3 Reliance is placed on 'Afcon Infrastructure Ltd. vs Nagpur Metro Rail Corporation Ltd. & Anr.'
2016 (16) SCC 818.
5. Mr. Chetan Lokur, learned counsel for the Respondent No. 3 submits
that Notification of Award ['NOA'] was issued in favour of Respondent No.
1 vide notification dated 21.11.2025.
5.1 He submits that pursuant to NOA, Respondent No. 3 has furnished a
Performance Bond/Insurance Security Bond of the value of Rs. 19.76 crore
to Respondent No. 1 and for the issuance of this bond, an amount of Rs. 1.68
crore was paid by Respondent No. 3. He submits that additionally,
Respondent No. 3 has progressed substantial amount of on-site and off-site
operational works and as such significantly taken steps towards execution of
the tender project.
5.2 He submits that Clause 10.5.1 of ITB makes it mandatory for every
bidder to have a valid GST registration certificate; Clause 4(j) clearly
stipulated that any offer made without a valid GST registration certificate is
liable to be automatically rejected, without exception; Clause 6.8.1 of the
Manual for Procurement of Goods requires every bidder to be registered
under GST legislation and to furnish the GST registration certificate in their
offer unless they are specifically exempted. He submits that the
interpretation of the Petitioner of Clause 10.5.2 of ITB is misplaced as the
first paragraph itself applies only to situations where the Contract Executing
Office is different from bidding office of the bidder, and it is only in such
cases that the bidder may submit the GST details of the Contract Executing
Office pursuant to being declared as the successful bidder.
5.3 He submits that the Petitioner had delayed, without explanation, to
file its application for GST Registration. He submits that the Tender
Document was released on 06.03.2025 whereas the application for GST
Registration was filed by the Petitioner as late as on 03.06.2025, i.e., nearly
three months after the tender document was published and no reasons have
been provided by the Petitioner for its delay in filing its delay in filing its
application for registration.
Findings and Analysis
6. This Court has heard the learned counsel for the parties and has
perused the relevant tender clauses and the annexures filed on record.
7. The tender clauses which are relevant for determining the dispute are
as under: -
ITB Clauses- :
"The bidder will have to bear all Income Tax liability both corporate and personal
tax
10.5 GST Liability on Supply of Services:
10.5.1 In accordance with the notification no.10/2017 Integrated Tax (rate) dated
28.06.2017 (as may be amended) issued under GST legislations, the liability to
pay 100% GST is on ONGC. Hence, the Bidder shall not include GST in their
quoted prices for the Services falling in the above notification.
The Bidder should quote the applicable GST, clearly indicating the rate and the
amount of GST included in the bid and the description of the respective service
(as per GST rules) under which the GST is payable.
In the contracts involving multiple services or involving supply of certain goods
or materials (which should be consumable in nature forming part of taxable
service) along with the services, the Bidder should give separate break-up for cost
of goods and cost of various services, and quote GST as applicable for the taxable
services and/or goods).
In case the GST is not quoted explicitly in the offer by the Bidder, the offer will
be considered as inclusive of all liabilities of GET and ONGC will not entertain
any future claim in respect of GST against such offers.
In case, the quoted information related to various taxes and duties subsequently
proves wrong, incorrect or misleading:-
a) Payment towards GST shall be restricted to the GST amount as charged on
the Tax-Invoice' or the quoted GST rate, whichever is lower unless the same
is due to applicability of change in law clause. ONGC shall have no liability
to reimburse the difference in the duty/tax, if the finally assessed amount is
on the higher side.
b) ONGC will have the right to recover the difference in case the rate of
duty/tax finally assessed is on the lower side.
(i) (Applicable for Indigenous tenders):
The Service Provider should have a valid GST registration certificate under
GST legislation and a copy of such registration certificate should be
submitted along with the offer.
