2nd highest bidder is not considered.
On the other hand, SL No. 05, M/S Sri Venkateswara
Constructions Managing Partner Ganta Naga
Subrahamanyeswar Rao, Rutisila, District-Keonjhar who quoted
the highest rate of additional charge @ Rs.589/- has submitted
all requisite documents along with the IT return of assessment
year 2021-22, which needs to be clarified in conformity with
tender advertisement. On enquiry M/S Sri Venkateswara
Constructions Managing Partner Ganta Naga
Subrallamanyeswar Rao, Rutislla, District-KeonJhar has
submitted an certificate from Chartered Accounts EVB Reddey
and Associates with Registration No.011050S, where he
has clarified that the due date of filing of audited balance
sheet profit and loss account for financial year 2021-22 is 30th
September, 2022 and the due date of filing of IT return is 31st
October, 2022 and for this aforesaid balance sheet may be
treated as previous year ITR. It is also clarified that U/S 44AB of
IT Act 1961, in case of Partnership firm whose turnover is more
than Rs 1 Crore , the due date of filing audited balance sheet and
profit & loss account for the year 2021-22 is 30th September and
due date of filing ITR is 31st October. Hence the requisite amount
of IT return of Assessment year 2021-22 submitted by M/S Sri
Venkateswara Constructions Managing Partner Ganta Naga
Subrahamanyeswar Rao, Rutisila, District-Keonjhar is in
consonance with the Income Tax circular of Govt of India and also
in accordance with the tender requirement. Besides these M/S Sri
Venkateswara Constructions, Managing Partner Ganta Naga
4
Subrahamanyeswar Rao, Rutisila, District-Keonjhar has also
submitted the certificate/letter from the Office of the Supdt.
Central GST & Central Excise, Jajpur Range, Jajpur Road, that
there is no GST liability against M/S Sri Venkateswara
Constructions Managing Partner Ganta Naga
Subrahamanyeswar Rao, Rutisila, Distnct-Keonjhar bearing GST
IN No.21ABHFS6939AIZD vide C No.CGST-
;21/06/Misc,.GST/JPR-II/2022/1173. In addition to these M/s
Sri Venkateswara Constructions Managing Partner Ganta Naga
Subrahamanyeswar Rao, Rutisila, District-Keonjhar has quoted
highest rate @ Rs.589/-, which is far higher than the rate of 2nd
highest bidder i.e.@ Rs.221/- which will increase the highest
revenue to the Govt. exchequer”
6. Accordingly, an intimation letter dated 10.08.2022 was
issued to the petitioner and subsequently, further process had
commenced such as deposit of the security money along with other
charges under various heads like Royalty, etc.
7. The respondent no.4 herein has challenged the order of
Tahsildar dated 05.08.2022 and preferred an appeal before Sub-
Collector (Respondent no. 3 herein).
8. The Sub-Collector vide its order dated 20.10.2022 dismissed
the appeal filed by the respondent no.4 herein, the reasoning given
for dismissing the appeal is enumerated below:
“After careful verification of documents available in the C/R, it is
found that the return available as per the Act has been submitted
with Tender Notice and the condition of the Annual Turnover and
Net Worth of all partners also fulfilled and satisfied as the entire
audited balance sheet and return for the Assessment year 2021-
5
22 relating to the previous year 2020-21as on the date of auction
that was on 04.08.2022.
The respondent No.1 has not committed any illegality in respect
of acceptance of the Income Tax Return of the respondent No.2
and consequential order is valid.
The second point of challenge before this court is that regarding
the condition as per clause No.5 of the Auction Notice, the
Bidders/participants have to submit their immovable property list
and particulars alongwith the application, whereas the
respondent No.2 has not furnished such particular, hence he is
not eligible for such tender.
In reply, the respondent No.2 submitted that he has disclosed its
income for the last Assessment Year is about Rs.1,81,06,830/-
and under these circumstances the submission of details of
immovable property is not required as per the terms and
conditions for submission of tender.
It is further submitted with reference to the CHECK LIST of
documents submitted by the Respondent NO.2 at Sl. No. 6, it has
been listed as Immovable property (sale deed) is attached. So,
this ground of challenge has not based on material.
