Sms Limited, Thr. Authorised ... vs The Western Coalfields Ltd. Thr. Its ...
2025 Latest Caselaw 6559 Bom

Bombay High Court

Sms Limited, Thr. Authorised ... vs The Western Coalfields Ltd. Thr. Its ... on 7 October, 2025

Author: Anil S. Kilor

Bench: Anil S. Kilor

2025:BHC-NAG:10351-DB




                                                   1                                         wp2115.2025..docx


                               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                        NAGPUR BENCH AT NAGPUR

                                         WRIT PETITION NO. 2115 OF 2025

                1. SMS Limited,
                a Company duly incorporated and
                registered under the companies Act,
                1956/2013 having its registered
                and corporate office at I.T. Park,
                20 S.T.P.I. Gayatri Nagar, Parsodi,
                Nagpur 440 022 through its
                authorised representative,
                Mr. Ujjwal s/o Mithlesh Kumar Garg,
                Aged about 29 years,
                Deputy Manager (Coal Mining),
                R/o. Plot No. 92,
                Lokhande Nagar,
                Nagpur 440022.

                2. Mr. Nirbhay S/o Ajay Sancheti,
                Aged about 35 yrs, occ. Business,
                R/o 273 'Sakar', Shivaji Nagar,
                Nagpur 440 010                                                           ......PETITIONERS

                               ...V E R S U S...

                1. The Western Coalfields Limited
                through its Chairman cum Managing Director,
                Coal Estate, Civil Lines,
                Nagpur 440 001

                2. The General Manager (CMC),
                Western Coal Fields Limited,
                Coal Estate, Civil Lines, Nagpur 440 001                                  .....RESPONDENTS
                ----------------------------------------------------------------------------------------------------
                Mr. M.G. Bhangde, Senior Advocate a/b Mr. Adarsh Baheti, Advocate for
                the petitioners.
                Mr. Anand Jaiswal, Senior Advocate a/b Mr. Nachiket Moharir, Advocate
                for respondents.


                Belkhede, PS
                               2                              wp2115.2025..docx


CORAM:- ANIL S. KILOR, &
        RAJNISH R. VYAS, JJ.

RESERVED ON               : 08.09.2025
PRONOUNCED ON             : 07.10.2025

JUDGMENT (PER : Rajnish R. Vyas)

Heard.

2. Rule. Rule made returnable forthwith. Heard finally by

consent of the parties.

3. Heard Mr. M.G. Bhangde, learned Senior Advocate a/b Mr.

Adarsh Baheti, Advocate for the petitioners and Mr. Anand Jaiswal,

learned Senior Advocate a/b Mr. Nachiket Moharir, Advocate for

respondents. Matter was closed for orders on 8 th of September 2025. On

16th September 2025, petitioner filed written note on the pursis by the

respondents, pointing out certain decisions of Honourable Apex Court.

According to Mr Bhangde, learned Senior Counsel for the applicant, the

terms and conditions of the tender documents are crystal clear which

shows that the tender was excluding GST. He has invited our attention to

various terms and conditions and argued the matter at length.

It is contended by the petitioner that in response to the notice

inviting tender, in all 5 bidders submitted their bids including him and

after technical evaluation, price bid was opened. He was declared as L-1

Belkhede, PS 3 wp2115.2025..docx

and accordingly, vide letter dated 25.3.2025, he requested respondent

No. 2 to issue letter of acceptance. On 28-3-2025, discussion of

representative of petitioner with respondent No. 2's officer took place in

which respondent took a stand that tender conditions require the bidder

to quote price including GST. The petitioner accordingly, addressed a

letter and email dated 01-04-2025 to respondent No. 2 and requested

that if there is any dispute, same be referred to independent external

monitors for adjudication.

On 04-04-2025, reply was given to the petitioner in which it

was stated by the respondent No. 2 that in view of clarification received

from GeM, the petitioner has been declared as L-1 bidder on its quoted

price which is inclusive of GST. On the same date, respondent No. 2

issued letter of acceptance in favour of the petitioner by treating price

quoted as inclusive of GST and petitioner was further called upon to

furnish performance security within 21 days of letter of acceptance.

