Delhi High Court Holds Submission of Valid GST Registration Certificate at Bid Stage Is Mandatory Under Tender Conditions

The Delhi High Court, in its judgment delivered by Justices V. Kameswar Rao and Manmeet Pritam Singh Arora, addressed the legal question of whether an Application Reference Number (ARN) for GST registration could be considered equivalent to a valid GST registration certificate for the purposes of eligibility in a public tender process. The case arose from the disqualification of the petitioner’s bid by Oil and Natural Gas Corporation Ltd. (ONGC) for failure to submit a valid GST certificate at the time of bid submission for a Jetty Revamping Project.

The petitioner, a joint venture company, had submitted its bid along with an ARN and an undertaking to provide the GSTIN once allotted. The permanent GST registration certificate was obtained after the bid submission date but before any evaluation or objection by ONGC. Despite this, ONGC rejected the bid, citing non-compliance with Clause 10.5.1 of the Instructions to Bidders (ITB) and Clause 4(j) of the Bid Evaluation Criteria (BEC), both of which required submission of a valid GST registration certificate with the bid.

The petitioner argued that the ARN constituted valid interim proof of GST registration and that the subsequent grant of GSTIN cured any deficiency. It was contended that the tender conditions were directory and that substantial compliance had been achieved. The petitioner also relied on a clarification from the Assistant Commissioner (ST), Government of Telangana, supporting the use of ARN for tender participation. ONGC, however, maintained that the requirement was mandatory, that an ARN merely evidenced a pending application, and that only a GST registration certificate issued under Rule 9 of the CGST Rules constituted valid compliance. ONGC further argued that the tendering authority’s interpretation of its own terms should not be interfered with unless arbitrary or perverse.

Upon review, the Court found that the relevant tender clauses were clear and unambiguous in requiring a valid GST registration certificate at the bid stage. The Court held that the distinction between an ARN and a GST certificate was substantive, not procedural, and that an ARN could not be equated with a valid registration certificate under the CGST Rules. The Court also noted that ONGC had consistently applied this requirement to all bidders and had not granted any relaxation.

The Court relied on its own prior decision in MDC Pharmaceuticals Private Limited v. Employee State Insurance Corporation and on Supreme Court precedent, emphasizing that essential eligibility conditions in tender documents cannot be relaxed post facto. The Court rejected the petitioner’s reliance on other tender clauses permitting undertakings or deferred submission of GST details, clarifying that these applied only in specific circumstances not present in the case at hand.

In its analysis, the Court reiterated the limited scope of judicial review in tender matters, stating that courts should not interfere with the tendering authority’s interpretation unless it is arbitrary, irrational, or mala fide. The Court found ONGC’s decision to be lawful, reasonable, and consistent with the express terms of the tender and the statutory framework. The petitioner’s inability to secure GST registration prior to bid submission was attributed to its own commercial decisions and timing, and could not justify relaxation of the mandatory requirement.

Accordingly, the Court dismissed the writ petition, upholding ONGC’s decision to reject the petitioner’s bid for non-compliance with the essential eligibility condition of possessing and submitting a valid GST registration certificate at the time of bid submission. No order as to costs was made.