The last ground of challenge of the appellant is that the
Respondent No.1 hurriedly completed the process of verification
without verifying the GST certificate submitted by the respondent
No.2. As per the records, the Respondent No.1 is satisfied and
verified the facts that, the no dues certificate has been issued by
the jurisdictional officer of the respondent No.2 and found correct
in respect of dues stands against the firm as on the date of
selection and no other condition is required to be satisfied,
whereas in other hand the appellant has not obtained the GST no
dues certificate from his jurisdictional officer, thus there was no
scope for any verification. The Appellant has not submitted any
more evidence against the documents submitted by the
Respondent No.2 which seems to be invalid as per the conditions
of the tender or otherwise fake or false. Hence, the objection on
this score raised by the Appellant is not sustainable in the eye of
law. ”
6
9. On being aggrieved by the order of Sub-Collector the
respondent no.4 herein filed a Writ Petition before the High Court
of Orissa praying to set aside the order passed by the Sub-Collector
and Tahsildar. The High Court vide the impugned order allowed
the appeal of the respondent no.4 herein and thereby had
quashed the order dated 05.08.2022 passed by the Tahasildar and
order dated 20.10.2022 passed by Sub-Collector, and in addition
had directed for fresh tender. The High Court while allowing the
appeal has observed as under:
“ 7. On the basis of the factual matrix, as delineated above, before
delving into the merits or the case itself, Clause-(iv) of Rule-27(4) of
the Odisha Minor Minerals Concession (Amendment) Rules, 2022,
which is relevant for the just and proper adjudication of the case,
is taken note of:
"R-27/4/(iv). Income tax return of previous financial year showing
annual income far on amount not less than the amount of
additional charge offered and the royalty payable for the minimum
guaranteed quantity for one whole year or bank guarantee valid
for a period of eighteen months for the amount not less than the
amount as above.”
8. As per the provision mentioned above, the bidder has to submit
the income tax return of previous financial year for g an amount
not less than the amount of additional charge offered and the
royalty payable for the minimum guaranteed quantity for one
whole year or bank guarantee for a period of 18 months for the
amount of additional charges offered. As required under Clause-5
of the auction notice, though opposite party no.4 had enclosed a
check list along with bid application and vide sl.no.5 had enlisted
"income tax return of FY 2021-22", but had enclosed the income
tax return for the assessment year 202122 for the financial year
2020-21. As the tender notification was issued on 18.07.2022, the
bidder was required to submit the income tax return for the FY
7
ending 31.03.2022. If the same would be taken into consideration,
the bid application submitted by opposite party no.4 was without
any income tax return of the financial year 2021-22, therefore, the
same should have been rejected. Apart from the same, against
sl.no.8 of the check list, opposite party no.4 had mentioned "GST
no dues certificate", but the certificate enclosed was not a statutory
certificate and, as such, the same was issued before the
submission of income tax return of FY 202122. Furthermore, the
said certificate was issued on the request made by the assessee
and, as such, the same was a conditional one. The GST Authorities
had made it clear that the certificate is not valid in case of any
liability arises for the said period and at the time of scrutiny of
details. Meaning thereby, the authority had reserved the right to
cancel and declare the certificate to be invalid.
9. So far as the petitioner is concerned, it had no clues of Goods
and Service Tax (GST). On 28.07.2022, the petitioner had applied
to the Superintendent, Central Excise (CGST, Keonjhar1 Range for
issue of a "No Dues Certificate" to comply with Clause-7 of the
auction notice. But the CGST Authorities advised the petitioner to
download the information from their website. Accordingly, the
petitioner had downloaded the information from their website,
which contained the information that the petitioner had no
outstanding GST dues. Thereby, the same is in compliance of
Clause-7 of the auction notice. As a consequence thereof, the
petitioner objected to the bid submitted by opposite party no.4, but.
without considering the same, the authorities proceeded with the
decision making process of selection and allotment of the
quarry…….
10. On perusal of the endorsement of the committee, it is made
clear that opposite party no.4 had quoted additional charge at the
rate of Rs.589/-, but, so far as its income tax return for the
assessment year 2021-22 is concerned, a clarification was to be
given by the competent authority in consultation with the
concerned department/authority, and, as regards no dues
certificate obtained from the CGST department, confirmation was
to be made by the concerned authority. Similarly, it was observed
that the petitioner had quoted additional charge of Rs.221/·, but,
however, the no dues certificate obtained from GST portal was
needed to be confirmed from the concerned department/authority,
if necessary, and, thereafter, the tender would be finalized. If such
requirement has to be complied with, pursuant to the observation
8
made on 05.08.2022, without getting such clearance from the
respective departments and getting confirmation from the
respective authority, as was observed, the authority could not
have proceeded with the matter and finalize the tender in favour
of opposite party no.4 on the very same day, i.e., 05.08.2022.