Again, on the same date, Area General Manager, Kanhan Area, WCL,

called upon petitioner No.1 to deposit performance security in the form

of bank guarantee. This prompted petitioner to again address

communication on 07-04-2025 to independent external monitor with a

request to intervene in the matter, but in vain. On 10-04-2025, the

Belkhede, PS 4 wp2115.2025..docx

petitioner received a letter from Area General Manager, Kanhan Area,

WCL calling upon petitioner No.1 to submit bank guarantee. He thus,

submits that the action on the part of respondent is arbitrary.

4. Per contra, Mr. Anand Jaiswal, learned Senior Advocate a/b

Mr. Nachiket Moharir, for respondents argued that petition cannot be

entertained by this Court considering the fact that there is valid

agreement between the parties and recourse can be taken to the

arbitration proceedings. He further stated that dispute with respect to

interpretation of terms and conditions of the contract between the parties

will not be permissible in the writ jurisdiction.

5. He argued that as per tender document, it was made amply

clear that the bidders were required to quote rates and amount at two

different places, firstly in exel format as enclosed with the NIT (Notice

Inviting Tender) as per clause 1.8(G) of buyer added ATC and secondly,

in GeM portal as per clause 6 of GeM General Terms and Conditions. As

per said clauses, it would be clear that bidders was to quote rates in exel

format "excluding GST, while submitting BOQ. However, the rate to be

quoted in the GeM portal was to be inclusive of GST. This is clear from

the GeM portal itself and as stated in clause 8 of GeM General Terms and

conditions. According to him, the petitioner entered same values in both

Belkhede, PS 5 wp2115.2025..docx

the places i.e. rate Rs. 1215 per tonne excluding GST. It was pointed out

that GeM portal is completely automated and no once interference is

possible in the same. He further stated that when petitioner sought

clarification vide letter dated 1.4.2025, the respondent took advise from

GeM authorities and informed the petitioner that the price quoted was

inclusive of GST. He also relied upon to clause 1.8(G) of the ATC. The

bidders were expected to upload the price bid containing the bill of

quantities in exel format wherein the bidder was expected to quote the

rate in rupees per tone of coal production on this exel file. From the

aforesaid clause, it is clear that rates quoted were to be inclusive of all

taxes, duties and levies but excluding GST.

6. He further contended that after quoting the rate of per tonne

of coal production in the bill of quantities, the bidder was expected to

upload the same on GeM portal. However, clause 8 of GeM Terms and

Conditions which will stipulates that offer prices on GeM portal shall be

on inclusive basis i.e. including of taxes, duties, local levies,

transportation, loading and unloading charges etc. It was therefore,

imperative for the bidder to quote offer prices including of taxes

(inclusive of GST and other taxes, if any). The petitioner having quoted

price of Rs.1215 per tonne in GeM portal as well, the said rate was

Belkhede, PS 6 wp2115.2025..docx

rightly considered as including GST by the answering respondent.

7. According to Mr. Jaiswal, learned Senior Counsel, there is

absolutely no confusion as to whether the prices quoted is excluding GST

or including GST and had there been any confusion, the petitioner could

have taken recourse to clause 1.5 of GTC and sought clarification from

the department. The petitioner was aware that the price was including

GST and therefore, he did not take any recourse to the aforesaid clause.

8. Rejoinder was filed by petitioners in which they have

categorically stated that subsequently, respondents have floated tender

notice no.3/2025-36 for different work and ATC therein require that

bidder should quote rate inclusive of GST and GST Compensation Cess.

The tender pertains to winning coal without blasting from district Tawa:

II Underground mine, at Pathakhera area of WCL. He by inviting our

attention to the said tender notice (page 357) contended that

respondents have realized their error and have now corrected it fresh

tender process.

9. The additional affidavit was filed by the respondents wherein

they canvassed that other participating bidders have duly stated the rates

on GEM portal including GST and therefore, the petitioner cannot take

Belkhede, PS 7 wp2115.2025..docx

the plea that petitioner was not known to the fact that petitioner was

supposed to quote rate excluding GST on GeM portal. A rejoinder was

then also filed by the petitioners wherein they have stated that in fact,

the stand taken by the respondents regarding inexclusivability is

incorrect and the price quoted is exclusive of GST document.

10. In the aforesaid background it can be seen that the petition

involves very short question as to whether tender floated and the other

documents mandates the bidder to pay Goods and Service Tax ("GST")

amount excluding the price quoted or including the price submitted?

We have gone through the documents including the Additional Terms

and Conditions ("ATC), General Terms and Conditions ("GTC") and

notice inviting tender.