Service to be provided from outside the taxable territory of India:
As per GST rules, for Services received by ONGC in Taxable Territory of India
from a Service Provider from outside the taxable territory of India, who is not
required to be Registered under GST Law, the liability to pay GST lies with
ONGC. Therefore, such Bidder shall not include GST in the quoted prices, but
shall submit a declaration to the effect that they are not required to take GST
Registration in the State of Supply as per GST Provisions. However, at the time
of evaluation, GST as applicable shall be loaded on the portion of services which
attract GST.
In case the Bidder does not give break-up of the quoted prices, indicating the
components of taxable services and/or goods separately, the GST will be loaded
on entire quoted/Contract value for evaluation considering higher rates, if any, as
per the provisions of the statute.
10.5.2 In case Contract executing office(s) based on the tender scope of work are
different from bidding office of bidder, the bidder shall also provide details of
Contract executing office(s) based on the tender scope of work in their bid duly
indicating/providing their respective ONGC Vendor Code (if already available).
In case ONGC vendor code is not available for such contract executing location
of bidder, GSTIN and Bank account details etc. shall also be submitted by bidders
in their bid for creation of vendor code for such office.
If bidder indicates that details like GSTIV and Bank account details etc. of the
office identified by bidder in their bid for executing work, would be provided
only after they emerge as successful bidder, they shall provide the same at least
15 days before submission of first invoice, Such bidder shall provide an
undertaking to this effect.
......."
[Emphasis Supplied]
BEC Clauses- :
"4.0 Offers of following kinds will be rejected:
........
(j) Offers not accompanied with a copy of valid registration certificate under GST
Legislation of India.
(k) Offers not accompanied with an undertaking to provide all the necessary
compliances/Invoice/documents required under GST legislation for enabling
ONGC to avail Input tax (GST) credit."
[Emphasis Supplied]
8. The issue which has arisen for consideration in this petition is whether
an ARN issued under Rule 8(5) of CGST Rules can be considered as a
temporary GST registration OR equivalent to regular GST registration
certificate, till regular GST certificate is issued to the bidder.
9. At the outset, we observe that Clause 10.5.1 of the ITB unequivocally
stipulates that the bidder "should have a valid GST registration
certificate....and a copy of such registration certificate should be submitted
along with the offer". The language employed is clear, mandatory, and has
no ambiguity. This requirement is further reinforced by Clause 4(j) of BEC,
which expressly provides that offers not accompanied by a valid GST
registration certificate are liable to be rejected. The conjoint reading of these
provisions leaves no manner of doubt that possession and submission of a
valid GST registration certificate at the bid stage is stipulated as an essential
pre-condition to eligibility.
10. Respondent No. 1 has contended that Clause 8.3 of ITB at Annexure-
II of the Tender Document unequivocally mandates the contractor to bear all
tax liabilities, including GST, and to furnish all requisite compliances,
invoices, and documents to enable the Respondent to avail input tax credit
['ITC']. It is contended that under Section 22 of the CGST Act, 2017 ['Act
of 2017'], every supplier is liable to obtain GST registration, and in terms of
Section 31 of the Act of 2017, only a registered person is legally competent
to issue a valid tax invoice and since the successful bidder is a supplier
under the contract, it is mandatory for bidder to have GST registration in
accordance with Section 25 of the Act of 2017, which is granted under Rule
9 of the CGST Rules upon approval of the application filed under Rule 8(4),
failing which the Petitioner cannot issue tax invoices necessary for availing
ITC.
11. The Petitioner has fairly not disputed that having a GST registration
as per Clause 10.5.1 is an essential condition of the tender. However, it has
sought to contend that since the Petitioner held ARN as on 19.06.2025 (the
bid submission date) and the GST number was allotted on 23.06.2025 (prior
to evaluation of the bids) the Respondent No.1 ought to have taken into
consideration the post facto grant of GST registration and not insisted on a
strict compliance of Clause 10.5.1 of ITB. It has relied upon a letter issued
by Assistant Commissioner, Agapura circle, Hyderabad to contend that the
ARN can be validly relied upon by a bidder in tender processes as a proof of
GST registration.