Thereby, the entire decision making process of the tendering
authority is arbitrary, unreasonable and contrary to the provisions
of law. Under these circumstances, this Court, in exercise of the
powers conferred under the judicial review, has got jurisdiction to
interfere with the decision making process of the tendering
authority.
20. A contention was raised that opposite party no.4 had quoted
highest price of Rs.589/as additional charge and the petitioner
had quoted Rs.221/-, therefore, opportunity should have been
given to the petitioner to match with the bid price of opposite party
no.4. But that question does not arise, in view of the fact that the
document, which had been submitted by the petitioner with regard
to no dues certificate from GST authority, is also required to be
verified by the concerned department/ authority, if necessary.
Thereby, this Court is of the considered view that even if the
petitioner is called upon to match the highest price, but its bid will
suffer from deficiency like that of opposite party no.4. Therefore,
the question of calling upon the petitioner to match the highest price
offered by opposite party no.4 may not arise. ”
10. On being aggrieved with the impugned order passed by the
High Court the petitioner herein as well as the respondent no.4
through another SLP (C) no. 18198/2023 has preferred the present
appeals. Both the appeals are being decided by this common
judgement.
9
11. The Ld. counsel for the petitioner submitted as follows:
11.1 That the petitioner submitted the latest available Income Tax
Return as per the law. The auction notice, issued on 18.07.2022,
had a submission deadline of 04.08.2022. According to Section
139(1) and Section 44AB of the Income Tax Act, 1961, the due date
for filing the Income Tax Return for financial year 2021-2022 for a
tax audit subject bidder is 31.10.2022. Since the Petitioner, a
partnership firm with a turnover above Rs. 1,00,00,000/-(Rupees
one crore) was subjected to a tax audit and had not yet filed the
2021-2022 return by the bid submission date, the 2020-2021
return was considered the relevant return. In view of express
provisions of Income Tax Act, 1961 the interpretation adopted by
Respondent Nos. 1-3 is reasonable, ensuring fairness and a level
playing field for all bidders. A strict interpretation of the bid
condition would have been disadvantageous to bidders subject to
a tax audit under the Income Tax Act. It is further submitted that
it is not impossible to determine the financial soundness of a
bidder and eligibility of a bidder under bid condition no. 5 from the
latest available income-tax return filed by the bidder.
10
11.2 That the certificate obtained by the Petitioner from the GST
jurisdictional officer dated July 28, 2022 confirms that, as per the
GST liability register, there was no outstanding GST liability
against the Petitioner as of that date, thereby fulfilling the
requirement under bid condition S. No. 7 of the auction notice. The
disclaimers in the certificate merely state that future liabilities may
arise due to events like scrutiny or audit—a standard and
universally applicable caveat. Such disclaimers do not undermine
the validity or sufficiency of the certificate, which accurately
reflects the Petitioner's compliance status at the time of issuance.
11.3 That confirmations and clarifications from relevant
authorities are not essential preconditions to awarding a tender,
as long as proper verification is conducted. In this case, the
Tahasildar initiated clarifications and verifications on the same day
and recorded his findings. Upon examining the Income Tax Act,
1961, he concluded that for tax-audited entities like the Petitioner,
the due date for filing the 2021–2022 return was October 31, 2022,
making the 2020–2021 return the latest available at the time of
bidding and compliant with condition S. No. 5 of the auction notice.
He also found the 'GST no dues' certificate submitted by the
11
Petitioner to be in order, as it confirmed there were no outstanding
dues thus, meeting the requirement under S. No. 7.
11.4 That there was nothing in the order sheet noting that
Respondent No. 2 was restricted from conducting immediate
verification or the tendering authority prescribed any specific
standard or degree of verification. The fact that respondent no. 2
examined and verified the documents on the same day should not
prejudice the Petitioner, especially since the Petitioner’s bid was
found to be both compliant and the highest by a significant margin.
11.5 That Respondent No. 4 failed to comply with bid condition S.
No. 7 by submitting a self-downloaded printout from the GST
portal instead of an official 'no dues' certificate or letter from the
relevant authority. There was no proof supporting the claim that
CGST authorities advised submitting such a printout, and the
document lacked any official verification or certification. This non-
compliance was acknowledged by Respondent No. 2 in his order,
and the Hon'ble High Court also rejected Respondent No. 4’s
arguments regarding the same in the impugned order. Accordingly,
Respondent No. 2 rightly rejected Respondent No. 4’s bid on this
ground.