11. Respondent Nos. 1 and 2, have floated a tender bearing E-

Tender Notice 2/2024-25 for the work of "winning coal without blasting

from combined seam section on 29.4.2024, on GeM portal (Government

E-Marketplace). In all five bidders submitted their bids and after

technical evaluation, financial bids were opened in which the petitioner

was declared as "L1" bidder, he having quoted total price of

Rs. 5,32,17,00000/-.

Belkhede, PS 8 wp2115.2025..docx

12. The dispute arose out of the said amount as according to the

petitioners, the price quoted was excluding GST whereas as per

respondents, it was otherwise. In this background, it is necessary to

consider clause 5 of General Terms and Conditions on GeM 4.0 (version

1.15) which reads as under:

"5. Contract(s):

Following documents shall be construed to be part of the Contract generated through GeM:

i. Scope of supply including price as enumerated in the Contract Document.

ii) General Terms and Conditions (GTC)

iii) Product/Service specific Special Terms and Conditions (STC).

iv. Product/Track/Domain Specific STC of Particular Service including its SLA (Service Level Agreement) v. Bid /RA specific Additional Terms and Conditions (ATC).

The terms and Conditions stipulated in STC & SLA will supersede those in GTC and Terms and conditions stipulated in ATC will supersede those in GTC and STC in case of any conflicting provisions."

Thus, the documents filed by the respective parties will have

to be interpreted as stated above.

13. The said Service Level Document (SLA) can be downloaded

from GeM portal. Bid document, more particularly, the last paragraph of

page 28, is reproduced below:

Belkhede, PS 9 wp2115.2025..docx

"The Bid is governed by the General Terms and Conditions conditions stipulated in Bid and Service Level Agreement specific to this Service as provided in the Marketplace.

However, in case if any condition specified in General Terms and Conditions is contradicted by the conditions stipulated in Service Level Agreement, then it will over ride the conditions in the General Terms and Conditions."

14. Additional Terms and Conditions (buyer added ATC) is also

relied upon by the petitioner including point 1.1 which gives a chart

mentioning opportunity of job, quantity, time of completion and total

value. The last column of "total value" if seen would show that the rate

which is required to be quoted was excluding GST. The last column is

produced as under:

Total value (Rs) (excluding GST) Rs. 4,25,53,01,400/-

@ Rs. 971.53/Te

If the table reproduced at page 30 of the petition is perused, it

would reveal that note is appended to it which says "the total value of

work is inclusive of all applicable taxes and levies excluding GST. At the

bottom of the chart, bifurcations has been made to show total value of

the work excluding GST and including GST. The valuations are as under:

Total Value of the work excluding GST: Rs. 4,25,53,01,400/- Add GST @ 18% on total value: Rs. 76,59,54,252/- Total value of the work including GST : Rs. 5,02,12,55,652/-

Belkhede, PS 10 wp2115.2025..docx

15. It is thus, clear that tender notice shows that GST is required

to be excluded from the bid submitted. Not only this, clause 1.8(G)

further shows that the rates quoted by the bidder shall be inclusive of all

taxes, duties and levy but excluding GST and GST Compensation Cess, if

applicable. The said clause further shows that the item rate (Rupees per

tonne of coal production) quoted by bidder shall be inclusive of all taxes,

duties and levies but excluding GST and GST Compensation Cess, if

applicable. The payment of GST and GST Compensation Cess by service

availer ( i.e. CII - subsidiary) to bidder/contractor (if GST payable by

bidder/contractor) would be made only on the later submitting a

bill/invoice in accordance with the provisions of relevant GST and the

rules made thereunder and after online filing valied return on GST

portal. Payment of GST and GST Compensation Cess is responsibility of

bidder/contractor. The last two paragraphs of clause 1.8(G) reads thus.

"GST @ 17% for total value of work will be added to L-1 members".

(Rate Rupees per tonne on coal production) quoted shall be exclusive of GST).

Various terms and conditions also favours the case of

petitioner and clause 2.11.1, relevant portion of which is at page 68, is

reproduced below also comes to his rescue.

Belkhede, PS 11 wp2115.2025..docx

"All duties, taxes (excluding Goods and service tax (GST) and GST compensation cess (if applicable) only) and other levies payable.

Cost of scientific study"

16. In this scenario, had financial bid submitted by the petitioner

been not found suitable, it could have been rejected by the respondents

invoking clause 2.22.2 which says, "if a bid is not substantially

responsive, it may be rejected by the employer at its sole discretion".