12. The Petitioner's contention that submission of an ARN as on
19.06.2025, coupled with a subsequent grant of GST registration on
23.06.2025, amounts to substantial compliance and therefore its bid has been
wrongly rejected by Respondent No.1, cannot be accepted by this Court.
The distinction between an ARN and a GST Registration Certificate is not
merely procedural but substantive in nature. An ARN is only an
acknowledgment of a pending application under Rule 8(5) of the CGST
Rules, whereas a GSTIN is granted only upon due verification and approval
under Rules 9 and 10 of the CGST Rules. Therefore, an ARN cannot, in law,
be equated with a valid registration certificate.
We note that Respondent No. 1 as well did not outrightly reject the
bid of the Petitioner and sought an opinion from the Corporate Finance
Department, Delhi to understand the legal effect of the grant of ARN vis -à-
vis GST registration number, the said opinion dated 21.07.2025, though
advisory, lends support to the Respondent's understanding of the statutory
framework and reinforced the position that the Petitioner did not meet the
eligibility requirement on the bid submission date. It is thereafter that
Respondent No. 1 rejected the bid on 29.07.2025. The relevant part of the
opinion of Corporate Finance Department, Delhi dated 21.07.2025 read as
under: -
"In this context, it is clarified that, as per GST law, the ARN is merely an
acknowledgment of receipt of the application for GST registration in terms
of Rule-8(5) of CGST Rules, 2017 (FORM GST REG-02). It is a system-
generated number issued at the time of submission of the application and is
used mainly to track the status of the registration request. The GST
Registration Number (i.e. GSTIN), which is a 15-digit alphanumeric code,
is allotted only after due verification of the application and supporting
documents by the concerned GST authorities in terms of Rule -9 of CGST
Rules, 2017. Post such approval/deemed approval, a certificate of
registration is issued in FORM GST REG-06 in terms of Rule-10(1) of
CGST Rules, 2017.
In view of the above, from GST Law perspective, the submission of an
ARN cannot be considered equivalent to holding a valid GST Registration
Certificate. However, while the tender conditions constitute contractual
terms between the parties, considering the commercial aspects involved,
the matter may be examined at unit level in the context of the specific
tender conditions......."
In our considered opinion the stand taken by Respondent No. 1 that
ARN is neither a temporary GST registration nor equivalent to regular GST
registration is in conformity with the CGST Rules. The issue framed at
paragraph no. 08 is answered accordingly.
We find no legal basis for the opinion expressed by the Assistant
Commissioner, Agapura circle, Hyderabad in his letter dated 14.07.2025.
13. The Division Bench of this Court, in similar facts, by its judgement in
W.P. (C) 1072/2025 titled as 'MDC Pharmaceuticals Private Limited v.
Employee State Insurance Corporation'4, held that decision of tendering
authority to not accept ARN as a substitute for GST was valid and held as
under: -
"13. Apart from the aforesaid, though the Petitioner Company appears to
have applied for a new GST registration certificate, purportedly
acknowledged on 04.07.2024, by the Gujarat Commercial Tax Department,
it was only issued a Temporary Reference Number and not a Temporary or
a Provisional Registration Certificate in its name as the learned counsel for
the Petitioner Company would have us believe. It is apparent that the
Temporary Reference Number is only in the context of the application
4 2025: DHC: 797 - DB
submitted for GST registration and not the registration certificate itself. In
that view of the matter the reference to application for new registration for
GST certificate is irrelevant. Thus, we find that, prima facie, on the
aforesaid two grounds the Petitioner Company appears to have not fulfilled
the essential condition under clause 8 of the e -Tender Enquires, as on the
closing date of bid submission.
16. We have also perused the registration certificate dated 20.08.2024
issued in the name of the Petitioner Company which clearly indicates that
the same is w.e.f. 20.08.2024 and thus establishing, prima facie, that as on
the closing date of submission of the bids, the Petitioner Company did not
have in its possession a valid GST registration certificate.