12
11.6 That While interpreting Rule 27(4)(iv), it is important to
consider that the provision was amended less than four months
before the auction notice, leaving limited precedent or established
procedural practice for authorities to follow. Therefore, the
approach taken by the tendering authorities (Respondents No. 1–
3) in not adhering strictly to a literal interpretation of the condition,
but instead ensuring a level playing field for all bidders, is
reasonable and cannot be faulted.
11.7 That Tax authorities do not typically issue “no dues
certificates” as part of statutory provisions but may do so upon
request, as in the Petitioner’s case for bid submission. Since no
specific format was prescribed in S. No. 7 of the auction notice, the
Petitioner could not be expected to dictate the format or wording of
the certificate issued by the statutory authority. Therefore, it was
not within the Hon'ble High Court’s purview to impose additional
requirements or mandate a specific certificate format when the
tendering authority itself had not done so.
11.8 That HC should not have quashed the entire tender process
but could have directed the Tahasildar to make appropriate
enquiries with the relevant authorities and pass a reasoned order
based on such enquiries finally settling the tender.
13
11.9 That the Petitioner, currently the highest bidder, has lost its
competitive advantage as its bid amount is now in public. This
order unfairly allows all bidders, including previously unsuccessful
ones like Respondent No. 4, a chance to match or outbid the
Petitioner in the re-tender process. Moreover, the order fails to
consider the Petitioner’s incurred expenses, obtained consents and
licenses, and offers no protection regarding the security deposit,
royalties already paid, or other investments made pursuant to the
original tender award.
11.10 Petitioner has placed reliance on several Supreme Court
decisions emphasizing judicial restraint in interfering with tender-
related decisions made by the employer. In Central Coalfields
Ltd. v. SLLSML (2016) , the Court held that the employer's
determination of essential tender terms must be respected and is
not subject to judicial scrutiny. In G.J. Fernandez v. State of
Karnataka (1990) , it was affirmed that deviations from tender
terms are permissible if they apply equally to all applicants and are
non-objectionable. Similarly, in Tata Cellular v. Union of India
(1994) , the Court clarified that judicial review focuses on the
lawfulness—not the soundness—of administrative decisions, and
such decisions will not be interfered with unless they are arbitrary,
14
irrational, mala fide, or biased. This principle was reiterated in
Jagdish Mandal v. State of Orissa (2007) , where the Court held
that courts should not intervene at the behest of unsuccessful
bidders over mere technical or procedural issues. Accordingly, the
interpretation of condition S. No. 5 is reasonable, ensures equal
treatment of applicants, and does not warrant judicial interference.
12. Per contra, the Ld. Counsel appearing for the respondent no.4
submitted as follows:
12.1 That The income tax return for the previous financial year
was a crucial requirement of the tender and could not be
disregarded. Since the tender was advertised on 18.07.2022, the
required return was for the financial year 2021–2022. However, the
Petitioner submitted the return for the financial year 2020–2021,
corresponding to the previous assessment year. Despite this non-
compliance, the Tahasildar allegedly acted illegally and with mala
fide intent in selecting the Petitioner as the successful bidder.
Additionally, the Petitioner failed to submit a proper ‘no dues’
certificate from the GST jurisdictional officer. The certificate
submitted was conditional, issued upon the Petitioner’s request,
and explicitly stated that it would be invalid if any liability arose
15
during scrutiny, implying that the GST authority had reserved the
right to cancel it.
12.2 That the tender box was opened on 05.08.2022, and a
comparative statement of the bids received under the
advertisement dated 18.07.2022 was prepared. The tender
committee's endorsements clearly indicated that the finalization of
the tender was contingent upon receiving necessary clarifications
regarding the bids of both the Petitioner and Respondent No. 4.
However, without awaiting these clarifications, the Tahasildar
proceeded to declare the Petitioner as the successful bidder on the
same day through an allegedly illegal and mala fide order. The
Hon'ble High Court, in paragraph 10 of the impugned order, noted
this irregularity and the premature action taken by the Tahasildar.
12.3 That Respondent No. 4 applied to the Superintendent, Central
Excise (CGST Authority) for a "No Dues Certificate" as required
under Clause 7 of the tender advertisement dated 18.07.2022.
However, the CGST authorities advised Respondent No. 4 to
download the relevant information from their website. Accordingly,
Respondent No. 4 submitted the downloaded document, which
indicated that there were no pending GST dues. This submission
16
was considered compliant with Clause 7, as the tender scrutiny
committee did not raise any objections regarding it.
