Rejection of bid in absence of GST registration can’t be termed arbitrary as tender was for taxable supplies: AP HC

Case Details: ASR Hospitals (India) (P.) Ltd. v. State of Andhra Pradesh - [2021] 131 taxmann.com 23 (Andhra Pradesh)

Judicial and Counsel Details

• • R. Raghunandan Rao, J.
  • V.R. Reddy Kovvuri for the petitioner. P. Gangaiah Naidu, Sr. Counsel, Venkat Reddy Chittem and K. Rathanga Pani Reddy for the Respondent.

Facts of the Case

The petitioner had submitted its tender document in response to a tender notice issued for provision of Sick New Born Care Units (SNCUs). It was informed that there were certain deficiencies and the petitioner rectified them. One of the deficiencies pointed out was non-submission of GST registration certificate. It was submitted by the petitioner that it was involved in business of Healthcare Services, which were exempted from payment of GST. Since it was exempted from registering under GST Act therefore, the requirement of producing GST registration certificate would not apply to petitioner. The ender of petitioner was rejected for want of registration. It challenged it and filed writ petition.

High Court Held

The Honorable High Court observed that a person is exempted from requirement of GST registration if he is engaged in supplying only those goods and services which are exempt from registration. However, if such a person deals in any other taxable goods or services, he will not be eligible for such exemption. In the present case, it was found that successful tenderer would be required to supply medicines and other goods, which would not be exempted under the GST Act. For this reason, all bidders were required to submit GST registration certificates. Therefore, it was held that in absence of such a registration certificate, rejection of technical bid of petitioner could not be termed to be arbitrary.