17. So far as the submission of the learned counsel for the Petitioner
Company regarding violation of the principles of natural justice is
concerned, since the Petitioner Company did not fulfil the essential
eligibility condition as on the closing date of the bid submission held
above, we do not find it apposite to traverse the said submission in the facts
of the case."
14. In the present case as well, it is an admitted position on record that the
Petitioner did not possess a valid GST registration certificate as on the bid
submission date i.e., 19.06.2025, and the GST registration certificate was
granted to the Petitioner only subsequently on 23.06.2025. Thus, it is
evident that the Petitioner failed to satisfy an essential eligibility condition
as on the crucial date of submission of bids. The subsequent grant of
registration cannot relate back to cure the initial ineligibility, nor can it be
relied upon to validate a non-compliant bid. Consequently, the Petitioner's
reliance on post-bid compliance or alleged procedural relaxation is
misplaced and does not merit acceptance.
15. There were four entities which submitted bids and there is no dispute
that compliance of this condition of GST registration has been applied to
each of the said entities and no relaxation has been granted to any of the
bidders.
We note that in its communication dated 17.07.2025, Respondent No.
1 has observed that it has similarly rejected bids of another bidder in another
tender where the bidder did not have a GST registration. It is thus apparent
that Respondent No. 1 has been consistently insisting on a strict compliance
of this essential condition.
16. Respondent No. 1 has explained in detail that for performance of the
contract the successful bidder would necessarily have to possess a GST
certificate and this is expressed in the Tender Document. In this backdrop,
the Petitioner's reliance on the ARN as a valid substitute for a GST
registration certificate is misconceived, as an ARN merely evidences a
pending application which is subject to scrutiny and may ultimately be
accepted or rejected by the competent authority. It does not confer any legal
status of registration for purposes of GST nor entitle the applicant to issue
valid tax invoices under the Act. Therefore, in the context of the present
tender, where compliance with GST provisions and the ability to facilitate
ITC are integral part to the contractual work, this Court finds that the
condition of possession of a valid GST registration certificate prior to
submission of the bid is a mandatory and essential condition. The absence of
such registration at the relevant time renders the Petitioner ineligible, and
refusal of Respondent No. 1 to permit such deficiency to be cured by a
subsequent grant of registration cannot be said to be unfair or arbitrary.
17. The Supreme Court in Central Coalfields Ltd. and Anr. V. SLL-
SML (Joint venture consortium) and Ors. 5 in similar facts, where the
High Court had permitted a bidder to make good a deficiency in the
furnishing of the EMD, set aside the said judgment and held that the
decision of the tendering authority to not permit post bid submission
compliance of essential conditions ought not to be interfered while
entertaining the judicial review of tender process. The relevant paragraphs of
the judgment read as under:
41. In appeal, this Court in Poddar Steel [Poddar Steel Corpn. v. Ganesh
Engg. Works, (1991) 3 SCC 273] accepted the theory of essential and non -
essential or ancillary or subsidiary terms of an NIT. It was held that the
cheque of Union Bank of India issued by Poddar Steel (though a deviation
from the terms of NIT) was sufficient for meeting the conditions of NIT,
the condition being ancillary or subsidiary to the main object to be achieved
by the condition and that the employer could waive the "technical literal
compliance" of the earnest money clause of NIT "specially when it was in
its interest not to reject the said bid which was the highest". In other words,
this Court concluded that an essential term of the tender document could
not be deviated from but an ancillary or subsidiary or non -essential term
could be deviated from, and that the deviation could be without any
reference to potential bidders.
42. Unfortunately, this Court in Poddar Steel [Poddar Steel
Corpn. v. Ganesh Engg. Works, (1991) 3 SCC 273] did not at all advert to
the privilege-of-participation principle laid down in Ramana Dayaram
Shetty [Ramana Dayaram Shetty v. International Airport Authority of India,
(1979) 3 SCC 489] and accepted in G.J. Fernandez [G.J.