12.4 That the advertisement for the long-term lease of the mine
was issued by the Tahasildar, Banspal, on 18.07.2022, and the
tender was open until 4th August 2022. The Petitioner could have
filed the Income Tax Return for the financial year 2021-2022
anytime between April and August 3, 2022, as the tender deadline
was 5 pm on 4th August. There was no need to wait until the
statutory deadline of 31.10.2022. The Petitioner, however,
submitted the Income Tax Return for the financial year 2020-2021
instead and misrepresented it as the return for 2021-2022. The
Hon'ble High Court acknowledged this in paragraph 8 of the
impugned order. Despite this, the Respondent Nos. 1–3, in their
Counter Affidavit, contradicted their own tender advertisement and
the OMMC Rules by supporting the Petitioner and suggesting that
the failure to submit the correct Income Tax Return or the Bank
Guarantee could be excused.
12.5 That in the counter affidavit, the Respondent State claims
that the necessary clarifications and confirmations were obtained
by the Tahasildar before issuing his order on 05.08.2022. However,
this statement contradicts both the facts and the Tahasildar’s own
17
order, which clearly shows that no clarifications were obtained
from the relevant department or authority, as indicated by the
Tender Committee’s endorsement. Instead, the Tahasildar relied
on clarifications provided by the Petitioner’s Chartered
Accountant, who could not offer an independent opinion. As a
government officer, the Tahasildar should have sought
clarifications from the appropriate government department rather
than relying on a bidder's representative, which suggests bias in
favor of the Petitioner and against Respondent No. 4.
12.6 The Respondent State filed a Counter Affidavit in W.P.(C) No.
32063 of 2022 on 22.12.2022 but did not mention that the
Tahasildar had made necessary clarifications and confirmations
before issuing the order dated 05.08.2022. Similarly, in another
affidavit filed on 02.05.2023 in reply to the Petitioner's Rejoinder,
no such claim was made. The current assertions by Respondents
No. 1 to 3 about the Tahasildar making necessary clarifications are
unsupported by documentary evidence and were never argued
before the High Court. These statements are misleading,
inconsistent with earlier records, and appear to be an afterthought.
The Hon'ble High Court, in paragraph 10 of the impugned
18
judgment, has thoroughly addressed these issues and given a clear
finding.
13. The Ld. Counsel appearing for the respondent no.1 to 3
submitted as follows:
13.1 That A review of the endorsements made by the committee
shows that clarifications and confirmations were not mandatory.
However, as part of a fair tender process, the Tahasildar confirmed
the details on the same day, 05.08.2022, after verifying the
documents submitted by both bidders. The entire bidding process
was conducted in accordance with the OMMC Rules, 2016, and no
objections were raised by any bidders during the process. As a
result, the Tahasildar was not required to seek further verification
or clarification from any party.
13.2 That the clarification provided by Mr. Ganta Naga
Subrahamanyeswar Rao, Managing Partner of the Petitioner, is
valid, stating that under Section 44AB of the Income Tax Act, 1961,
for partnership firms with a turnover exceeding Rs. 1 crore, the
due date for filing the audited balance sheet and profit & loss
account for the financial year 2021-2022 was 30.09.2022, and the
due date for filing the Income Tax Return was 31.10.2022. As such,
the Income Tax Return for the financial year 2020-2021, submitted
19
by the Petitioner, can be treated as the relevant previous year's
return, satisfying the prerequisite conditions. Additionally, the
Petitioner submitted a valid certificate from the GST jurisdictional
officer, while Respondent No. 4 submitted an invalid photocopy
from the GST portal, which could not be accepted as a valid
certificate.
14. Heard Ld. Counsels appeared on both sides and perused the
relevant documents placed on record.
15. The controversy in these petitions revolves around the
conditions referred to in the tender notice dated 18.07.2022. As
referred to in para 3 the condition no. 5 is in respect of submission
of income tax return of previous financial year or bank guarantee
of 18 months validity. The second condition is furnishing a
certificate/letter from the concerned GST Jurisdictional Officer
stating that the bidder has no GST dues pending.
16. Respondent no. 4 in the present Special Leave Petition
(petitioner before the High Court) vehemently submitted that the
petitioner herein has submitted the income tax return for the
financial year 2020-21 instead of year 2021-2022. Thus, it was
submitted that the petitioner failed to comply with the condition
no. 5. Though at the first blush, this submission may look
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attractive but on perusal of the material, we are unable to accept
this submission.