Clause 2.22 and 2.22.1 defines a substantially responsive bid is one

which confirms to all the terms and conditions and specifications of the

bid document without material deviation or reservation. A material

deviation or reservation is one:

a) which affects in any substantial way the scope, quality or performance of the works.

b) which limits in any substantial way, inconsistent with the Bidding documents, the Employer's rights or the Bidder's obligations under the contract; or

c) whose rectification would affect unfairly the competitive position of other Bidders representing substantially responsive Bids.

Thus, respondents having found petitioner L1, now cannot say that

the price quoted was inclusive of GST. Clause 2.23.5, is reproduced below:

"Bid evaluation shall be done after taking into consideration overall quoted price by the Bidder and effect of Goods and Service Tax (GST), GST Compensation Cess

Belkhede, PS

12 wp2115.2025..docx

etc as applicable. L1 will be decided on the basis of Cost of Company."

That the respondents could have very well rejected the

financial bid of the petitioner by invoking the said clause also.

17. It is necessary to mention here that principle of cost to

company in contractual parlance/tender evaluation mean that while

evaluating bids, the authority must look at total financial burden on the

employer and not merely the quoted base price. Thus, it can be said that

the aforesaid factor was taken into consideration and thereafter the

petitioner was declared as L1.

18. The contention of Mr Jaiswal that since there is arbitration

clause, this court may not interfere cannot be accepted since as on the

date there is no concluded contract between the parties. It is further

necessary to mention here that integrity of tender process is required to

be maintained. Various clauses pointed out by Mr Jaiswal, cannot lead to

the conclusion that the tender was inclusive of GST. The question

regarding applicability of GST will have to be considered in the light of

the aforesaid background. In catena of cases, Honourable Apex Court

has observed that before interfering in a contract matter, in exercise of

powers of judicial review, court should pose to itself following questions:

Belkhede, PS 13 wp2115.2025..docx

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"? And

(ii) Whether the public interest is affected?

19. The arbitrariness is defined by the Hon'ble Apex Court in case

of M.P. Power Management Co Ltd, Jabalpur Vs. Sky Power Southeast

Solar India Private Ltd and Ors, reported in 2023(2) SCC 703, in

following manner:

"An order or decision would be arbitrary under the following

circumstances:

i) if it is not based on any principle;

ii) if it shows shows caprice without any reasonable rational

iii) if it is actually without any good faith;

iv) if there is total non-application of mind without due regard to the rights of parties and public interest and

v) if it is wholly unreasonable which is little different from perverse decision under the Wednesbury doctrine.

Considering aforesaid guiding principles, it can be said that

the respondent authorities are acting in arbitrary manner by treating the

price quoted inclusive of GST. Respondent authorities have issued one

more tender notice regarding similar work in which they have

Belkhede, PS 14 wp2115.2025..docx

specifically stated in the tender documents that the price be would be

include of GST, which fact has been brought to the notice of this court by

way of documents filed on the record.

20. We have also gone through Pursis dated 8- 9-2025 filed by

the counsel for respondent and various judgments filed along with it. We

have also perused written notes on the Pursis filed by the respondents, by

the petitioner dated 16.9. 2025. We would like to state that none of the

judgments cited deals with the issue regarding inclusivity and exclusivity

of GST amount. The principles of law laid down in the aforesaid

judgments cannot be disputed, but the facts of the cases are totally

different. Suffice it to say that there is absolutely no dispute regarding

interpretation of contract. The conditions are crystal clear that price

quoted was exclusive of GST.

21. In that view of the matter, we are inclined to allow the

petition. Accordingly, petition is allowed in terms of prayer clause A,

and C.

(RAJNISH R. VYAS, J.) (ANIL S. KILOR, J.)

Belkhede, PS 15 wp2115.2025..docx

At this stage, learned counsel for respondent Nos. 1 and 2

requests for stay for a period of four weeks. Learned counsel for the

petitioner opposed the request made by learned counsel for respondent

Nos. 1 and 2.

Considering the fact that the only issue involved in the

present petition is whether the amount demanded by the respondents

was including GST or not and that who pays the GST amount, we are not

inclined to allow the request of respondent Nos. 1 and 2. Accordingly,

prayer for stay to the judgment and order is rejected.

               (RAJNISH R. VYAS, J.)                 (ANIL S. KILOR, J.)




Belkhede, PS