Fernandez v. State of Karnataka, (1990) 2 SCC 488]. In other words, this
Court did not consider whether, as a result of the deviation, others could
also have become eligible to participate in the bidding process. This
principle was ignored in Poddar Steel [Poddar Steel Corpn. v. Ganesh
Engg. Works, (1991) 3 SCC 273].
5 AIR 2016 SC 3814
43. Continuing in the vein of accepting the inherent authority of an
employer to deviate from the terms and conditions of an NIT, and
reintroducing the privilege-of-participation principle and the level playing
field concept, this Court laid emphasis on the decision -making process,
particularly in respect of a commercial contract. One of the more significant
cases on the subject is the three-Judge decision in Tata Cellular v. Union of
India [Tata Cellular v. Union of India, (1994) 6 SCC 651] which gave
importance to the lawfulness of a decision and not its soundness. If an
administrative decision, such as a deviation in the terms of NIT is not
arbitrary, irrational, unreasonable, mala fide or biased, the courts will not
judicially review the decision taken. Similarly, the courts will not
countenance interference with the decision at the behest of an unsuccessful
bidder in respect of a technical or procedural violation. This was quite
clearly stated by this Court (following Tata Cellular [Tata Cellular v. Union
of India, (1994) 6 SCC 651]) in Jagdish Mandal v. State of Orissa [Jagdish
Mandal v. State of Orissa, (2007) 14 SCC 517] in the following words:
(SCC p. 531, para 22)
"22. Judicial review of administrative action is intended to prevent
arbitrariness, irrationality, unreasonableness, bias and mala fides. Its
purpose is to check whether choice or decision is made "lawfully" and
not to check whether choice or decision is "sound". When the power of
judicial review is invoked in matters relating to tenders or award of
contracts, certain special features should be borne in mind. A contract is
a commercial transaction. Evaluating tenders and awarding contracts
are essentially commercial functions. Principles of equity and natural
justice stay at a distance. If the decision relating to award of contract is
bona fide and is in public interest, courts will not, in exercise of power
of judicial review, interfere even if a procedural aberration or error in
assessment or prejudice to a tenderer, is made out. The power of judicial
review will not be permitted to be invoked to protect private interest at
the cost of public interest, or to decide contractual disputes. The
tenderer or contractor with a grievance can always seek damages in a
civil court. Attempts by unsuccessful tenderers with imaginary
grievances, wounded pride and business rivalry, to make mountains out
of molehills of some technical/procedural violation or some prejudice to
self, and persuade courts to interfere by exercising power of judicial
review, should be resisted. Such interferences, either interim or final,
may hold up public works for years, or delay relief and succour to
thousands and millions and may increase the project cost manifold."
This Court then laid down the questions that ought to be asked in such a
situation. It was said: (Jagdish Mandal case [Jagdish Mandal v. State of
Orissa, (2007) 14 SCC 517], SCC p. 531, para 22)
"22. ... Therefore, a court before interfering in tender or contractual
matters in exercise of power of judicial review, should pose to itself
the following questions:
(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";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference
under Article 226."
44. On asking these questions in the present appeals, it is more than
apparent that the decision taken by CCL to adhere to the terms and
conditions of NIT and the GTC was certainly not irrational in any manner
whatsoever or intended to favour anyone. The decision was lawful and not
unsound.
18. We are of the considered opinion that in these facts, the decision of
the Respondent No. 1 to not accept the Petitioner's post facto registration of
GST ensured transparency and fairness as other bidders, who similarly did
not possess a GST certificate, may not have participated in the bidding
process.
19. This Court also finds no substance in the Petitioner's reliance on
Clause 10.5.2 of ITB or the undertaking furnished under Clause 4(k) of
BEC. Clause 10.5.2 operates in a limited and specific context, namely where
the 'executing office' differs from the 'bidding office' and permits deferred
submission of GST registration for the 'executing office'. It does not dilute
or override the primary requirement under Clause 10.5.1 of possessing and
submitting at least one valid GST registration certificate at the time of
bidding, by a bidder. Similarly, Clause 4(k) pertains to post-award
compliances relating to invoicing and input tax credit and cannot be
construed to defer compliance with an essential eligibility condition. The
Petitioner's attempt to conflate these provisions is contrary to the plain
language and scheme of the tender.