17. Admittedly, the petitioner had submitted the requisite
documents along with his income tax return. Tahasildar for his
satisfaction had made an enquiry with the managing partner Shri.
G.N. Subrahamanyeswar Rao of M/s. Sri Venkateswara
Constructions. In response to the query made by the Tahasildar,
the representative i.e. the managing partner submitted certificate
of the chartered accountant. It was clarified in the certificate that
the due date of filing of audited balance sheet and profit and loss
th
account for financial year 2021-22 is 30 September, 2022 and
st
the due date of filing of IT return is 31 October, 2022. It was then
submitted that the income tax return for the financial year 2020-
21 may be treated as previous year income tax return. A support
was taken to the provision namely, Section 44 AB of Income Tax
Act, 1961 which state that in case of partnership firm whose
turnover was more than Rs. 1 crore, the due date of filing audited
th
balance sheet and profit & loss account for the year 2021-22 is 30
st
September and the due date of filing ITR is 31 October, 2022. The
requisite amount of income tax return of the assessment year
2021-22 submitted by the petitioner is in consonance with the
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income tax circular of Government of India and was also in
accordance with the tender requirement. The second condition in
respect of furnishing certificate/letter from the concerned GST
Jurisdictional Officer that no GST dues are pending is also
complied with by the petitioner.
18. Accordingly, the certificate was issued with the statement
that the certificate is not valid in case of any liability arises for the
said period and at the time of scrutiny of details. The Tahasildar
on his satisfaction that the petitioner has complied both the
conditions, he was declared as a successful bidder.
19. Needless to state, that the intention of laying down such
condition is to ascertain and assess the financial capacity and
capability of the bidder. As stated above, the petitioner has
submitted his income-tax returns of the year 2020-21 which shows
that the petitioner has the financial capability to participate in the
bidding process, therefore, the income tax return as submitted by
the petitioner is sufficient to fulfil the purpose of such
condition/requirement of auction notice in assessing the
petitioner’s financial capability.
20. Income Tax Department issued notification providing thereby
extension of the period for filing the income-tax returns to
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particular category. Admittedly, the petitioner was from that
category and was entitled to avail the benefit of the notification.
Accordingly, the petitioner was entitled to file his returns of
st
financial year 2021-22 till 31 October, 2022 and this fact was
brought to the notice of Tahasildar. Thus, the insistence of
respondent no. 4 for not submitting the income-tax return for the
year 2021-22 was clearly untenable and resultantly the
submission that the petitioner failed to comply with the pre-
requisite condition is unsustainable.
21. In so far as the other condition is concerned the petitioner
has submitted the communication issued by the GST officer
revealing that there are no dues against the successful bidder,
merely because there is a rider attached to it, the same would not
ipso facto, lose the sanctity of the certificate issued by the GST
officer in favour of the petitioner.
22. On the contrary, the respondent no.4 himself failed to comply
this condition and instead of placing before the authority any
certificate issued by the GST officer the respondent no.4 only
placed on record a screenshot of his GST portal reflecting his GST
dues. Such a screenshot could not have been accepted as
compliance of condition of auction notice. Therefore, the
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respondent no.4 had complied with only one condition and failed
to comply the other pre-requisite in the form of GST certificate.
Thus, considering the material placed on record, we are of the clear
opinion, that the submissions made on behalf of respondent no.4
is not sustainable for the simple reason that the Tahasildar was
satisfied on the aspect that the petitioner had complied with both
the conditions and there was no need for the him to further wait
for some approval and delay the process.
23. Another aspect which is also worth consideration is the bid
quoted by the petitioner was much more than the respondent no.4
and by way of accepting the tender of the petitioner the state ex-
chequer could have been benefitted and there was no reason for
the revenue authorities i.e., the Tahasildar and the Sub-Collector
to turn down the bid of the petitioner. However by accepting the
bid of respondent no.4 there could have been a loss to the public
ex-chequer.
24. Thus, considering all these aspects, we are of the opinion that
the decision of the revenue authorities namely the Tahasildar and
the Sub-Collector were just, and the High Court committed gross
error in allowing the petition.
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25. Resultantly, the appeals are allowed. The order impugned is
quashed and set aside.
26. Pending application(s), if any, shall stand disposed of.
.................................J.
[BELA M. TRIVEDI]
..................................J.
[PRASANNA B. VARALE]
NEW DELHI;
APRIL 25, 2025.
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