SRI P M GOVINDA REDDY vs THE COMMISSIONER

1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 23rd DAY OF JANUARY 2013

BEFORE

THE HON’BLE MR. JUSTICE MOHAN .M. SHANTANAGOUDAR

WRIT PETITION No.26305 OF 2012 (GM-RES)

BETWEEN:

Sri P.M. Govinda Reddy S/o Munishamappa Aged about 42 years Proprietor, Sri Venkateshwara Transports, Pombarahalli Mulbagal Taluk Kolar District.

...PETITIONER

(By Sri Nagaraj N Naidu, Adv.,)

AND :

The Commissioner Department of Food and Civil Supplies, Cunningham Road, Bangalore-560 001.

The Deputy Commissioner Kolar District, Kolar.

Sri K.N. Seenappa Proprietor Shiva Transports No.60, Koramangala Village

2 Bangarpet Taluk Kolar District.

..RESPONDENTS

(By Smt. P. Susheela, AGA., for R1 and R2; Sri Jayakumra S. Patil, Sr. Counsel for C. Hrishikesh, Adv., for R3)

This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the impugned work order dated 30.6.2012 passed by the second respondent vide Annexure-J and order dated 24.7.2012 passed by the first respondent vide Annexure-K.

This Writ Petition coming on for final hearing this day, the Court made the following :

O R D E R

The 2nd respondent invited tender applications for transport of foodgrains from Food Corporation of India (‘FCI’ for short) to KFCS for the year 2012-13 by prescribing the format on 18.4.2012. The notification is produced at Annexure-A to the writ petition. The petitioner as well as the 3rd respondent participated in the tender process. The 3rd respondent is declared as successful tenderer and consequently the work is assigned to him. The rejection of the petitioner’s application and granting of

3 work in favour of the 3rd respondent was questioned by the petitioner before the appellate authority i.e., before the 1st respondent which came to be dismissed by the impugned order Annexure-K dated 24.7.2012.

Learned counsel for the petitioner submits that Respondent No.3 has not produced the audit report in Form 3 CB and Form 3 CD under Section-44AB of the Income Tax At, 1961 and therefore the 3rd respondent is ineligible to get the work in his favour.

The writ petition is opposed by the learned Government Advocate as well as the advocate appearing on behalf of the 3rd respondent. It is submitted by Sri Jayakumar S. Patil, learned senior counsel appearing for Respondent No.3 that the 2nd technical condition of the tender notification contains two parts viz., (a) one part necessitates the applicant to produce the balance sheet and profit & loss account which is duly certified by the Chartered

4 Accountant and (b) the second part necessitates production of audit report in Form No.3 CB and Form No.3 CD under Section-44AB of the Income Tax Act. In other words, according to him, only if the applicant’s turnover is more than Rs.40,00,000/- in a particular year, it is compulsory for him to produce audit report in Form No.3CB and Form No. 3 CD and not otherwise. The same is the submission made by the learned Government Advocate.

The technical condition No.2 of the Tender Notification is highly confusing. The same reads thus: “2. ªÀåQÛUÀvÀ/¥Á®ÄzÁjPÉ ¸ÀA¸ÉÜAiÀÄÄ chartered Accountant gÀªÀjAzÀ zÀÈrüÃPÀgÀtUÉÆAqÀ ªÀÄÆgÀÄ ªÀµÀðUÀ¼À Balance sheet ºÁUÀÆ profit and loss account eÉÆvÉAiÀÄ°è audit report in form No3 CB & Form No.3 CD under section 44 AB of Income Tax Act, 1969 gÀAvÉ ¸À°è¸ÀÄªÀÅzÀÄ.”

If the same is read in toto, the same may mean that apart from producing the balance sheet and Profit & Loss Account for three years duly certified by the Chartered

5 Accountant, the applicant has to furnish the audit report in Form No.3 CB and Form No.3 CD under Section 44 AB of the Income Tax Act. However, the department of Food & Civil Supplies, Bangalore in its letter dated 17.5.2012 has issued a clarification to the effect that if the particular applicant is having less than Rs.40,00,000/- turnover in the year, there is no question of he filing the audit report in Form No.3 CB and Form No.3 CD under Section 44 AB of the Income Tax Act and he may only produce the balance sheet and the Profit & Loss account of three years duly certified by the Chartered Accountant. According to the clarification, the emphasis is on the question as to whether the bidders have filed their Income Tax Returns for the previous three years. In other words, the emphasis is on the Income Tax returns and not on the audit report in Form No.3 CB and Form No.3 CD. The condition No.5 of financial conditions clearly reveals that the bidder should furnish the Income Tax returns for the previous three

6 years. It does not mandate that a bidder should furnish the audit report in Form No.3 CB and Form No.3 CD under Section-44 AB of the Income Tax Act. Looking to the totality of the facts and circumstances of the case, the Commissioner of Food & Civil Supplies is justified in clarifying that it is not the intention of the State Government to avoid the bidders who have got lesser turnover than Rs.40,00,000/- in a year.

The respondents should have been more clear in prescribing the condition for tender. The condition No.2 of the technical conditions of the tender is highly confusing and this has lead to problems. In the neighbouring district of Chickballapur under the same circumstances, the application filed by a bidder, who has not submitted the audit report in Form No.3 CB and Form No.3 CD is rejected. However, this Court does not know as to whether that particular bidder had income of more than Rs.40,00,000/- or not.

Be that as it may, since the explanation offered by the appellate authority in its order also is a possible explanation and as the financial condition No.5 does not prescribe any condition that the bidder should furnish the audit report in Form No.3 CB and Form No.3 CD and so also as the 3rd respondent has already completed the work which is assigned to him for about 7 months, this Court does not wish to interfere in the impugned order.

Accordingly, the petition stands dismissed.

SD/- JUDGE

Gss/nk-

SRI P M GOVINDA REDDY vs. THE COMMISSIONER