The undertaking dated 03.06.2025 filed by the Petitioner with the bid
is unilateral and not contemplated as per Clause 10.5.1 or 10.5.2 of ITB.
20. In matters of tender conditions interpretation, particularly in the realm
of public procurement, the tendering authority is the best judge of its
requirements. It is a settled principle that the author of the tender document
is best placed to understand and interpret its terms, and such interpretation
ought not to be interfered with unless it is found to be arbitrary, perverse, or
mala fide.
In the present case, the interpretation adopted by the Respondent No.
1 is not only plausible but is firmly rooted in the express terms of the tender
and the governing statutory framework. No arbitrariness or irrationality can
be attributed to the decision-making process.
21. The Court is also mindful of the limited scope of judicial review in
tender matters. Interference is warranted only where the decision is vitiated
by illegality, irrationality, or procedural impropriety. The impugned
decision, having been taken in conformity with the tender conditions and
after due consideration of the Petitioner's representation, does not suffer
from any such infirmity. On the contrary, acceptance of the Petitioner's
interpretation would amount to rewriting the tender conditions and diluting
an essential eligibility criterion, which is impermissible in law.
22. The tender in question was published on 06.03.2025 and initially last
date for submission of the bids was 30.04.2025. The said date was extended
to 14.05.2025, further to 04.06.2025 and lastly to 19.06.2025.
The Petitioner is a joint venture entity and was incorporated on
29.05.2025 and it applied for GST on 03.06.2025. This circumstance led to
the Petitioner being unable to secure a GST registration prior to submission
of the bid as on 19.06.2025. Though, the constituents of joint venture entity
were aware about the tender conditions since 06.03.2025.
However, these circumstances are therefore of its (petitioner's) own
doing and Respondent No. 1's decision, to not condone the non-compliance
of absence of GST registration number, does not require any interference.
The Petitioner's commercial interest cannot override the timelines and
requirements of tendering process of Respondent No. 1.
23. The Petitioner has contended that due to its disqualification
Respondent No. 3 remained the sole eligible bidder. It is contended that it
was therefore in the public interest that the Petitioner's financial bid is
opened and the financial bids are re-evaluated, as it would lead to savings to
the public exchequer.
As per letter dated 17.07.2025 sent by Respondent No. 1 to the
Corporate Finance Department, Delhi, there were four bidders and two bids
(including the bid of the Petitioner) was rejected for non-responsiveness.
While Petitioner's bid has been rejected for absence of GST number,
another bid 6 was rejected for non-submission of EMD only. No relaxation
can be granted in favour of the Petitioner alone for evaluation of financial
6 M/s Sandeep Builders Chandigarh
bids as similar relaxation would have to then be granted by Respondent No.
1 in favour of the bidder who was excluded for non-submission of EMD.
Also, no provision of law has been cited before us to show that
Respondent No. 1 is precluded from accepting the bid of a sole eligible
bidder. There is no material before us to conclude that the Respondent No.
1's decision to accept the financial bid of Respondent No. 3 is against the
public interest and/or public exchequer. We therefore find no merit in this
submission.
24. In view of the foregoing, this Court finds that the Respondent's
interpretation of the tender conditions is correct and legally sustainable,
while the Petitioner's interpretation is misconceived and contrary to the
express terms of the tender. Consequently, no infirmity can be found in the
impugned decision dated 29.07.2025, and this Court does not deem it
appropriate to interfere with the same.
25. Accordingly, the writ petition is dismissed. Pending application, if
any, disposed of.
26. No order as to costs.
MANMEET PRITAM SINGH ARORA
(JUDGE)
V. KAMESWAR RAO
(JUDGE)
APRIL 15, 2026/AM/hp
