Assam: Gauhati HC Differentiates Between IT Returns and Annual Turnover for MSE Bidder

Staff Reporter

Guwahati: The Gauhati High Court dismissed a petition after not finding any infirmity with the decision of the respondent authorities in disqualifying the petitioner’s technical bid. The HC also offered the view that the Average Annual Financial Turnover would have to be considered to be different than an Income Tax return for purposes of the case.

The bench of Justice Michael Zothankhuma issued the order in Case No. (WP(C)/4258/2024) filed by M/S Chayanika Handloom Products, represented by proprietor Hrishikesh Deka, which challenged the rejection of their technical bid by the Directorate of Handloom and Textiles, Assam. The rejection cited non-compliance with Clause 13(h) of the Notice Inviting Tender (NIT), which mandates submission of income tax returns and audited financial statements for the last three years.

The bench examined whether the absence of a third year’s income tax return could disqualify a Micro and Small Enterprise (MSE) bidder despite exemptions under government policies. The petitioner, an MSE, claimed exemption from turnover and experience requirements under Clause 3(e) of the NIT but did not provide the income tax return for the financial year 2022–2023.

Clause 3(e) of the NIT provides for the exemption of submitting turnover and experience, as required under Clauses 3(b) and 3(c) of the NIT, respectively, for Micro Small Enterprises (MSEs). Clause 3(e) in the opinion of this Court does not exempt the petitioners from filing Income Tax returns, inasmuch as Clause 3(b) clearly provides that the Average Annual Financial Turnover for three years would have to be provided, along with the audited/certified balance sheet and the IT returns, the court observed.

In light of the above, the bench ruled that an ITR cannot be said to be an Average Annual Financial Turnover document and that the relaxation provided to MSEs under Clause 3(e) would not cover the Income Tax Returns required to be submitted by a bidder under Clause 13(h). As the petitioners have submitted only the ITRs for 2 years instead of the stipulated 3 years, the court did not find any infirmity with the decision of the respondent authorities in disqualifying the petitioner’s technical bid. The writ petition was accordingly dismissed.

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